Efforts to drive more responsible business conduct through new OECD instrument
Ministers from OECD and developing economies have committed to step up their efforts to promote responsible business conduct by companies in order to drive more inclusive and sustainable economic growth
Forty-eight countries have adopted and agreed to support and monitor implementation of the OECD Due Diligence Guidance for Responsible Business Conduct, at the OECD’s Annual Meeting at Ministerial Level taking place this week in Paris. OECD countries, together with Colombia and Lithuania who have been invited to join the Organisation, plus Argentina, Brazil, Costa Rica, Egypt, Jordan, Kazakhstan, Morocco, Peru, Romania, Tunisia and Ukraine are the adherents to this new instrument.
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Forty-eight countries have adopted and agreed to support and monitor implementation of the OECD Due Diligence Guidance for Responsible Business Conduct, at the OECD’s Annual Meeting at Ministerial Level taking place this week in Paris. OECD countries, together with Colombia and Lithuania who have been invited to join the Organisation, plus Argentina, Brazil, Costa Rica, Egypt, Jordan, Kazakhstan, Morocco, Peru, Romania, Tunisia and Ukraine are the adherents to this new instrument.
The Guidance, the first government-backed standard for corporate due diligence on responsible business conduct to cover all sectors of the economy, addresses a range of risks in business operations and supply chains, including human rights, labour, the environment and corruption.
“The business community has a responsibility to conduct business in a way that takes into account both the bottom line and the impact of their activities on society,” said OECD Secretary-General Angel Gurria. “This guidance is a major milestone in ensuring that governments and business can work together to drive more inclusive and sustainable growth across the world through more responsible business conduct and due diligence across supply chains.”
Government backing of the Guidance will help support a common, international understanding in order to create certainty and a level playing field for business regarding their responsibilities to conduct due diligence for responsible business conduct.
The OECD will work with adhering countries to monitor implementation. Some countries, such as France, have adopted legislation with corporate duties to prevent human rights impacts in global supply chains, while others, such as Germany, have committed to monitoring company implementation of due diligence as part of their national action plans on business and human rights.
The measures companies should take include, among others, reviewing and updating their corporate policies on issues such as labour, human rights, disclosure and corruption and making these public; communicating on these with suppliers and including conditions around responsible business conduct in business contracts; identifying and preventing negative impacts in their operations and supply chains; and publicly reporting on their efforts to address these impacts.
The OECD worked closely with business, trade unions and non-governmental organisations to produce the guidance. It builds on the OECD Guidelines for Multinational Enterprises and the OECD’s guidance in areas including minerals, agricultural and garment and footwear supply chains.
By: N. Peter Kramer