The global business landscape has undergone a significant transformation in recent years, with human rights risk management evolving from a peripheral corporate concern to a central strategic imperative. This shift reflects growing stakeholder expectations, increased regulatory scrutiny, and heightened awareness of corporate human rights impacts throughout global value chains.
Key global developments
Legislative momentum across jurisdictions: Governments are implementing mandatory human rights due diligence legislation, fundamentally altering the compliance landscape. The European Union’s Corporate Sustainability Due Diligence Directive, France’s Corporate Duty of Vigilance Law, and Germany’s Supply Chain Due Diligence Act represent a new era of legally binding human rights obligations for businesses. Similar legislation has been introduced in South Korea and in Thailand, with the focus on mandating human rights due diligence.
Stakeholder pressure: Investors, consumers, and civil society organisations increasingly demand transparency and accountability regarding human rights practices. Environmental, Social, and Governance (ESG) criteria now prominently feature human rights considerations, influencing investment decisions and corporate valuations.
Technology integration: Organisations are leveraging technology to enhance human rights risk identification and monitoring. Artificial intelligence, blockchain, and satellite imagery are being deployed to trace supply chains and identify potential human rights violations in real-time.
Sector-specific focus industries such as textiles, electronics, agriculture, and mining, face particular scrutiny due to their historically high exposure to human rights risks. This has led to sector-specific initiatives and collaborative approaches to address systemic challenges.
Evolving legislative frameworks bring human rights risk to the focus
The proliferation of human rights legislation has fundamentally reshaped how organisations approach risk management and reporting. Modern slavery acts in the United Kingdom, Australia, and California have established mandatory disclosure requirements, compelling companies to examine their supply chains with unprecedented rigour.
The UK Modern Slavery Act 2015 requires commercial organisations with annual turnovers exceeding £36 million to publish annual statements detailing steps taken to ensure slavery and human trafficking are not occurring in their business or supply chains. Similarly, Australia’s Modern Slavery Act 2018 mandates reporting for entities with consolidated revenue of AUD $100 million or more. These legislative frameworks have created a domino effect, encouraging organisations to develop comprehensive human rights due diligence programmes that extend far beyond mere compliance.
The emergence of mandatory human rights due diligence laws across Europe, alongside new legislation in Thailand and South Korea, represents the next evolutionary step. These regulations require companies to identify, prevent, mitigate, and remedy adverse human rights impacts throughout their value chains. This legislative trend has prompted organisations to invest significantly in human rights expertise, stakeholder engagement mechanisms, and grievance procedures, transforming human rights from a reputational consideration to a legal imperative with potential financial and criminal sanctions for non-compliance.
Growing emergence of human rights performance benchmarking and reporting frameworks
The landscape of human rights benchmarking has become increasingly sophisticated, with multiple organisations developing comprehensive assessment methodologies to evaluate corporate performance.
Corporate Human Rights Benchmark (CHRB) represents one of the most comprehensive assessments of corporate human rights performance across high-risk sectors including agricultural products, apparel, extractives, and information technology. The benchmark is based on OECD guidelines, and the UN Guiding Principles on Business and Human Rights, and it evaluates across multiple areas:
- Policy commitments and governance
- Embedding respect for human rights in culture and systems
- Human rights due diligence processes
- Remedies and grievance mechanisms
- How companies respond to serious human rights allegations
CHRB’s methodology provides detailed scoring across these domains, offering organisations actionable insights for improvement. CHRB relies on publicly disclosed information such as company reports, sustainability disclosures, websites and formal submissions via the CHRB disclosure platform.
KnowTheChain (KtC) is a sector-specific benchmarking tool focused primarily on how companies identify and address forced labour risks in their supply chains, key sectors covered include Information Technology, apparel and footwear, and food and beverage sectors. Its core objective is to incentivise better corporate responses to forced labour through transparency and comparison between peers. Rather than covering all human rights, KtC zeroes in on forced labour due diligence. Key evaluation themes include:
- Company commitments to forced labour prevention
- Due diligence and risk assessment processes
- Purchasing and recruitment practices that affect worker vulnerability
- Monitoring and remediation of forced labour risks
- Engagement with workers and their representatives
By spotlighting forced labour risk management, KtC helps companies and investors understand where practices fall short, especially in how supply chains are governed and how worker protections are implemented.
Human Rights Resource Centre Reporting: The Business & Human Rights Resource Centre maintains extensive databases tracking corporate human rights performance, allegations, and responses. Their annual reports on modern slavery statements and human rights due diligence provide valuable comparative analysis across industries and jurisdictions, highlighting best practices, and common deficiencies in corporate reporting.
Monash University Modern Slavery Benchmarks: Monash University’s research on modern slavery reporting has established influential benchmarking criteria, particularly focusing on Australian and UK legislative compliance. Their analysis examines statement quality, due diligence processes, and remediation mechanisms, providing organisations with detailed feedback on reporting effectiveness and identifying areas for enhancement.
Additional Benchmarking Initiatives: The Ethical Trading Initiative and Fair Labor Association provide sector-specific benchmarking and certification programmes. Academic institutions such as the University of Greenwich and NYU Stern have developed complementary assessment frameworks examining disclosure quality and implementation effectiveness.
Emerging Assessment Tools: New AI-powered benchmarking tools provide an enabling platform to swiftly analyse a vast number of company disclosures, for substantive content and compliance quality. These technological innovations are creating more nuanced and comprehensive evaluation mechanisms, enabling real-time performance tracking and comparative analysis.
Embracing Benchmarks as Strategic Tools
Organisations must recognise that the proliferation of human rights benchmarking represents both a challenge and an opportunity in today’s increasingly transparent business environment. The visibility of these assessments means that poor performance can result in significant reputational damage, regulatory scrutiny, and stakeholder pressure that ultimately impacts business sustainability and profitability.
Rather than viewing benchmarks merely as external evaluation mechanisms, forward-thinking organisations should strategically leverage these frameworks as diagnostic tools for continuous improvement. The methodologies employed by leading benchmarking organisations, such as CHRB’s comprehensive governance assessment, KnowTheChain’s supply chain focus, and academic institutions’ rigorous analytical approaches, provide valuable blueprints for developing robust internal human rights risk management systems.
Companies should systematically analyse benchmark criteria to identify gaps in their current due diligence processes, using these insights to strengthen policy frameworks, enhance stakeholder engagement mechanisms, and improve remediation procedures. By proactively aligning internal practices with benchmark expectations, organisations can transform potential reputational risks into competitive advantages, demonstrating genuine commitment to human rights whilst building resilient and sustainable business models.
The Mekong Club’s Modern Slavery Baseline Assessment plays a crucial role as a diagnostic tool for organisations seeking to evaluate their human rights due diligence (HRDD) readiness. By systematically assessing a company’s governance structures, policies, supply chain mapping, and remediation capabilities, the baseline assessment provides a clear view of current strengths and areas requiring improvement. This evidence-based approach enables businesses to prioritise corrective actions, allocate resources effectively, and align internal practices with emerging global standards such as the UN Guiding Principles and modern slavery legislation. Beyond compliance, the assessment supports a culture of continuous improvement, helping companies demonstrate proactive commitment to ethical business conduct while strengthening stakeholder confidence and trust.
Author: Kate Skattang, Technical Advisor at The Mekong Club
