{"id":14684,"date":"2021-07-05T11:00:18","date_gmt":"2021-07-05T11:00:18","guid":{"rendered":"https:\/\/crigroup.com\/?p=14684"},"modified":"2024-01-23T15:07:02","modified_gmt":"2024-01-23T15:07:02","slug":"corporate-due-diligence-and-accountability","status":"publish","type":"post","link":"https:\/\/crigroup.com\/ar\/corporate-due-diligence-and-accountability\/","title":{"rendered":"New European Parliament Corporate Due Diligence and Corporate Accountability"},"content":{"rendered":"
\u00a0<\/span><\/p>\r\n Corporate due diligence and corporate accountability, ending an era of voluntary policing. A new\u00a0<\/span>EU mandate<\/span><\/a>\u00a0places liability on companies unable to assess and mitigate unethical third-party behaviour. New legislation requires companies operating in the EU to ‘identify, address and remedy their impact on human rights and the environment throughout their global value chains.’<\/span><\/p>\r\n Global economies have significantly benefited from an increase in cross-border and international business partnerships, which has led to a substantial expansion of the global value chain. Subsequently, more and more companies are being exposed to potential liability by unscrupulous third-party providers in their supply chain pipeline with little respect for business ethics, human rights or the environment.<\/span><\/p>\r\n There is a growing concern worldwide of the many supply chain businesses linked to severe abuses, including exploitative working conditions, modern slavery and child labour, toxic pollution, rampant destruction of rainforests and a general disregard for corporate governance.<\/span><\/p>\r\n For decades, companies have voluntarily monitored supply chain partners for bad behaviour, but this self-policing has limited. But now, the<\/span>\u00a0European Union Parliament<\/span><\/a>\u00a0has presented mandates for EU businesses \u2013 under penalties of law – to carry out due diligence to identify, prevent, mitigate and account for actual or potential human rights violations and negative environmental impacts in their operations and supply chain.\u00a0<\/span><\/p>\r\n “We live in a world where businesses with the wherewithal can still shift their adverse social and environmental impact to the most vulnerable people and places on the planet.” Lara Ianthe Wolters, Member, European Parliament<\/span><\/em><\/p>\r\n The legislation requires companies operating in the EU to identify, address and remedy their impact on human rights (including social, trade union and labour rights), the environment (contributing to climate change or deforestation) and good governance (such as corruption and bribery) throughout their value chain.<\/span><\/p>\r\n This is akin to saying that if a company fails to conduct due diligence on a third-party partner that engages in slave labour, pollutes the environment, manipulates the price or violates jurisdictional regulations, that company is essentially complicit in the partnering company’s illegal behaviour. It may be held liable in a court of law.<\/span><\/p>\r\n Aside from legal and monetary penalties, the company further risks a tarnished reputation in the market and a devaluation of its brand.<\/span><\/p>\r\n It’s crucial for businesses utilising global supply chain partners to conduct due diligence and assess the potential risks that a third party may pose to your organisation, particularly when addressing risks associated with environmental damage and human rights violations.<\/span><\/p>\r\n CRI Group\u2122 developed a highly specialised assessment solution for Corporate Situation Analysis:<\/span><\/strong><\/h3>\r\n
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The Challenge: You are Liable for the Conduct of Your Partners; Lack of Due Diligence will Get you into Trouble<\/span><\/strong><\/h3>\r\n
The Solution: Identify Unethical Behaviour and Protect Your Organisation with 3PRM, Corporate Due Diligence and Risk Management<\/span><\/strong><\/h3>\r\n