Is the UK Due for Mandatory Corporate Due Diligence?

A peer in Britain’s House of Lords introduced earlier this week a proposal for a “groundbreaking” first-of-its-kind law that would require companies in the United Kingdom to conduct human rights and environmental due diligence.

“This bill marks a significant moment, as it’s the first time Parliament will have a chance to deliberate on a mandatory framework for human rights and environmental due diligence and alleviation of corporate harm,” Lola Young, Baroness Young of Hornsey, said of the would-be legislation.

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While other countries, notably France, Germany and the rest of the European Union, are either mulling or adopting similar laws, the United Kingdom has fallen behind in compelling companies to ​take “meaningful steps” to tackle modern slavery—and the risk thereof— in their supply chains, the longtime human rights advocate and Anti-Slavery International patron said.

Chief among the Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill’s provisions is the requirement that businesses undertake human rights and environmental due diligence to identify, address, prevent, mitigate and remedy harms in their operations and value chains. It also seeks to hold companies accountable for any failure to prevent harm through liability provisions, “level the playing field” between businesses by obliging the same level of practice, and enable victims of abuses to access justice through the courts of the home country of the leading company in a supply chain.

Sian Lea, business and human rights manager at Anti-Slavery International, said that it’s time for the United Kingdom to “reclaim” its leadership role and “pave the way for a fair and just future.”

“Anti-Slavery International has been advocating for mandatory human rights and environmental due diligence for years, recognizing the incredible impact such legislation can have on the millions of people in our global supply chains,” Lea said. “We urgently require comprehensive legislation prioritizing people and the planet over corporate profit.”

Calls for regulatory scrutiny of Britain’s supply chains have grown more vociferous over the years. In July, 50 U.K. businesses and investors, including retailers such as Aldi, Asos, John Lewis, New Look and Primark, signed an updated statement urging the government to prop up the post-pandemic economy with greater human rights and environmental oversight.

“Such a requirement to prevent abuse of human rights and environmental harm in global operations and value chains would deliver on the government’s commitments to the leveling up agenda and to the transition to a net zero economy, as well as establishing Global Britain as a leader in setting standards for renewed and sustainable prosperity worldwide,” they wrote. “The Covid-19 crisis demonstrated the fragility of global supply chains, and the vulnerabilities this creates and exacerbates for workers, communities, indigenous peoples and businesses around the world. There is a real risk that recent progress will be reversed.”

Investors representing 4.5 trillion pounds ($5.7 trillion) in assets under management and advice have also voiced their support for some kind of business, human rights and environment act in the United Kingdom, writing last August that “rigorous” due diligence legislation following the recognized international standards of the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises would be “good for businesses, investors, the economy and the people it serves.”

Francesca Mangano, head of corporate social responsibility and sustainability at TFG London, which owns brands such as Hobbs, Phase Eight and Whistles, said that British businesses operating in the global milieu often find themselves self-regulating through voluntary initiatives to fill gaps in global governance.

“We would welcome and advocate for mandatory human rights and environmental due diligence to level the playing field and allow for more robust national regulations,” she said.

So would the British public, according to a 2022 YouGov poll of more than 1,800 adults from England, Northern Ireland, Scotland and Wales. In it, four out of five respondents opted in favor of a law that would prevent business human rights and environmental harm.

“Advocating for this in the U.K. has been a cause I and many others have championed for years, and I will continue to collaborate closely with NGOs and businesses to understand their perspectives,” Young added. “It’s time for us to step up and proactively address human rights and environmental concerns in our supply chains.”