One Framework, Many Regulations: Human Rights & Environmental Due Diligence

Rachel Kanter Kepnes

Principal Consultant

Amy Winters

Senior Consultant

Amanda Fefferman

Associate Director

North America

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Amanda Fefferman

Amanda brings over 10 years’ experience helping companies manage environmental impacts and supply chains. Amanda leads supplier engagement programmes, supporting robust scope 3 strategies and sustainability initiatives.

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Table of Contents

• Get to know the regulations
• Similarities and differences
• What companies need to do now
• How Anthesis can help

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Over the last two decades, there has been a significant uptick in legislation related to sustainability and supply chain human rights and environmental due diligence (HREDD). These regulations reflect a broader shift from voluntary standards and initiatives to legal compliance, intended to ensure companies prevent, address, and remediate adverse impacts on human rights and the environment, regardless of internal commitment levels.

As regulation has matured, requirements have evolved from transparency and reporting obligations, such as the UK Modern Slavery Act and California Transparency in Supply Chains Act, to mandated due diligence processes, including the Corporate Sustainability Due Diligence Directive  (CSDDD) and, ultimately, to import and market bans that impose business consequences for links to human rights harms, specifically forced labor, such as the U.S. Uyghur Forced Labor Prevention Act (UFLPA)  and the EU Forced Labour Regulation  (EUFLR).

These regulations enshrine the principles outlined in the United Nations Guiding Principles on Business and Human Rights and OECD Due Diligence Guidance for Responsible Business Conduct into law, effectively translating them into legal requirements with financial and business implications.  

While the influx of regulations can feel overwhelming for businesses, establishing a strong HREDD system supported by supply chain traceability can prepare companies to confidently comply with emerging legislations.

Get to know the regulations

Similarities and differences of the regulations

How they are similar:

• All of these laws are intended to create a more sustainable future and protect the environment and human rights.
• They rely on the backbone of the UNGPs and OECD Guidelines.
• They carry legal penalties and/or business costs for non-compliance.

How they are different:

They each have different scopes, enforcement mechanisms, and intended outcomes.

• Reporting and disclosure laws require companies to report on what they are doing, but do not explicitly mandate specific actions.
• HREDD laws require companies to document and implement actions to identify, assess, and mitigate their impacts, including remediation where necessary.
• Import and market bans require companies to demonstrate the effectiveness of their actions. Companies must be prepared to prove that their products are free from forced labor and provide evidence that risks have been identified and effectively addressed. Failure to do so can result in products being denied entry to, or being removed from, the market.   

What companies need to do now

Building a strong, integrated HREDD system is essential to meet a growing range of environmental, human rights, and trade requirements. While individual regulations may differ, many rely on the same core capabilities.

In practice, here are four key steps companies can take to get started:

1. Know your supply chain: Many companies know their Tier 1 suppliers but lack visibility deeper into their supply chain. These regulations make supply chain traceability imperative instead of just “nice to have.” Limited visibility is no longer an acceptable defense against accountability. Companies are increasingly expected to trace their full supply chain to identify, prevent, and remediate areas where they may cause, contribute to, or be directly linked to adverse human rights or environmental impacts.
2. Assess your risks: There are many risk assessment tools that companies can use today to identify the risks in their supply chain. Geography, climate and international politics can all impact a company’s level of risk within their supply chain. Companies can use risk assessments based on publicly available data to identify high-risk areas and then layer in company-specific data using audits and other assessment tools.
3. Prioritise your efforts: No company can do everything, everywhere. Companies can use risk assessments to identify their highest risks and then prioritise their efforts based on their own connection to those impacts and where they have the most leverage within their operations and supply chain. This enables companies to use their resources in the most impactful and effective way.  
4. Build cross-functional ownership: Compliance with these laws cannot be owned or managed by one team alone. It requires collaboration across the business, including sustainability, operations, human resources, procurement and sourcing, legal, trade compliance, and more. A high-functioning working group or task force with sufficient training, authority and accountability position companies for successful regulatory compliance related to environmental and human rights impacts.  

Companies that invest in these foundational capabilities will be better positioned to navigate today’s regulatory requirements and adapt to evolving expectations.

How Anthesis can help

For those who are new to human rights and environmental due diligence, our team can do a gap analysis and build an integrated roadmap to get you started.

For those who have been working on these topics for a while but in isolation, our team can connect the dots across existing activities, processes, and stakeholders to create an integrated approach to HREDD and regulatory compliance.

Finally, for those that feel prepared for upcoming compliance deadlines, Anthesis can stress-test your systems by checking your internal controls. We can also support with end-to-end managed systems for cross-regulation data collection, analysis, reporting, and disclosure, aligned with regulatory compliance deadlines and internal decision-making timelines.