KEY TAKEAWAYS

• The EU Commission’s proposal for a Directive on Corporate Sustainability Due Diligence (the Directive) goes beyond existing regulations related to responsible corporate behaviour.
• Human rights, labor rights and environmental due diligence in global value chains has never been more important than today.
• Investors and companies should prepare now for increasing regulatory requirements and public scrutiny.
• The industries identified by ISS ESG Norm-Based Research (NBR) to be most involved in human rights, labor rights, and environmental controversies in global value chains are Textiles & Apparel, Retail, Food Products, Automobile, and Electronic Devices & Appliances.
• ISS ESG Corporate Rating data demonstrates that the majority of companies in high-risk industries have not yet implemented sufficient due diligence to mitigate social and environmental risks and impacts along their value chains.