The European Union has been aggressive about its emerging expectations and regulations for responsible business conduct, making many American companies think they are exempt. Not so, says the US Government.
In March 2024, the U.S. Government (USG) released an updated National Action Plan on Responsible Business Conduct, outlining a comprehensive approach to integrating human rights, labor standards, and environmental stewardship into business practices, emphasizing the critical role of due diligence across business operations.
The 2024 NAP is structured into three main sections, focusing on due diligence, priority areas from stakeholder consultations, and detailed commitments to promote and incentivize RBC. The plan emphasizes the U.S. Government's role in creating an environment that supports businesses in upholding high standards of ethical conduct and accountability, particularly concerning human rights and labor rights within global supply chains.
Key Priorities of the Plan
Enhanced Due Diligence and Transparency: The USG underlines the importance of businesses implementing human rights due diligence (HRDD) consistently throughout their value chains. This process is critical not only for identifying and mitigating risks but also for fostering transparency and accountability in business operations .
Strengthening Remedies + Grievance Mechanisms: A significant focus is placed on improving access to remedy. This includes enhancing mechanisms for addressing grievances that arise from business activities, ensuring that these mechanisms are accessible, predictable, and equitable. Such improvements aim to provide clearer paths for redress for those affected by business operations, thereby strengthening trust and accountability. (Need support with grievance management or remedy? Reach out to our team!)
Resources and Support for Businesses: Recognizing the challenges businesses face in implementing HRDD, the USG plans to provide more robust support systems. This includes the establishment of an RBC and Labor Rights InfoHub to offer guidance, best practices, and support for navigating different regulatory environments and managing risks associated with business activities.
Sector-Specific Guidance: The plan acknowledges the varying impacts and responsibilities across different sectors. It encourages businesses to go beyond minimum standards and strive for continuous improvement in aligning their operations with international human rights standards and environmental stewardship .
Collaboration and Multi-Stakeholder Engagement: The NAP highlights the importance of multi-stakeholder engagement and collaboration. This includes working closely with civil society, labor unions, and the private sector to enhance the effectiveness of RBC strategies and ensure that they are comprehensive and inclusive .
Implications for Businesses
The 2024 NAP sends a clear message to U.S. and international businesses about the USG’s expectations for responsible business conduct. Businesses are encouraged to view HRDD as an integral part of their core operations, akin to other forms of due diligence like financial or market analyses. By doing so, they can not only mitigate risks but also leverage ethical business practices as a strategic advantage in global markets. This plan follows the UN Guiding Principles on Business and Human Rights, outlining the need for risk assessment, identification, prevention and remediation efforts.
(Want to educate suppliers on the guiding principles or even brush up on the principles yourself? Check out our Understanding Human Rights Due Diligence (HRDD) in Business eLearning course.)
The plan also underscores the necessity for businesses to be proactive in their due diligence efforts, particularly in high-risk environments or sectors. By integrating rigorous HRDD processes, businesses can better manage their operations and contribute positively to the communities and environments in which they operate.
The 2024 National Action Plan by the U.S. Government marks a significant step forward in promoting and institutionalizing responsible business conduct globally. It provides a clear framework for businesses to align their operations with ethical standards and legal requirements, ultimately contributing to more sustainable and equitable economic development.
As businesses continue to navigate a complex global landscape, adherence to the principles outlined in the NAP will be crucial for building a more responsible and resilient business community.
As we navigate this new landscape of corporate sustainability, the Labor Solutions team, not only keeps you up-to-date, but helps global companies build AND implement compliant programs at scale. For more insights into the CSDDD and how your firm can advance in sustainability leadership, connect with the Labor Solutions advisory team today.