Ana Santos Duarte is an Executive Committee Member and Associate Researcher at the NOVA Centre on Business, Human Rights and the Environment and a lawyer with solid experience in Business & Human Rights and Corporate Sustainability.
This reflection was originally published in the 3rd edition of the Newsletter of the National Contact Point of Portugal.
On November 19th, the auditorium of the Calouste Gulbenkian Foundation became the stage for inspiring reflections on corporate sustainability. Under the theme ‘Unpacking Human Rights and Environmental Due Diligence’, political decision-makers, business leaders, experts, civil society representatives and academics gathered to analyse the due diligence process – from the initial commitment to respect human rights and the environment, through identifying and prioritising risks, to implementing measures, monitoring and ensuring transparent communication. The topic discussed comes at a crucial time in the history of sustainability.
We are witnessing the transition from voluntary principles laid down in soft law instruments, such as the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, to legal obligations, such as those laid down in the Corporate Sustainability Due Diligence Directive (CS3D). This new piece of legislation imposes a responsibility on companies to respect human rights and the environment. In this sense, and given the rapid evolution of the legal landscape, companies are required to act beyond mere legal compliance, and must adopt a proactive and holistic approach to responsible business behaviour.
I. From commitment to action: the real challenge
One of the themes discussed in the first panel was the recognition that commitment is only the first step and implementation is the real challenge. Respecting human rights and the environment must be embedded in the DNA of companies and their operational practices. However, as Nichole Solomons emphasised, companies need clear structures and a diagnosis of existing practices in order to determine concrete and consistent actions.
Among the speakers, the consensus was clear: while legislation offers an important basis, the real impact depends on genuine business commitment and meaningful implementation.
II. A risk-based approach: there are no universal solutions
Another aspect emphasised was the importance of understanding the unique risks and impacts of each business and its value chain. It was emphasised that due diligence should not be reduced to a bureaucratic exercise or a set of checklists. This, as described in the CS3D, is an ongoing, risk-based process where companies must prioritise their actions by considering their salient risks.
As emphasised by Céline da Graça Pires, it is essential for companies to be proactive. As well as acting as soon as possible, they must also look at these issues not as threats, but as opportunities that could drive positive change and strengthen their competitive advantage.
III. Stakeholder involvement: the essence of due diligence
The key message throughout this third panel was the importance of meaningful involvement of all stakeholders. Due diligence will only be effective if companies truly listen to affected communities, employees, non-profit organisations and other stakeholders. For this to happen, it is imperative to remember that the best strategies and results come from inclusive and transparent dialogues and not just isolated decisions by boards of directors. This involvement is undoubtedly the essence of a responsible and sustainable approach.
IV. Transparency and responsibility: pillars of trust
In the fourth panel, speakers explored the difficulties associated with monitoring, reporting and communication. They discussed how the reporting requirements of the CS3D and the Corporate Sustainability Reporting Directive (CSRD) should be recognised as strategic opportunities to promote a culture of accountability and continuous improvement. It also highlighted the role of transparency as a key driver for building trust and dialogue with stakeholders.
V. Supporting the entire value chain: the role of large companies
Throughout the day, the indirect impact of the CS3D on small and medium-sized enterprises (SMEs) has been mentioned. Although they are not directly covered by the directive, its impacts will be inevitable. In this context, the need to promote collaboration based on shared responsibility was discussed, where large companies will be key in supporting SMEs. This support can materialise in different ways, namely through capacity building, knowledge transfer, technical support and joint initiatives. Finally, it was also important to reflect on how a resilient and sustainable value chain can only be built with coordinated efforts and shared common values.
VI. From text to practice: the way forward
The CS3D establishes a legal basis, but its effectiveness will depend on its practical implementation. Despite the long road already travelled, there is still a major challenge: how to foster a business culture where sustainability due diligence is not seen as a burden, but as a strategic opportunity to innovate, be more resilient and increase competitiveness.
In conclusion, the 4th Annual NOVA BHRE Conference stood out as a privileged space for reflection and knowledge exchange, but above all as a catalyst for collective dynamics. The challenges we face in the field of corporate sustainability are vast and complex, requiring a coordinated and proactive response from companies, governments, experts, civil society, academia and new generations.
However, this complexity should not be an obstacle, but an incentive to action. The shared reflections do not represent an end, but a starting point for joint progress towards tangible and lasting solutions.
The path is clear: collaboration and commitment to concrete actions are non-negotiable. Because the future we want – fairer and more sustainable – will be defined by the decisions and steps we take today.
Suggested citation: A. S. Duarte ‘A reflection on the 4th Annual Conference of the NOVA Centre for Business, Human Rights and the Environment‘, Nova Centre on Business, Human Rights and the Environment Blog, 26 December 2024