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Nearly 80% of companies are failing to implement human rights due diligence

Chandler Thornton Product Insights Lead View profile

Nearly three years out from the implementation of the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) requirements and one thing is clear: companies are unprepared. A recent benchmark found that nearly 80% of companies scored zero on their implementation of human rights due diligence, a key component of the CSDDD and various due diligence regulations worldwide.  

The World Benchmarking Alliance's evaluated the world's 2,000 most influential companies and the findings reveal a concerning lack of readiness, with significant implications for responsible sourcing and human rights due diligence. 

“Given the reach of the 2,000 companies assessed in the Social Benchmark, this puts millions of workers and communities at risk and undermines global efforts to achieve the SDGs (Sustainable Development Goals),” the World Benchmarking Alliance said. 

The corporate readiness gap

Only 20% of companies are taking steps to identify and address their human rights impact and just 9% of companies demonstrate any engagement with affected or potentially affected stakeholders. Meanwhile, our data indicates more than 50 key sourcing regions worldwide show high or extreme risk for supply chain ESG violations, including critical issues like forced labour and inhumane treatment. This underscores a critical compliance gap presenting material exposure for companies and the corresponding workforce.  

Enhancing responsible sourcing through a holistic approach

Our supply chain due diligence platform, EiQ, enables due diligence and supports near-real time monitoring of a supply chain’s individual supplier risks. EiQ goes beyond a traditional approach by integrating data-driven decision-making into the risk management process, allowing companies to better understand their ESG risks, proactively manage these risks, and gain greater visibility over their end-to-end operations. 

In the era of assurance 4.0, the new era of risk management, businesses must leverage data-driven insights to improve their ESG strategies and supply chain integrity. LRQA's expert advisory services combined with risk insights informed by nearly 20,000 annual audits and civil society research support companies in transforming their responsible sourcing approaches. 

EiQ provides comprehensive risk scores for sourcing regions, products, and individual suppliers, offering valuable insight into the level of risk exposure associated with each. These scores are derived from on-the-ground data and supplemented with trusted public domain information, ensuring a robust and accurate assessment of potential risks. 

The findings from the World Benchmarking Alliance's Social Benchmark are a wake-up call for companies worldwide. With 80% of companies failing on human rights due diligence, there is an urgent need for companies to ensure they are in a position to comply with the new regulation.

Contact us to better understand your supply chain needs.

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