The World Benchmarking Alliance (WBA) published Linking People and Planet for Effective Due Diligence (October 2024). The briefing draws on learnings from its Nature Benchmark, which examines how 816 influential companies across more than 20 industries, including food and agriculture, apparel and extractives, support resilient ecosystems that allow humans and nature to co-exist within safe planetary boundaries.
Human Level’s Take
- Companies need to pay attention to the links between environment and human rights in order to comply with emerging legislation (like the EU CSDDD and CSRD) and normative standards like the UN Guiding Principles and the Global Biodiversity Framework. But according to the WBA’s benchmarking of over 800 influential companies in high-impact sectors (including food and agriculture, apparel and extractives), very few companies are meeting the moment.
- And the moment is a critical one. According to a report just released by the UN Environment Programme and International Union for Conservation of Nature, only one-fifth of the natural lands and waters identified as most important for biodiversity conservation are fully protected from human-caused degradation, and a further one-third of these areas are completely outside of protected and conserved areas.
- Without nature, both humans and businesses are at risk — which is why integrating human rights and environmental considerations into due diligence approaches is essential. But this doesn’t require starting from scratch. Companies can build on the systems they already have in place for HRDD to integrate an environmental lens into assessing, preventing, mitigating and remediating harms to both people and planet. Bringing together diverse functions of the business to do this (including sustainability, compliance and procurement) is an important first step to get the full picture of the company’s impacts and create holistic strategies.
- The WBA’s benchmarking highlights some top opportunities for companies to conduct better HREDD: explicitly committing to respect the environmental rights of local communities; engaging directly with Indigenous Peoples, local communities and human rights defenders to understand the company’s potential impacts on nature and human rights; and setting quantitative targets to protect the availability and affordability of clean water for drinking, hygiene and sanitation.
For More
- Putting the ‘E’ into HREDD: The UN Guiding Principles on Business and Human Rights (UNGPs) do not specifically address environmental issues, however there are key links between environmental health and human rights. In 2022, a UN resolution recognised the human rights to a clean, healthy, and sustainable environment, enabling environmental well-being to be included as a key component of frameworks like human rights due diligence. This linkage is further cemented by landmark legislation like the EU CSDDD, which explicitly ties together the expectation that companies will consider both environmental and human rights issues within their due diligence. What’s more, international frameworks like the Global Biodiversity Framework and the UN Pact for the Future call for human rights-based implementation of environmental protection measures. Incorporating the ‘E’ into HRDD is particularly urgent considering the current imperiled state of biodiversity and, according to the WBA, represents a natural extension of companies’ responsibility to respect human rights. This means that companies are expected to continuously identify, prevent, mitigate and remediate their impacts on both people and nature throughout their value chains.
- What do companies need to do to conduct robust HREDD?: HREDD is based on the core steps of HRDD as set out in the UNGPs: identifying and assessing negative risks and impacts on people and the environment, integrating and taking action, tracking performance and communicating on progress. Integrating people and planet considerations holistically will require companies to develop environmental due diligence systems that prioritise stakeholder engagement and a wide lens that takes into account complex global supply chains. This doesn’t mean starting from scratch, though — these systems will be more effective if they build on existing human rights due diligence approaches. The WBA also points out that this create an opportunity to break down silos between different departments of the company, including sustainability, compliance and procurement, among others. The briefing also highlights that the concept of HREDD is generally expressed as an obligation of means rather than results — meaning that companies can focus on ensuring that “the highest quality of process is developed and not a singular focus on the final outcome.”
- The current state of HREDD: The WBA draws on the learnings from its Nature Benchmark to reveal key insights about how companies are performing on HREDD. It identifies four key findings: some text
- (1) Most companies are not implementing HREDD steps. Almost three-quarters of companies (72%) scored zero points on the key components of due diligence. Nineteen percent of companies implement some steps, but only 2% have integrated environmental considerations with human rights considerations. Further, only 1% of companies have mapped their dependencies on nature (a key component of the European Sustainability Reporting Standards) which also means they will not be able to implement effective HREDD.
- (2) Companies are not seeing environmental rights as human rights. For example, over half of the assessed companies have a commitment to respect human rights, but only 2% commit to respecting environmental rights. And, although 16% report that they engaged with impacted stakeholders, only 1% track their impacts on the health of local communities.
- (3) Indigenous Peoples, local communities and human rights and environmental defenders are not adequately considered by companies, despite being central to environmental protection. Only 13% of companies have an explicit commitment to respect the rights of Indigenous Peoples and local communities, and only 5% of companies have a policy to prevent attacks on human rights and environmental defenders.
- (4) Water stewardship is not at the forefront of companies’ environmental agendas. Twenty-eight percent of companies address water quality, but only 15% report quantitative data on water pollution. In addition, just 10% of companies commit to respecting the WASH rights of communities (water, sanitation and hygiene) and 4% report on specific preventive and corrective action plans.
