The current patchwork of voluntary and mandatory human rights due diligence regulations means that many organisations are not required to meet more stringent standards yet. But taking a proactive stance and adapting existing due diligence and monitoring processes makes sense. The writing is, as they say, on the wall, and reducing risk exposure while addressing the ethical expectations of stakeholders can deliver clear reputational and financial advantages.
If mHRDD laws are the stick, then investors and consumers are the carrots that will encourage more organisations to build HRDD into their risk management processes. BlackRock CEO Larry Fink pointed out the benefits of principled performance in his 2021 letter to CEOs. Fink goes on to note that “During 2020, 81% of a globally-representative selection of sustainable indexes outperformed their parent benchmarks.”