Photo: The European Parliament in Brussels, where the EU is considering legislation that would mandate a “legal duty of care” for human rights and the environment.
There’s no shortage of news covering the impacts that multinational corporations have on human rights, and the stories are generally far from positive. Weak enforcement in poorer nations and the lack of transparency in supply chains are among the reasons why a company can suddenly find itself in public relations hot water or, even worse, a horrific human rights disaster.
One recent study based in Mexico concluded that, overall, multinationals have a better track record respecting human rights than locally-based firms, but problems can still fester. In recent years, apparel companies and electronics manufacturers are among the industries that faced scrutiny over how people working within their supply chains were treated.
A new business coalition says it is not only committed to human rights and environmental stewardship (as the two challenges are far more closely related than we may think); it also says companies should be required to take on due diligence by law so that human rights, and the planet’s rights, are respected.
Yesterday, a group of multinationals and trade groups announced its support of legislation in the European Union that would mandate such due diligence. Signatories include some of the usual suspects including Unilever, Tony’s Chocolonely and The Body Shop. But this list also boasts brands including H&M, Inditex (which owns Zara), Mars and Modelez.
It’s true that many companies have adopted standards such as those proposed by their specific industries, or more general frameworks such as the U.N. Guiding Principles on Business and Human Rights (UNGPs). “However, more companies need to take commitments and work to assess, act, and report on their potential and actual impacts on human rights and the environment,” the companies wrote in an open letter.
The cynic could say this is simply companies begging government to regulate them over actions they cannot, or will not, take on with their own initiative. But such a mandate can also protect companies in the long term by raising potential problems that could flare up should they commit to build a factory, line up a huge group of new suppliers or lease new offices in a faraway location. Legislation on this front can also create a more level playing field for businesses, bolster legal certainty and, ultimately, help companies become a more trusted ally of a local community instead of an adversary.
According to the signatory companies, their words are backed with the heft of a combined $415 billion in total market value. More importantly, they point out that this directive is the first remotely international and cross-sectoral business movement that calls for a legal duty of care — in other words, enacting a legal obligation to deploy any and all reasonable action in order to avoid injuring citizens, who often have little recourse to fight back against human rights or environmental violations.
Image credit: Marko Lovric/Pixabay
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.