By Julien Larrenduche, Social Footprints Project Manager at EVEA
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Due diligence" is an expression that is increasingly in the news, in the context of ongoing legal proceedings or in the context of draft agreements or regulations on a European and global scale.
But do you really know what is behind this expression? How can you ensure that you comply with this due diligence? And how can life cycle assessment help you?
The duty diligence in brief
A little background
Ten years ago, on April 24, 2013, 1135 people perished in the collapse of the Rana Plaza in Bangladesh. This building housed garment factories for various Western clothing brands. This date marks the beginning of an awareness and a crying need to create a regime of responsibility of multinational companies towards their subsidiaries and their subcontractors.
Since then, the term "due diligence" has become a general principle in the political and economic spheres, which consists in making companies responsible for preventing human and environmental tragedies [1].
In French law
In 2017, France was one of the first states to adopt a duty of care law [2]. Since then, large companies (with more than 5,000 employees in France) must publish a vigilance plan with regard to the risks of violations of "human rights and fundamental freedoms, the health and safety of people and the environment" throughout their value chains.
This vigilance plan must include:
- A mapping of social and environmental risks
- Regular assessment procedures
- Appropriate actions
- A warning mechanism
- A follow-up mechanism
Although the penalty initially provided for (up to 10 million euros) was finally removed by the Conseil constitutionnel (Constitutional Council), a company may be given formal notice and then taken to court if it does not comply with its obligations within three months of the formal notice. A dozen large French companies are currently the subject of legal proceedings.
Life cycle assessment (LCA): a tool to meet the requirements of the duty of care
How can we ensure that social and environmental risks are identified and prevented throughout a product's value chain, when each of the product's components may go through several stages of transformation in a multitude of countries?
It is in this context that a life cycle approach becomes essential. Social and environmental LCAs make it possible to identify, assess and control social and environmental impacts and risks throughout the product life cycle.
A holistic approach...
The fundamental principle of life cycle assessments, whether social or environmental, lies in a 360° approach that takes into account
All the components of the product
On all the stages of its life cycle
Via a multi-indicator evaluation to avoid potential impact transfers
And by considering all stakeholders, mainly in social LCA
...to prioritize your actions
In addition to this holistic approach, social and environmental LCAs provide an assessment of impacts and risks, which is essential in the framework of the vigilance plan. They are also a tool for identifying the main contributors to these impacts (life cycle stage, component, geographical area, etc.). Based on this assessment, organizations can then prioritize their corrective actions.
LCAs are an ideal tool for establishing a vigilance plan. However, their primary objective is to improve products and services in an eco-socio-design logic.
Developments to follow
The due diligence remains a topical issue. In particular, we will have to follow the developments of the European directive on Coporate Sustainability Due Diligence (CSDD), which should make this duty of care compulsory for a greater number of companies, even if the content of this European regulation is currently under debate [3]. After an initial proposal for a directive from the European Commission in February 2022 and a new text proposed by the member states in December, debates are continuing in the European Parliament until May, when a text should be submitted to a vote [4].
In addition, the United Nations Human Rights Council established an intergovernmental working group on transnational corporations, other business enterprises and human rights in 2014. This group is working on the development of a legally binding instrument to regulate, within the framework of international human rights law, the activities of these corporations. The 8th session took place in October 2022, during which a larger number of states mobilized to negotiate the 3rd revised version of the draft instrument [5].
EVEA supports you
At EVEA, we accompany organizations towards more responsible product offerings, thanks to a solid methodological expertise.
We offer you solutions to :
- Map risks, thanks to social and environmental assessments, according to life cycle analysis methods.
- Take into account all direct and indirect stakeholders, and thus ensure that the entire sphere of influence of the organization is considered. According to the evaluation report on the implementation of the law on the duty of care [6], "too many companies still understand vigilance as a tool to protect their interests and reputation. Their approaches are therefore turned towards themselves and not towards the outside world. These companies have not understood that they must consider the rest of the world, think and act to protect human rights, the environment, health and safety throughout their sphere of influence.
- To manage and monitor performance thanks to our experience in the implementation of corrective actions, support for the eco-socio-design of products and the provision of software tools that we develop. ▪️
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TO GO FURTHER:
News articles:
Visions of NGOs:
Offical texts:
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