GRI's report released last March 27 explores the relationship between due diligence and sustainability reporting, offering insights on the status within the global policy landscape. Particularly relevant for global-local reconcilition purposes, after the The emergence of national and regional due diligence policies, specific and as GRI’s Universal Standards due diligence reporting have been built based on broader intergovernmental instruments, including the OECD Guidelines for Multinational Enterprises, and the UN Guiding Principles on Business and Human Rights (UNGPs). The report makes the case for harmonization on a global level.
Based on the OECD definition, due diligence is the process through which an organization identifies, prevents, mitigates, and accounts for how it addresses its actual and potential adverse impacts which can be related to employment, human rights, the environment, bribery, and consumers.
In other words, as indicated by Peter Paul van de Wijs, GRI’s Chief Policy Officer "There are a growing number of due diligence-related policies around the world, in particular those that set expectations for greater accountability on environmental and social impacts. Organizations must be prepared for this reality. However, there is no widely adopted due diligence disclosure system, making it challenging to track, measure, and compare progress ..."
Key Due diligence related conclusions of the report include:
Laws set expectations for all corporate behavior, e.g. tax, corruption etc
Public reporting is important for effectiveness, e.g. corporate governance, supply chain impacts and operations
Growing impact on financial decision-making, enterprise-wide risk management systems focusing on financial risks and opportunities
Cross-border implications and global harmonization
Stakeholder engagement, identifying, engaging and publicizing relevant stakeholders
Supply chain mapping, products, raw materials, traceability
The paper also establishes a clear connection between due diligence and materiality assessment, a key component of corporate reporting.
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