EU: Downstream due diligence must be part of CSDDD for it to be effective & in line with international standards, says policy brief
"Downstream due diligence: A must-have for the EU’s Corporate Sustainability Due Diligence Directive", 13 March 2023
To be in line with the risk-based approach codified in the United Nations Guiding Principles (UNGP) and the OECD Guidelines for Multinational Enterprises, it is essential for businesses to conduct downstream due diligence.
For some sectors, the most severe risks are in the downstream rather than the upstream value chain. A risk-based approach would prioritise these risks. For a level-playing field between all sectors, companies need to consider the upstream and downstream value chain equally in their risk-based approach.
Examples of business relations with severe adverse impacts in the downstream value chain:
- surveillance technology supplied for state surveillance that violates human rights
- mining machinery delivered for mines that cause severe environmental devastation
- supply of pesticides that endanger the health of the population in the areas where they are used
- financing of a plantation for which people were forcibly evicted without adequate compensation
Downstream due diligence is effective in addressing risks of human rights violations and environmental damage. Downstream due diligence is particularly important in situations where upstream due diligence fails to prevent or mitigate a severe risk of harm...