Dr. Maximilian Schormair, an Assistant Professor in Business Ethics at Trinity Business School, delivered a compelling presentation asserting that multi-stakeholder governance is not merely an option but a necessity for enhancing due diligence on social issues within global supply chains. At the heart of this discussion is the ‘S’ in ESG—the social dimension, with human rights serving as its core component.
The landscape of corporate responsibility has shifted dramatically. While the Universal Declaration of Human Rights was initially conceived as a remit for nation-states, the exponential rise of globalisation has irrevocably entangled business activity with human rights. Supply chains now stretch across diverse regulatory environments, exposing companies to risks related to child labour, forced labour, discrimination, and unsafe working conditions. As Dr. Schormair highlighted, these are not just issues confined to emerging economies; they represent a global phenomenon where business operations can, and often do, adversely affect fundamental human rights.
This reality has driven a regulatory trajectory, particularly in the European Union, making human rights due diligence a future legal requirement. While regulatory timelines and scope may evolve, the core mandate for companies to conduct and report on due diligence remains firmly in place, underscoring its growing importance for the corporate world.
The Due Diligence Framework: From Voluntary Guidance to Hard Law
The concept of corporate human rights due diligence gained global prominence with the UN Guiding Principles on Business and Human Rights (UNGPs), adopted in 2011. The UNGPs established the three pillars of responsibility: the state’s duty to Protect, the business responsibility to Respect through due diligence, and the shared responsibility to provide Remedy. This framework has been hugely influential, shaping national legislation like the UK Modern Slavery Act and the subsequent legislative efforts across Europe, culminating in the current EU-wide due diligence law.
For businesses, the due diligence process is a structured, ongoing commitment, requiring a systematic approach to identifying, preventing, mitigating, and accounting for human rights impacts. The core steps, as codified in guidance from the OECD, include:
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Impact Assessment and Prioritisation: Identifying human rights impacts and prioritising action based on country context and the severity of the risk. Prioritisation criteria include the scale, scope, and remediability of the potential human rights violation.
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Action Plan and Tracking: Developing specific measures, collaborating with suppliers, setting clear targets, and tracking progress.
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Reporting: Communicating findings and outcomes regularly, often through dedicated human rights or ESG reports.
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Stakeholder Engagement: This is a vital and often continuous step, ensuring the perspective and needs of the affected stakeholders inform the entire process.
Despite the established framework, independent benchmarking studies, such as the Corporate Human Rights Benchmark, consistently show that corporate compliance and reporting on due diligence remain worryingly low. Even leading companies often score below 50% on reporting metrics. This lack of traction over the past decade confirms Dr. Schormair’s central thesis: individual corporate efforts, even when guided by voluntary frameworks, are often insufficient to drive fundamental change in complex, multi-tiered supply chains. The process is too "intensive" and "complicated" for companies to effectively "carry out alone."
Multi-Stakeholder Governance: The Power of Collective Action
To overcome the inherent limitations of individual corporate due diligence, Dr. Schormair champions Multi-Stakeholder Initiatives (MSIs). These are private governance mechanisms that strategically combine the expertise and leverage of different actors—industry, civil society organisations (CSOs), and trade unions—to address a common social or environmental challenge collectively.
MSIs have emerged as a prominent feature of global governance, particularly in high-risk sectors like agriculture, consumer goods, and textiles. By pooling resources and applying collective pressure, they can achieve a level of influence and impact that is simply unattainable for a single company, even a powerful multinational.
The Bangladesh Accord: A Best Practice Case Study
The most compelling illustration of this principle is the International Accord for Fire and Building Safety, initially established as the Bangladesh Accord in 2013.
The Accord was a direct, emergency response to the catastrophic Rana Plaza factory collapse, a tragedy that served as a profound crisis moment for the fashion industry. Facing intense public and civil society scrutiny, major global fashion brands and global trade unions collaborated to create a collective, legally binding governance model.
The Accord’s success lay in its operational structure:
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Joint, Independent Oversight: Signatory companies committed their suppliers to a joint programme. This involved hiring independent safety experts to conduct thorough audits of fire, electrical, and building safety across thousands of factories.
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Centralised Data and Action: A joint database was created, and companies worked together to ensure suppliers implemented the necessary Corrective Action Plans.
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Worker Empowerment: Crucially, the initiative extended beyond audits to include on-the-ground worker empowerment. This involved safety training and the establishment of safety committees at the factory level, giving workers a legitimate voice in the safety process. A confidential complaints mechanism was also implemented, enabling workers to anonymously report issues.
The results of this collective approach were profound: the Accord achieved substantial improvements in worker safety, with almost all factories completing necessary renovations, and no similar catastrophe has occurred in Bangladesh since. The model was so effective that its core function was eventually taken over by a government agency, and the initiative itself was successfully extended to other production hubs under the "International Accord" label, such as Pakistan.
The Key to Genuine Collaboration
A natural tension exists between the profit-driven interests of corporations and the rights-based mandates of CSOs and trade unions. Dr. Schormair addressed this head-on, outlining the crucial mechanisms necessary to foster genuine commitment rather than mere "symbolic compliance":
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Crisis and Public Pressure: While a bitter reality, crises like Rana Plaza are often the necessary catalyst, forcing companies to recognise the profound risks of inaction and the need for collective security.
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Legal Frameworks: Emerging hard regulation drives companies to seek out pre-existing, effective MSIs as a ready-made, collective solution for meeting their new due diligence obligations.
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Transparency: The Accord maintained a high degree of transparency, with audit reports and progress updates being publicly available. This continuous external visibility provided accountability and trust.
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Legally Binding Commitment: Perhaps the most critical feature, the Accord made non-compliance subject to a legally binding arbitration mechanism. This commitment elevated the MSI from a voluntary code to a high-stakes, enforceable agreement, ensuring signatories followed through on their commitments.
In conclusion, Dr. Schormair’s presentation provides a clear and authoritative pathway forward. Human rights due diligence is now a fundamental business requirement, but the scale and complexity of global supply chains overwhelm individual corporate capacity. Multi-stakeholder governance models, when properly designed with high transparency and legally binding accountability, are the most effective vehicle for translating good intentions and legal requirements into measurable, life-saving social impact on the ground. By uniting the resources of business with the rights expertise of civil society, companies can move from simply managing risk to actively safeguarding human rights.
The presentation offers a strong call to action, suggesting that to meaningfully address complex social challenges like human rights abuses in global supply chains, businesses must embrace collective, multi-stakeholder approaches that move beyond the limitations of individual corporate audits and voluntary codes.