Towards Responsible Business Conduct: Analyzing the Evolution of Corporate Human Rights and Environmental Due Diligence in the EU

Panev, Kristijan (2024) Towards Responsible Business Conduct: Analyzing the Evolution of Corporate Human Rights and Environmental Due Diligence in the EU. In: EU at the Crossroads - Ways to Preserve Democracy and Rule of Law, 13-14 June 2024, Josip Juraj Strossmayer University of Osijek, Faculty of Law Osijek.

	Text PREDOC ECLIC 2024_programme.pdf Download (268kB)
	Slideshow Kristijan Panev_ECLIC Presentation.pdf Download (158kB)

Abstract

This article explores the evolving landscape of responsible business operations concerning human rights and the environment, particularly within the European Union. Traditionally, corporate activities were mainly governed by corporate laws that often overlooked their impact on human rights. Conventionally, business and human rights were treated as separate realms under international law, where human rights obligations were primarily linked to states. However, the globalization of the economy has highlighted corporations’ potential impact on human rights and the environment worldwide. In the pursuit of foreign investments, some developing and non-developed countries adopt lax regulations, leading to compromised working and environmental standards. Corporations, focused on profits, exploit these opportunities by investing or outsourcing services in regions with favorable business conditions and reduced production costs, often neglecting human rights. The challenge lies in compelling businesses to prioritize human rights and not jeopardize their effective enjoyment.

In response to this, the United Nations Guiding Principles on Business and Human Rights (UNGPs) were introduced in 2011, endorsing human rights and environmental due diligence as a standard for responsible business conduct. Although non-binding, these principles become widely accepted and authoritative standards that led some governments and companies to create national legislation and self-regulation policies. However, the absence of binding regulation has been a notable limitation. The European Union is trying to address this gap, and after extensive negotiation, in December 2023, it agreed on corporate due diligence rules to safeguard human rights and the environment. These rules introduce an obligation for large EU-based companies and those in high-risk sectors to integrate human rights and environmental due diligence into their policies and risk-management systems.

This article explores the transition from soft law to mandatory legal obligation within the EU, focusing on the concept of corporate human rights and environmental due diligence in the EU Corporate Sustainability Due Diligence Directive (CSDDD). In particular, the analysis considers three parameters – content, elements, and scope and reach of the obligation – to assess the alignment of the CSDDD with international standards, specifically the UNGPs. Through descriptive and analytical legal research, the article explores the legal instruments and applicable legal standards, employing a comparative legal method to outline differences and similarities between the UNGPs and the EU CSDDD. The article aims to contribute to the understanding of the legal framework governing corporate responsibility for human rights and the environment within the EU. It also opens a discussion on how businesses might change their behavior when they move from voluntarily following rules to being legally obliged to follow them.

Keywords: due diligence, corporate responsibility, business, human rights, environment

Item Type:	Conference or Workshop Item (Paper)
Subjects:	Social Sciences > Law
Divisions:	Faculty of Law
Depositing User:	Kristijan Panev
Date Deposited:	14 Aug 2024 09:18
Last Modified:	14 Aug 2024 09:18
URI:	https://eprints.ugd.edu.mk/id/eprint/34526

Actions (login required)

View Item