Ramboll: Exploring Human Rights Due Diligence

Legal requirements and the growing expectations for ESG compliance have compelled companies to publicly commit to respecting human rights.

However, translating these commitments into actionable strategies presents challenges, particularly within extensive supply chains where mere declarations are insufficient.

Ramboll's whitepaper, Human rights due diligence inaction: The tangible business risk from doing nothing, provides insightful guidance for businesses aiming to take ownership of their supply chains in this context.

Patrick Moloney, Global Director and Lead for Sustainability Consulting and ESG at Ramboll, states: "In today’s regulatory, social and investment landscape, neither moral intent nor technical execution alone is sufficient. Companies are increasingly judged not just by what they say, but by how they operationalise their stated values, particularly when navigating complexity, controversy or uncertainty."

Why corporate responsibility matters

Incorporating robust human rights due diligence is crucial for effective governance and is key to anticipating disruptions, maintaining the trust of stakeholders and safeguarding brand value.

The whitepaper by Ramboll highlights: "Most companies, at least on paper, agree. Yet, when it comes to putting these values into practice, particularly when it comes to human rights, many still treat it as optional."

Increasing regulatory demands and stakeholder expectations have shifted this mindset, yet regulatory complexities, such as the EU Simplification Omnibus and DEI backlash in the US, have created a challenging compliance environment.

This has led to many companies postponing action due to perceived uncertainties, as noted in the whitepaper: "In this vacuum, too many companies are mistaking uncertainty for a reason to delay."

Despite major corporations adopting human rights policies, merely 20% have started to actualise human rights due diligence, according to the World Benchmarking Alliance’s 2024 Social Benchmark.

This indicates a substantial gap in operational practice versus stated commitments.

The impacts of not taking action

Ramboll's whitepaper elaborates on the business implications of inadequate human rights action.

Enhanced information access through social media means reputational damage can escalate swiftly, eroding brand credibility and consumer trust.

Moreover, human rights considerations are now integral to investment decisions.

ESG analysts and fund managers scrutinise how companies address human rights, viewing subpar performance as indicators of broader management inadequacies and future liabilities.

Additionally, ignoring human rights concerns risks diminishing workforce morale and cultural integrity as employees may perceive a disregard for stated values when leadership overlooks human rights commitments.

Within supply chains, unsafe working conditions or environmental infractions can incur serious consequences.

Regulatory frameworks—most notably the EU CSDDD—are a critical focus, though not the sole consideration for procurement professionals.

Tereza Kramlova, Senior Advisor at Ramboll, articulates the issue: "Too many companies shy away from human rights due diligence because it might reveal risks they would rather not face.

"But that is precisely the point. Human rights due diligence is not about being perfect from the very beginning; it is about being accountable and adaptive. It is a continuous cycle, not a one-off fix, and it must evolve alongside the operational realities it is meant to address."

What does strategic human rights due diligence look like?

The whitepaper recommends strategic steps grounded in the UN Guiding Principles (UNGPs) and OECD Guidelines, while acknowledging that an effective approach requires more than a standardised checklist. The suggested roadmap involves:

• Understanding and addressing identified risks
• Taking ownership in critical areas
• Engaging with affected communities and individuals
• Ensuring integration across the business
• Responding to, mitigating, and reporting on findings

As the whitepaper emphasises: "Doing it right does not mean perfection. It means being accountable, context-aware and willing to adapt."

For procurement leaders, this means embedding human rights diligence into the core of supply chain processes to drive sustainable management and resilience.