Ramboll: The Cost of Inaction on Human Rights Due Diligence

Legal requirements and consumer ESG expectations mean companies are often declaring their commitment to respecting human rights. 

However, actioning these values can become difficult with huge supply chains and a declaration alone is not enough.

Ramboll has released a whitepaper, titled “Human rights due diligence inaction: The tangible business risk from doing nothing”, that explores how businesses can take responsibility for their supply chains. 

Patrick Moloney, Global Director and Lead for Sustainability Consulting and ESG at Ramboll, said on LinkedIn: “In today’s regulatory, social and investment landscape, neither moral intent nor technical execution alone is sufficient. 

“Companies are increasingly judged not just by what they say, but by how they operationalise their stated values particularly when navigating complexity, controversy or uncertainty.”

Why corporate responsibility matters

Embedding human rights due diligence in a robust way is an important part of resilient governance and can help to anticipate disruptions, maintain stakeholder confidence and protect brand value. 

“Most companies, at least on paper, agree,” Ramboll’s whitepaper says. 

“Yet, when it comes to putting these values into practice, particularly when it comes to human rights, many still treat it as optional.” 

Regulatory developments and increasing stakeholder expectations have made sure this no longer goes unnoticed. 

However, geopolitical and regulatory changes around the world – such as the EU Simplification Omnibus and DEI backlash in the US – have left compliance in a holding pattern. 

“In this vacuum, too many companies are mistaking uncertainty for a reason to delay,” the whitepaper reads. 

While most of the world’s most influential companies have adopted human rights policies, just 20% have begun to operationalise human rights due diligence according to the World Benchmarking Alliance’s 2024 Social Benchmark.

The impacts of not taking action

Ramboll’s whitepaper details a number of ways that inaction on human rights can impact business. 

With modern social media bringing wider access to information, reputational damage can spread fast and brand trust can be eroded quickly. 

Access to capital is the quieter side of this, with investors no longer treating human rights as a peripheral issue. 

ESG analysts, asset managers and pension funds scrutinise how companies address human rights and can view weak performance as a proxy for deeper management failings and future liabilities. 

Inaction can also bring risks for talent and culture – if employees see leadership sidelining human rights commitments, it can send a message that values are optional. 

Unsafe working conditions or environmental abuses throughout supply chains can have far reaching consequences too. 

Perhaps the most obvious regulatory focus is the EU CSDDD, but it is far from the only one. 

Tereza Kramlova, Senior Advisor at Ramboll, says: “Too many companies shy away from human rights due diligence because it might reveal risks they would rather not face. But that is precisely the point.

“Human rights due diligence is not about being perfect from the very beginning, it is about being accountable and adaptive. 

“It is a continuous cycle, not a one-off fix, and it must evolve alongside the operational realities it is meant to address.” 

What does strategic human rights due diligence look like?

Ramboll’s whitepaper says that the UNGPs and OECD Guidelines remain the backbone of good practice, but in reality the answer is not a one-size-fits-all checklist. 

It recommends five key steps to taking action:

• Know the risks and act on them 
• Ownership where it matter
• Engage the people affected
• Integrate across the business
• Respond, remediate and report.

“Doing it right does not mean perfection. It means being accountable, context-aware and willing to adapt,” the whitepaper reads.