OECD Alignment Assessments of Industry and Multi-Stakeholder Programmes – OECD

Why align with international standards developed by the OECD?

Due diligence is increasingly on the policy agenda. All international instruments on responsible business conduct – including the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, and the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy – recommend due diligence as the framework for companies to address adverse impacts in their operations and supply chains.

The growing number of regulatory as well as voluntary due diligence initiatives across sectors and geographies underscores the need for convergence or mutual recognition around expectations of practitioners. Regulatory frameworks with aligned and complementary expectations for practitioners, alignment assessments that allow for mutual recognition of approaches, and clear metrics for effectiveness can contribute to legal certainty, lower compliance and monitoring costs, and a level playing field for responsible business conduct.

The role of multi-stakeholder and industry initiatives

Industry programmes and multi-stakeholder initiatives can play an important role in helping companies carry out due diligence for responsible global value chains. The landscape of such initiatives across sectors is both vast and diverse in terms of their composition, focus and core activities.

DIVERSE LANDSCAPE OF INITIATIVES

Companies use industry or multi-stakeholder initiatives to:

• pool knowledge about supply chains including risks germane to the sector
• increase leverage across the supply chain or in specific geographies
• scale effective measures (including for example training)
• share costs and savings as a benefit to sector collaboration which can be particularly useful for small and medium-sized enterprises

Multi-stakeholder and industry initiatives can be important multipliers for due diligence as they play a role in evaluating and benchmarking the due diligence actions of companies. Governments also often rely on certification initiatives within the context of public procurement, government-backed certification, disclosure or due diligence legislation, market access or free trade agreements.

While such initiatives can be a multiplier for high quality due diligence and more broadly due diligence uptake, they can also contribute to the outsourcing of company responsibility and “tick-the-box” approaches when they are not aligned with international standards. A lack of harmonisation across initiatives has resulted in multiple and at times conflicting requirements on companies. Supporting the alignment of such initiatives with OECD due diligence guidance, therefore, would strengthen the role of such initiatives as multipliers for due diligence and in turn improve the effectiveness, and impact of company due diligence efforts. This will create a positive feedback loop to enhance the credibility and trust placed in initiatives, foster a better understanding of how companies and governments can use initiatives, and enable mutual recognition between initiatives where appropriate.