Dutch AGT launches responsible business conduct guide

The 'Practical guide for companies on IRBC and OECD due diligence' formed the basis of AGT's annual assessment of the fashion brands and retailers among its members. IRBC stands for international responsible business conduct.

Under the EU Due Diligence law, companies will be required to identify and, where necessary, prevent, end or mitigate adverse impacts of their activities on human rights, such as child labour and exploitation of workers, and on the environment, for example pollution and biodiversity loss.

According to the European Commission, the new rules will bring legal certainty and a level playing field for businesses, while for consumers and investors, they will provide more transparency.

The proposal establishes a corporate sustainability due diligence duty to address negative human rights and environmental impacts, it adds.

Industry stakeholders have been calling for a due diligence law for some time that holds companies responsible for the happenings in their supply chains, and that goes beyond voluntary action. Countries including Germany and The Netherlands have implemented their own versions.

The new due diligence rules will apply to EU companies and non-EU companies active in the EU with specific turnover conditions. But small and medium enterprises (SMEs) are not directly in the scope of the proposal. The proposal applies to the company’s own operations, their subsidiaries and their value chains.

National administrative authorities appointed by member states will be responsible for supervising these new rules and may impose fines in case of non-compliance. In addition, victims will have the opportunity to take legal action for damages that could have been avoided with appropriate due diligence measures.