Skip to content
While some may view the rise in human rights–centered regulation as a box-ticking exercise and an added burden on compliance teams, forward-thinking leaders see it differently—as a strategic opportunity to build supply chain resilience, attract capital, and earn stakeholder trust.
As pressure mounts from regulators, investors, and consumers, leading organisations recognise that proactive, risk-based management of human rights issues—particularly around modern slavery—has become essential for success. Companies that embed human rights considerations into their operations today are better positioned to become tomorrow’s market leaders.
For compliance managers, legal teams, and C-suite executives, this is a golden opportunity to transform a perceived burden into strategic value.
Rising regulatory pressure
The issue of human rights in the supply chain has been in the public eye since the 1990s. For years a growing reputational risk as global non-government actors put their weight behind the cause, the issue is now being heightened and redefined by global regulation.
Laws such as the EU Corporate Sustainability Due Diligence Directive (EU CSDDD), the UK Modern Slavery Act, the Australian Modern Slavery Act, and similar initiatives in Canada, the U.S., and Asia are raising public and regulatory expectations. It is no longer enough to admit to oversight failures in the supply chain—organisations are now expected to act and be accountable. Enforcement bodies and investors want to see evidence of action and measurable outcomes.
Businesses that anticipate regulatory direction and embed human rights into their core strategy will be better positioned to succeed in an era of heightened ethical scrutiny, increased competition, and geopolitical uncertainty.
Human rights-centred due diligence creates competitive advantage
There are several ways an organisation benefits from human rights regulatory compliance:
Strengthens supplier resilience
Modern slavery scandals can erupt quickly, disrupt supply chains overnight, and leave long-lasting reputational damage. Proactive due diligence reduces the risk of crises, contract terminations, and supplier shutdowns—promoting trust and resilience across supplier networks.
Reduces legal and regulatory risk
Systematic due diligence helps detect labour abuses or sourcing issues early, giving companies time to mitigate, correct, and demonstrate accountability before regulators intervene.
With penalties, investigations, and reputational damage at stake, prevention through due diligence is the smarter, lower-cost option.
Enhances brand trust and reputation
Ethical business practices are no longer niche, they are mainstream.
Brands that commit publicly to fair treatment and can back it with action are frequently rewarded with deeper customer loyalty and stakeholder trust. Prevention can be much cheaper than crisis control in an interconnected world where news is often instant.
Secures access to capital and investment
Investors increasingly screen for ESG risks, including human rights exposure. Companies with strong governance and transparent due diligence are more likely to attract capital—and at better terms.
Promotes government and corporate relationships
Human rights clauses are increasingly embedded into contracts with third parties, particularly in the context of government tenders and corporate procurement processes.
Robust due diligence systems are not just a compliance tool; they’re a qualification to compete for high-value contracts and strategic partnerships.
From cost centre to value driver: practical steps for executives
Most organisations already have some form of due diligence policies in place. In many cases, it’s a matter of refining or recalibrating rather than overhauling compliance.
Compliance managers can strengthen human rights due diligence through the following:
Risk-based mapping
Prioritise suppliers and geographies with the highest risk exposure. Use third-party risk tools or NGO data to identify hotspots.
Integrating into core processes
Embed checks into procurement, onboarding, and audits. Align with enterprise risk and ESG governance frameworks.
Engaging suppliers
Move beyond audits. Get to know third-parties using tailored questionnaires, offer training, joint action plans, and shared incentives to improve labour practices.
Documenting and disclosing
Shift from policy statements to transparency. Include human rights metrics in ESG reports, aligned with frameworks like the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and the EUs Corporate Sustainability Reporting Directive (CSRD)
Assigning board-level ownership
Assigning accountability at the top of the company hierarchy is essential because employees tend to follow the lead of the top layer of executives. Human rights risk should carry the same weight as climate, cyber, and financial risk in board discussions.
Compliance is the starting line, not the finish line
Human rights due diligence is not just a legal requirement—it’s a business imperative and a foundation for resilience, trust, and long-term relevance.
By approaching due diligence as a strategic investment, companies can unlock competitive advantage, show leadership in times of uncertainty, and future-proof their operations.
It’s time to shift the mindset—from cost to value, and from risk to opportunity.
