Neglecting the Proactive Aspect of Human Rights Due Diligence? A Critical Appraisal of the EU's Non-Financial Reporting Directive as a Pillar One Avenue for Promoting Pillar Two Action
Business and Human Rights Journal, Vol 3, Issue 1
23 Pages Posted: 25 Oct 2017 Last revised: 17 Nov 2017
Date Written: October 25, 2017
Firms’ Human Rights Due Diligence (HRDD) and communication on their human rights impacts are elements in the Corporate Responsibility to Respect Human Rights (Pillar Two), and should be promoted by States as part of their State Duty to Protect (Pillar One) through regulatory strategies aimed at shaping business conduct. Analyzing the EU’s 2014 Non-Financial Reporting Directive as an example of governmental regulation for promoting responsible business conduct, the article discusses conditions for HRDD and reporting as a communication process to stimulate organizational change in accordance with the UN Guiding Principles to avoid harm, including through affected-stakeholder engagement. Applying socio-legal regulatory theory along with organizational and accounting literature, the article finds that the Directive’s predominant focus on ex-post measures appears to be a neglected opportunity to induce ex-ante organizational learning and changed business conduct to prevent adverse human rights impacts. It offers recommendations for regulators and stakeholders for stronger regulation.
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