Abstract:
This working paper explores a novel approach to the challenge of corporate human rights abuses in the context of globalisation and its current incorporation into European business law. The contemporary legal order has proven insufficient to address the negative externalities of companies on human rights. Against this background, the United Nations Guiding Principles on Business and Human Rights urge companies to take responsibility by engaging in so-called human rights due diligence – a management process dedicated to prevent and mitigate adverse human rights impacts. This due diligence approach has gained considerable momentum in recent years. In fact, there is a growing set of legislation in Europe that promotes or requires corporate human rights due diligence. This contribution raises the question of how to regulate these processes effectively. To that end, the paper draws upon the theory of meta-regulation and defines benchmarks for an assessment of relevant law. In a following step, these benchmarks are tested on an example of due diligence legislation, namely, Directive 2014/95/EU of the European Union on the disclosure of non-financial information. On the basis of an assessment of its regulatory approach, the paper raises doubts as to whether the Directive facilitates effective human rights due diligence and makes recommendations for legal reform.