On the 8th of June 2023, the Organization for the Economic Co-operation and Development (OECD) released the updated Guidelines for Multinational Enterprises on Responsible Business Conduct.
The Guidelines, which have been embraced by 51 governments, including the majority of the EU Member States, outline voluntary principles and standards to ensure that multinational enterprises integrate due diligence practices, recognize and mitigate risks, and address adverse impacts throughout their value chains.
These Guidelines, alongside the UN Guiding Principles on Business and Human Rights and the ILO Tripartite Declaration, constitute the global benchmark for due diligence practices.
The updated Guidelines, the first revision since 2011, came into effect from June 8th, with a primary focus on due diligence recommendations related to climate, technology, the utilization of services and products, and the protection of vulnerable populations.
What has changed:
Companies are encouraged to ensure that their emissions reduction targets align with the temperature objectives outlined in the Paris Agreement and are based on scientific findings from the IPCC (Intergovernmental Panel on Climate Change).
The updated Guidelines emphasize the importance of conducting Due Diligence assessments on the downstream segment of the value chain. This includes considerations on how products will be used and the potential impacts.
The OECD’s update strengthens recommendations to combat corruption, recognized as a key contributor to adverse impacts within value chains. Apart from traditional bribery, the Guidelines now encompass other forms of corruption, such as trading in influence, embezzlement, and misappropriation of donations.
Companies are encouraged to refrain from retaliating against individuals who raise concerns and investigate their activities.
The Guidelines provide additional guidance regarding free, prior, and informed consent, which allows indigenous communities to approve or reject projects affecting their territories.
These Guidelines are widely adopted by businesses in global supply chains across various sectors and are increasingly used as a reference point for government policymaking, such as the ongoing negotiations regarding the proposed European Corporate Sustainability Due Diligence Directive (CSDDD) which fourth round of inter-institutional negotiations (trilogues) is tentatively expected to take place in the second half of November 2023 and its adoption is expected by the end of the current European Commission’s mandate.
GET READY FOR CSDDD
To help companies getting ready to comply with the CSDDD, CSR Europe has developed the EU Alignment Service. This service aims to fill existing gaps in companies’ current strategies and anticipate the adaptation process, vis-á-vis the requirements of the different pieces of legislation that are currently under discussion, including the CSDDD. To know more, get in touch with Lorena Sorrentino, Manager, Markets Manager (firstname.lastname@example.org)
For more information:
Contact Giorgia Miccoli, EU Affairs Senior Specialist