How many times a client asked me for a separate human rights due diligence because a lender asked for a document like that? I lost count. It is unfortunate that social due diligence and social performance is still not associated with human rights to the extent it should be. A lot of companies scramble to make sense of human rights and what is actually applicable to their operations and their business. As the EU is adopting new directives (hello CSDDD), I have been reflecting on how human rights due diligence (HRDD) differs from the social topics typically covered in a social impact assessment or social due diligence. Given my exposure to performance standards and requirements, I’m particularly interested in the overlaps and potential gaps between HRDD, performance standards and other frameworks that guide companies’ social and environmental risk management. I remember discussing a human rights performance requirement at a previous jo like 13 years ago. The conclusion was that the requirements adequately cover the human rights that are relevant for the project and the company’s operations. Let’s see if it is still true in 2025.
Human Rights Due Diligence vs. Social Due Diligence
HRDD is fundamentally rooted in international human rights law. It focuses on ensuring that businesses identify, prevent, mitigate and account for the adverse impacts of their activities on universally recognised human rights. It draws its foundation from frameworks like the UN’s Guiding Principles on Business and Human Rights, which outlines a global standard for corporate respect for human rights. Yes, it is not as pragmatic as the performance focused standards, but it’s a good starting point to guide companies towards relevant issues.
In contrast, social due diligence is often used to verify alignment with the lender requirements. These assessments are tied to a specific project (or in the case of corporate loans to the corporate level management systems) and evaluate the broader social implications of activities, such as labour practices, community health, safety and security, land acquisition, impacts on livelihoods, supply chains, stakeholder engagement, gender issues and complaints management. While there is clearly an overlap between the approaches, they differ in scope, legal grounding and application.
The Role of Legal Instruments in Human Rights and Social Due Diligence
One of the key differences lies in the legal and regulatory frameworks underpinning each process. HRDD is tied to international human rights aw, which provides binding obligations for states and guiding principles for corporations. However, enforcement of HRDD at the corporate level remain patchy and it largely reliant on voluntary adherence unless mandated by national or regional legislation – as we see with the evolving CSDDD.
By contract, IFI standards are only binding for companies seeking finance from these institutions. I must note that more and more commercial banks (even those that left EP), still include some of these requirements under their corporate policies. The IFI standards for managing environmental and social risks are robust, specific to the project, the site or the corporate operations financed by the banks. While the standards are not a legal obligation, they are building on the protocols and legislation governing social protection, environmental impact assessments, biodiversity conservation and land rights.
Overlaps Between Human Rights and Social Due Diligence
There is undeniable overlap between HRDD and social due diligence. Both processes aim to identify risks and impacts on people, particularly those who are vulnerable and disadvantaged. Furthermore, human rights issues often intersect with social and environmental concerns.
For example:
Labour rights violations may arise as part of broader social and economic impacts
Environmental degradation can lead to violations of rights such as access to clean water or the right to health.
The UN Global Compact and IFC addressed this overlap in the 2010 Guide to Human Rights Impact Assessment and Management (HRIAM). This guide supports businesses in assessing and managing human rights risks and impacts, proposing an approach that closely mirrors traditional social impact assessments. I’ve personally never seen this Guide implemented on my projects, but feel free to share your experiences with implementation.
Distinctions in Scope and Methodology
This wouldn’t be my blog if I didn’t talk about the scope and context in which these assessments are undertaken. Despite the similarities, HRDD takes a more rights-based approach and includes additional dimensions that are often not fully addressed in social due diligence processes:
Country context for human rights: HRDD considers the broader human rights landscape in the operating environment, including legal protections and systemic risks.
Business and human rights relationships: HRDD explicitly examines how a company’s activities and business relationships (e.g. supply chains, contractors) influence human rights outcomes.
Focus on vulnerable groups: There is a heightened emphasis on the rights of disadvantaged and marginalised groups.
Complicity in human rights violations: HRDD examines whether a company is directly or indirectly complicit in abuses.
Integration into corporate strategy: HRDD evaluates risks not only from an ethical perspective but also considers legal, financial and reputational implications for businesses.
The Risks of Fragmented Approaches
One challenge I’ve observed is that treating HRDD as a separate process form the environmental and social management systems and related due diligences can create inefficiencies and gaps. If human rights risks and impacts are not incorporated into broader impact assessments, mitigation measures and management plans may lack cohesion. This fragmentation increases the likelihood of overlooking critical issues or duplicating efforts, ultimately affecting the effectiveness of risk management.
Mainstreaming Human Rights Considerations
My approach has always been pragmatic: how can I turn social or human rights impacts into actionable items for my clients? A streamlined process that integrates HRDD into existing environmental and social impact assessments can reduce redundancies while ensuring comprehensive coverage of risks and impacts.
For example, considering human rights risks early in project development not only benefits affected communities but also strengthens business resilience. Companies that proactively address human rights concerns are less likely to face costly legal disputes or reputational damage. This is particularly true in light of emerging legislation, such as the CSDDD, which could impose legal obligations on companies to demonstrate robust HRDD processes.
Moving Forward: Bridging Gaps and Aligning Standards
As the regulatory landscape evolves, businesses will need to align their due diligence processes with both international human rights frameworks and sector-specific standards like the IFC’s PSs. We are moving towards action-oriented reporting, integrated management systems and the implementation of corporate commitments. Whether companies call it human rights or social impacts, integrating the principles of these approaches can provide a more well-rounded approach to managing risks. Ultimately, the goal of both human rights and social due diligence is to protect people and create a fairer, more equitable world.
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