Research project, including the preparation of a study on audits and certification in the context of human rights and environmental due diligence obligations of corporations

Research Topic & Roadmap

The research project will produce an independent study on the environmental and human rights aspects of audit and certification systems in the context of corporate due diligence. This concept of due diligence is based on the EU Corporate Sustainability Due Diligence Directive (CSDDD) – in public reporting misleadingly referred to as the “Supply Chain Act”.

In general terms, audits are test reports that result from a systematic, independent and documented examination of products, services or processes. Certifications are evidence of the conformity of a test object with pre-defined criteria. The aim of the study is to analyse how audits and certifications can help companies covered by the directive to identify, prevent or remedy negative environmental and/or human rights impacts of their activities – and those of their subsidiaries and other parties involved in their so-called “value chains”.

However, it is still unclear whether existing audit and certification systems are capable of supporting corporations in their due diligence process, or whether they would need to be redesigned for such a task. To answer this question, we will first analyse the requirements placed on companies. What does it mean to say that companies have a (risk-based) “duty of care” with regard to human rights and the environment? How far does their responsibility extend? Can the companies covered by the proposed EU-directive be held legally accountable if environmental damage and/or negative impacts on human rights occur in their value chain? What is a “value chain”? How is it structured?

Having addressed these and other relevant (preliminary) questions, the aim is to clarify what role audits and certifications can play in the context of corporate due diligence and whether they can be used to support it.

Reseach Focus

The study will, among other things, look at the following topics:

• Current and foreseeable future risks for human rights and the environment caused by business enterprises, especially in high-risk sectors, taking into account the specific needs of small and medium enterprises (SMEs);
• Key corporate due diligence obligations under the proposed EU Corporate Sustainability Due Diligence Directive;
• Opportunities and risks of using audits and certifications to verify compliance with due diligence obligations;
• Good practice examples;
• Risks of missing/inadequate audits and certifications.

Research Method

The research will include a literature review as well as an analysis of legal texts and relevant studies. This will be used to establish criteria for designing efficient and effective audit and certification systems in order to verify compliance with human rights and environmental due diligence obligations along supply and value chains.