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Human Rights Due Diligence
Human rights due diligence refers to a series of initiatives through which a company identifies, prevents, and mitigates negative impacts on human rights within its own operations, group companies, and supply chains; evaluates the effectiveness of these efforts; and discloses and explains how they have been addressed.
© Hiroyuki Hayashi
The increasing importance of companies respecting human rights as economic activity becomes more globalized
In recent years, with the advancement of globalization, the impact of corporate activities on society has become increasingly substantial, and companies are being asked to assume even greater social responsibility. In this context, the idea of human rights due diligence—which involves respecting human rights in business activities—is gaining attention.
“Human rights” are rights that all people are born with, such as the right to life, the right to property, the right to pursue happiness, freedom of expression and movement, and equality under the law. “Due diligence” is a business term used to refer to the process by which an acquiring company in a merger and acquisition pre-emptively investigates the financial, legal, and human resources risks of the target company. The combination of these two concepts is “human rights due diligence,” which refers to a series of company efforts to investigate and identify the risk of human rights violations within their own company, group companies, and supply chain; take measures to prevent and mitigate them; and then verify and disclose the results. Corporate human rights initiatives gained international recognition in 1999 when then-UN Secretary-General Kofi Annan proposed the UN Global Compact*1, which aimed to build a sustainable society through collaboration between the UN, companies, and organizations. Furthermore, in 2011, the UN Guiding Principles on Business and Human Rights (UNGPs)*2 were unanimously endorsed by the United Nations Human Rights Council. In response to this global trend, the Japanese government formulated the “National Action Plan on Business and Human Rights (2020–2025)”*3 in 2020. We are therefore promoting the introduction of human rights due diligence, which enables companies to identify potential human rights violations in their business activities and take steps to make improvements.
Human rights that companies must respect, and continuous improvement throughout the supply chain
Companies must respect the human rights of not only their own employees and those of their group companies but also of all their stakeholders, including job seekers, employees of business partners, customers, consumers, and residents of the local community. Particularly, when it comes to business partners, it is necessary to pay attention to the entire supply chain: not only direct business partners, but also second- and third-tier subcontractors, raw material suppliers, distributors, and retailers.
Furthermore, the types of human rights violations that companies must be mindful of range from extremely serious cases to easily overlooked everyday cases. Typical examples of issues affecting employees and workers include forced labor and child labor, which are often seen in offshore contexts; unreasonably long working hours and overtime work; poor working conditions; violations of the right to organize, such as preventing the formation of labor unions; and discriminatory treatment based on race, nationality, sex, or gender. For customers and consumers, these include safety issues and health hazards due to product defects and inappropriate handling of personal information. In local communities, this could include environmental pollution and the destruction of nature, and in some countries and regions, violations of the rights of indigenous peoples.
In order for a company to effectively implement its human rights due diligence, it is important to establish an improvement process. First, management, including the top executive, clearly declares their intention to respect human rights; then formulates a “human rights policy” and announces it to both internal and external stakeholders, including employees and business partners.
Next, based on this policy, companies identify the risks of human rights violations that may exist within their company and throughout their supply chain, assess their urgency, and set priorities for their response. To this end, companies collect relevant information by conducting surveys and interviews with employees and business partners, interviewing the relevant internal departments, and engaging in dialogue with external stakeholders such as NGOs*4.
Based on the identified human rights risks, companies encourage the relevant party to take measures to mitigate them, taking into account the relationship between them, and follow up as necessary to support their realization. The implemented measures are thereafter verified through further surveys and other means, and on-site inspections may also be conducted to assess the effectiveness of the improvements. By carrying out these efforts repeatedly and continuously, rather than just once, companies can build stronger processes and reduce the risk of human rights violations. It is also important for companies to disclose information regarding their human rights due diligence. Examples of information to be disclosed include measures taken to embed human rights policies throughout the entire company, identified significant risk areas, identified and prioritized significant adverse impacts or risks, prioritization criteria, information on measures to prevent and mitigate risks, and information on effectiveness evaluations.
Building a better society by increasing individuals’ human rights awareness
Today, human rights due diligence has become an essential aspect of corporate activities. In Europe and the United States, this is becoming increasingly mandatory and legislated, and its adoption is spreading among Japanese companies, particularly large ones. For multinational businesses, this requirement has become a challenge they can no longer ignore.
Human rights due diligence is not simply a system but an initiative that instills awareness of “not harming people” and “not treating people unfairly” into corporate activities. Its essence is to create an environment in which all people can work and live with peace of mind. When companies consistently maintain and embody such sincere attitudes, they build trust among stakeholders such as customers and investors. Furthermore, the resulting improvements to the company’s brand image will ultimately contribute to its competitive advantage and sustainable growth.
However, ideas about human rights have not yet been fully adopted in Japan. As such, companies are being called upon to take the lead in demonstrating their respect for human rights. Companies influence society through their interactions with many people and organizations, and their thoughts and actions gradually spread to business partners, customers, and even the general public.
Furthermore, a company cannot effectively advance this initiative through only a select number of specialized departments, such as the legal or procurement departments; above all, it is essential that every employee is aware and engaged. It is important to deepen human rights awareness through training and other opportunities and to pay attention not only to forms of harassment, such as power harassment and sexual harassment, but also to the potential harm from actions that one may perceive as “good.”
In your daily work life, never forget to consider the other person’s position and treat them with compassion. The accumulation of such small acts of awareness will foster a mindset that respects human rights, which will eventually spread throughout society, allowing everyone in society to live in peace.
- *1: The United Nations Global Compact (UN Global Compact)
An initiative in which the United Nations collaborates with companies and organizations to build a sustainable society. Participating companies and organizations are required to agree to 10 principles related to “protecting human rights,” “eliminating unfair labor practices,” “responding to the environment,” and “preventing corruption” and to continue to take concrete action accordingly. - *2: UN Guiding Principles on Business and Human Rights (UNGPs)
It comprises three pillars: “State obligations to protect human rights,” “Corporate responsibility to respect human rights,” and “Access to remedy,” and clearly defines the prevention, response, and remedy of human rights violations. - *3: National Action Plan on Business and Human Rights (2020–2025)
Based on United Nations Human Rights Council’s Guiding Principles on Business and Human Rights, the guideline outlines various measures that the government will undertake in the future and encourages companies to identify, prevent, mitigate, address, and disseminate information about their impacts on human rights, as well as to implement human rights due diligence. - *4: Non-governmental organization (NGO)
A non-governmental organization works independently of the government to solve social issues and is involved in a wide range of activities, including international cooperation and humanitarian aid. - This article is a translation of the Japanese version published on January 9, 2026.
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