2024 Articles

Corporate Sustainability Due Diligence

Shulman, Skylar

Ever since the concept of Corporate Social Responsibility (CSR) be-gan to take off in the 1970s, multinational corporations (MNCs) and international organizations have attempted to implement a variety of voluntary initiatives to detect and prevent human rights and environ-mental abuses within corporate supply chains. Despite these voluntary initiatives, however, human rights violations and environmental dam-age have continued to occur frequently within the supply chains of MNCs, leading to increased calls for binding, “hard law” remedies. The adoption of the United Nations’ Guiding Principles on Business and Human Rights (UNGPs) in 2011 catalyzed efforts to adopt domestic mandatory human rights due diligence (mHRDD) laws, and since 2017, a growing number of nations have passed more comprehensive human rights and environmental due diligence (HREDD) laws that recognize the connection between human rights and the environment. The most ambitious HREDD proposal thus far is the European Union’s proposed Corporate Sustainability Due Diligence Directive (CS3D), which, when enacted, will impose mandatory human rights and environmental due diligence requirements on corporations that conduct business in the European Union.
This Note assesses the feasibility and desirability of adopting domes-tic HREDD legislation in the United States based on the framework provided by the EU’s proposed CS3D. The predominant reliance in the U.S. on voluntary CSR initiatives and limited disclosure regulations is insufficient to prevent human rights and environmental abuses in the supply chains of US-based MNCs. This Note argues that the proposed CS3D provides a promising model for how Congress could take strong-er action in this area. Although it would not completely prevent adverse impacts and could be initially challenging to implement because of the ambiguity surrounding its scope, comprehensive federal HREDD legislation based on the CS3D framework would be a significant step towards filling in the gaps in U.S. corporate accountability.