Löning - Human Rights and Responsible Business Monthly Briefing
Löning – Human Rights & Responsible Business GmbH
We are an international management consultancy specialised in human rights.
We all know that change is a constant, but understanding and responding to it is all about being intentional. Today, businesses operate in an era where their externalities – once considered “out of sight and out of mind” – are increasingly being brought into the fold of their responsibilities. This reflects a growing understanding that respect for human rights and the environment is neither optional nor exceptional but, as Ruggie used to say, “just business”.
The 13th UN Forum on Business and Human Rights stressed the need for a “smart mix of measures”, a combination of regulatory, voluntary and market-based solutions. Despite some pushback, the trend is clear: global accountability frameworks are raising expectations of corporate responsibility.
Having worked as a human rights lawyer with Brazilian and transnational companies in the investment, extractive and public sectors, I've seen a growing recognition among businesses, regulators, consumers and society at large: the opposite of due diligence is, in fact, negligence. Robust human rights and environmental due diligence (HREDD) is increasingly essential, not only for compliance, but also for identifying and addressing risks and impacts on people and the planet. Companies that prioritise HREDD protect themselves from reputational, financial and legal risks, while leading the way towards sustainable, responsible business models.
In 2024, this momentum has been followed by significant regulatory advances. From the EU's Corporate Sustainability Due Diligence Directive and Forced Labour Ban Regulation to initiatives in Canada, Japan, India, Kenya and Mexico, global efforts are advancing human rights due diligence, forced labour bans, sustainability reporting and responsible business practices. These frameworks encourage due diligence over negligence and push companies to responsibly manage their impacts throughout their value chains.
At Löning, we support companies in implementing HREDD frameworks in line with global standards and emerging national norms. Through the Löning Academy, we work with companies and academic institutions to deliver creative learning programmes based on practical case studies that reflect the latest trends and challenges in the field.
If you're interested in learning how we can help your company build capacity and embed the smart mix of solutions into your operations, feel free to reach out to me at leonel@loening.org.
News from Team Löning
🇺🇳 Last week, our team attended the 13th UN Forum on Business and Human Rights in Geneva, where we hosted a snapshot session on building effective grievance mechanisms. The key theme was the “smart mix of measures”, combining voluntary and mandatory, as well as national and international measures on business and human rights.
We left the Forum inspired and ready to translate these insights into our ongoing work!
Want to learn more? Check out our team's reflections: “What is the Smart Mix?” and “The Fourth Pillar of the UNGPs”
European Parliament
On 14 November, the European Commission agreed by 371 votes to 240, with 30 abstentions, to postpone the EU Deforestation Regulation (EUDR) for one year. This is to allow companies to comply with the law, which ensures that products sold in the EU do not come from deforested areas. The Commission proposed the delay to address concerns raised by EU Member States, third countries, traders and operators. Large operators and traders will have to comply from 30 December 2025, while micro and small businesses will have until 30 June 2026. The Commission will have to finalise a country benchmarking system by 30 June 2025. The Deforestation Regulation aims to combat climate change and biodiversity loss by preventing deforestation linked to EU consumption of products from cattle, cocoa, coffee, palm oil, soy, timber, rubber, charcoal and printed paper. During the trilogue negotiations on the postponement, the European Parliament dropped its initial demand for substantial changes to the EUDR.
European Council
The Council has adopted a regulation banning the sale or export within the EU of products made using forced labour. This is the final step in the decision-making process. To strengthen enforcement, the Commission will create a database identifying forced labour risk areas and products, providing support to authorities in evaluating potential violations. Once signed by the Presidents of the European Parliament and the Council, the text will be published in the Official Journal of the European Union and will enter into force the day after publication. The regulation will apply three years after the date of entry into force.
Real Economy Progress
At a press conference, Commission President von der Leyen discussed plans to re-open and merge the Corporate Sustainability Due Diligence Directive (CSDDD/CS3D), the Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy Regulation. She emphasised the need to reduce bureaucracy and reporting burdens, while assuring that the substance of the legislation would remain unchanged. Discussions on this “omnibus regulation” highlight the need to align sustainability regulations to increase their acceptability and effectiveness, not only for businesses but also for the people it is intended to protect (read more here). However, there are concerns that standards will be lowered, weakening the position of rights holders. In addition, reopening the legislation could create uncertainty for businesses, delay progress in key policy areas and increase the administrative burden on companies already preparing CSRD reports.
German Institute for Human Rights
The EU’s Corporate Sustainability Directive (CSDDD) must be transposed into German law by July 2026, and the German Supply Chain Act (LkSG) adapted accordingly. This has triggered a highly controversial debate. This opinion piece examines whether the suspension of the LkSG or the reduction of its scope until the implementation of the EU CSDDD would violate the provisions of the UN Social Covenant. In any case, Germany will have to face the question in the forthcoming state reporting procedure under the UN Covenant on Economic, Social and Cultural Rights of whether the adaptation of the LKSG represents a step backwards when it comes to guaranteeing the Covenant rights.
NYU Stern Center for Business and Human Rights
The Business and Human Rights (BHR) field in Brazil has faced recent scandals, including sexual harassment allegations that led to the dismissal of Human Rights Minister Silvio Almeida and investigations into workplace harassment involving UN Global Compact Brazil directors. Despite these setbacks, Brazil's BHR landscape is thriving, with institutions such as FECAP and Homa advocating for greater human rights protection and education. EU regulations on human rights due diligence are pushing Brazilian companies to improve transparency and compliance in global supply chains. However, political support, peer networks and education, such as FECAP's interdisciplinary programmes, are crucial to implementing sustainable, rights-based business models.
German Institute of Development and Sustainability
At the UN Climate Change Conference COP29 in November, a new climate finance target of $300 billion by 2035 was set. While tripling the original 2009 target, it has been criticised for lacking ambition and urgency as it relies heavily on multilateral and private sector contributions, including voluntary funding from developing countries such as China. It falls short on climate finance for developing countries, while omitting key commitments to phase out fossil fuels. New carbon market rules were adopted, but criticised for their potential to violate land rights and inflate climate benefits. Civil society participation was severely restricted in Azerbaijan, with arrests and restrictions on protests undermining open dialogue. Despite calling for $1.3 trillion in climate finance to meet the needs of developing countries, the agreement offers only vague commitments with no robust provisions for vulnerable countries. Critics warn that this framework could exacerbate inequalities and weaken the commitments of the Paris Agreement.
NPR
A Dutch appeals court has overturned a landmark ruling that ordered energy company Shell to cut its carbon emissions by a net 45% by 2030 from 2019 levels, saying that “protecting against dangerous climate change is a human right“. The decision is a setback for Friends of the Earth and other environmental groups, who had celebrated the 2021 ruling. Friends of the Earth director Donald Pols vowed to continue holding polluters to account, calling the fight against climate change “a marathon, not a sprint”. The ruling coincided with the UN climate conference in Azerbaijan, which focused on financing emissions reductions and adaptation to climate change.
Reuters
Volkswagen (VW) will sell its operations in China's Xinjiang region, where rights groups have documented abuses against the Uyghur population. VW will extend its partnership with Chinese partner SAIC by a decade to 2040, a significant move in its largest market where sales have been flagging. The Xinjiang plant will be sold to Shanghai Motor Vehicle Inspection Certification (SMVIC), a unit of the state-owned Shanghai Lingang Development Group, which will retain all of its employees. SMVIC will also take over SAIC/VW's test tracks in Turpan, Xinjiang, and Anting in Shanghai. Stakeholders, including the State of Lower Saxony, VW’s second largest shareholder, welcomed the sale. The agreement appears to be mutually beneficial for both partners, removing a major reputational concern for VW and maintaining its access to the world's largest auto market.
Business Insider
Spain has introduced a law granting workers up to four days of paid climate leave after devastating floods killed over 200 people. The law aims to protect employees from being penalised for staying home during extreme weather, addressing criticism of companies that required work during the recent Valencia floods. Labour Minister Yolanda Díaz called the move a groundbreaking step for workers' rights.
The New York Times
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Loggers, primarily in the Pacific Northwest and the South, face the nation’s highest fatality rate among civilian occupations, with 100 deaths per 100,000 workers—far exceeding the average of 4 per 100,000. The job's risks stem from heavy equipment, massive trees, rugged terrain, and severe weather. Despite the dangers, loggers in Oregon earn wages 17% higher than local private-sector averages. However, the industry has declined since the 1990s due to international competition and legal battles over old-growth forest conservation.
Copenhagen Business School
Danish company boards are under growing pressure to prioritise sustainability, driven by EU regulations and recognition of its impact on risks and opportunities. While 91% of directors see the importance of integrating sustainability into strategy, nearly 70% feel ineffective in doing so, according to a BCG-INSEAD survey. Three key barriers hinder progress: unclear structures for sustainability discussions, a compliance-driven mindset, and a lack of ESG competencies. To address these challenges, boards may establish sustainability committees or integrate ESG into routine discussions, requiring directors to balance compliance with a focus on long-term value creation. While directors don’t need to be experts, understanding concepts like double materiality and emerging legislation is essential for aligning sustainability with competitiveness.
Fair Labor
Leading members of AIM-Progress and The Consumer Goods Forum Human Rights Coalition, including prominent FMCG companies, in collaboration with the Fair Labor Association and Proforest, have launched the new “Converged Human Rights and Environmental Due Diligence (HREDD) Assessment Tool”. This open-source tool aims to help companies identify, prevent and address human rights and environmental risks in their operations and supply chains. It is designed to support a variety of industries and help all types of companies improve their HREDD practices by standardising content, requirements and language, thereby promoting a consistent approach to HREDD maturity assessments across the FMCG sector and beyond.
OFI Magazine
The Roundtable on Sustainable Palm Oil (RSPO) has adopted the 2024 RSPO Principles and Criteria (P&C) and Independent Smallholder (ISH) standards, marking the first update since 2018. Approved at the 21st RSPO General Assembly in Bangkok, the revised standards focus on stopping deforestation, introducing human rights due diligence, improving smallholder engagement and simplifying audits. While welcoming the progress, the Environmental Investigation Agency (EIA) highlighted challenges such as weak enforcement, gaps in legality criteria and exceptions to the 'no deforestation' rule. RSPO certification has protected more than 646,700 hectares of critical ecosystems worldwide, reflecting its commitment to conservation and sustainability.
UNICEF
This UNICEF report aims to support the implementation of children's rights in the context of the EU Corporate Sustainability Due Diligence Directive (CSDDD). The Directive, which explicitly requires companies to identify, address and remedy their negative impacts on children's rights, has enormous potential to contribute to the respect and protection of children's rights if it is transposed and implemented with children's rights at its core by EU and national policymakers, companies, judges and regulators. The report identifies the key elements of the Directive that protect children's rights, but also finds that there are still significant gaps in companies' efforts to identify and address their negative impacts on children's rights, which are often overlooked in companies' sustainability due diligence.
Frank Bold
This report provides an analysis of the sustainability reports of 100 key companies in high-impact sectors (textiles, finance, road transport, energy, food and beverage) and a first insight into how well EU companies are prepared to comply with forthcoming EU sustainability regulations and standards. It also offers a series of recommendations for companies on how to address issues such as double materiality assessments, climate change transition plans and sustainability due diligence.
ECCHR
This paper evaluates the impact of the German Supply Chain Act (LkSG) after two years and outlines methods for rights holders to utilise this law. The aim of this paper is to inform those affected by human rights violations and environmental degradation along transnational value chains, as well as civil society organizations in producing countries, about the new law and the opportunities it offers. Its intention is to help victims and their representatives make the most effective use of this new instrument to assert their rights and demands.
Global Works
This report analyses the influence of the Chinese government and the Chinese Communist Party on two ultra-fast fashion companies, Shein and Temu. The research shows that Shein and Temu are implicated in China’s forced labour system. Their significant role in establishing a large industrial park enables them to distribute Xinjiang cotton to global markets. This park, backed by both local and national governments, is a key element of a political strategy to link Xinjiang’s cotton production and processing to the garment hubs in Guangdong.
Swedwatch
Millions of workers in Bangladesh’s ready-made garment industry are trapped in a cycle of poverty due to very low wages. A new briefing from Swedwatch highlights how these low wages affect workers’ lives and the systemic problems that perpetuate these conditions. With the recent adoption of the EU Directive on Corporate Sustainability Due Diligence (CSDDD), the briefing offers practical recommendations for global brands and policy makers.
IHRB
Businesses have a critical role to play in conflict-affected settings, where their actions can either contribute to harm or support peacebuilding and development. Recent frameworks, including the UN’s Compact for the Future, highlight the potential of business, particularly in the finance and technology sectors, to address conflict and promote stability. While some companies have engaged in initiatives to prevent harm and promote peace, geopolitical shifts and advances in technology add complexity to these efforts. Discussions at the IHRB event in Geneva highlighted the need for companies to adapt to evolving challenges, particularly in the extractives, finance and technology sectors, and to ensure that their actions are consistent with conflict resolution and sustainable development goals.
World Benchmarking Alliance
The CSDDD requires companies to identify, prevent and address negative impacts on human rights and the environment, creating a framework to hold companies accountable for the treatment of people in their value chains. This could improve working conditions, ensure fair wages and respect land and resource rights. It also aims to provide a mechanism for individuals to seek redress for harm, ensuring that their voices are heard and grievances addressed. As the focus shifts from political agreement to implementation, the European Commission is developing the necessary guidance for practical application in Member States and businesses. This briefing provides recommendations for governments, civil society and businesses to engage constructively in the implementation of the CSDDD.
Inkota
The development policy network Inkota has analysed reports on the German Supply Chain Act (LkSG) from companies in the fashion and footwear industry, including Adidas, KiK, Otto and Zalando. These show a positive impact on working conditions in global supply chains, although there is a lack of clarity and transparency in some areas. According to Inkota's research, an estimated 30 apparel and footwear companies with significant sales in Germany will be required to publicly report on their implementation from 1 January 2023. However, there is no official list of companies subject to the LkSG. The deadline for sanctions for non-compliance has been postponed several times to 2024. According to the report, seven companies with apparel and footwear supply chains have already published their reports as of 1 January 2024, demonstrating a proactive approach.