Human Rights Due Diligence (HRDD)

The UN Guiding Principles, adopted in 2011, are the source of the idea. A company maps where harm could occur, such as forced labour in a supplier or unsafe conditions at a contractor's site, ranks the risks by seriousness to people, and acts through steps such as supplier contracts, audits, training and, as a last resort, ending the relationship. It tracks whether the steps work, reports on them publicly and offers or supports remedy to those harmed. The focus is on harm to people, not on risk to the company, although the two often overlap. Several countries and the EU now make the process a legal duty for larger firms, with penalties for failing to carry it out, which is why it is often called supply chain due diligence. Procurement teams ask suppliers for proof that the steps were taken, and a written policy alone does not satisfy them.

A clothing brand finds through supplier audits that a factory in its supply chain withholds workers' identity papers. The brand ranks this as a severe risk, asks the factory to stop and funds retraining of its managers. Follow-up visits and worker interviews show that the practice continues, so the brand moves its orders to another supplier and publishes a summary of the case in its annual report.