From Human Rights and Environmental Due Diligence to Effective Engagement and Remedy Mechanisms—A New Phase in Sustainability Management

Corporate sustainability management are moving beyond the “form” of adopting policies and disclosing information to a stage where their “substance” is being tested—whether companies are actually preventing and mitigating adverse human rights and environmental impacts, engaging in dialogue, providing remediation and access to remedy, and ultimately contributing to the preservation and enhancement of corporate value. Against the backdrop of the revisions to the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and Japan’s National Action Plan on Business and Human Rights, this article considers practical approaches to making human rights and environmental due diligence an ongoing management process that goes beyond risk mitigation to contribute both to corporate value and to positive impacts on society.

An Era in Which the Substance of Sustainability Management Is Being Tested

Corporate sustainability efforts have entered a new phase. It remains important to adopt human rights and environmental policies, conduct supply-chain assessments, and disclose the status of initiatives. Yet these steps alone do not necessarily prevent or mitigate adverse human rights and environmental impacts, nor do they ensure corrective action and remedy when harm occurs. Companies are increasingly expected to make human rights and environmental due diligence (HREDD) more than a formal compliance exercise and to operate it as an ongoing management process that addresses potential and actual impacts while contributing to the preservation and enhancement of corporate value.

The HREDD contemplated by the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (OECD Guidelines) does not end with identifying and assessing risks. It also encompasses ceasing, preventing and mitigating adverse impacts, tracking effectiveness, communicating, taking corrective action, and providing remedy. Meaningful engagement with affected rights-holders, local communities, workers, business partners and others underpins the entire process.

In Europe and the United States, moves to simplify sustainability regulation and anti-ESG and anti-DEI trends are also evident. At the same time, pressure on companies to address human rights and environmental issues continues to grow through product-specific due diligence rules, import restrictions on goods made with forced labour, public procurement, financing and investment and disclosure rules, requirements from business partners, and complaints or litigation brought by NGOs. Precisely because uncertainty is high, companies need substantive approaches that are less vulnerable to shifts in regulatory frameworks or terminology and that can both address adverse impacts and enhance corporate value.

Advancing HREDD under the Revised OECD Guidelines

The 2023 revision of the OECD Guidelines clarified environmental management as environmental due diligence extending beyond site-level environmental management to the life cycle of products and services and the entire value chain, thereby expanding the scope of due diligence from human rights to environmental and other areas.

The environmental issues covered are broad, including climate change, biodiversity loss, ecosystem degradation, deforestation, air, water and soil pollution, and improper waste management. On climate change, the revised OECD Guidelines refer to science-based targets and transition plans, consideration of Scope 1 and 2 emissions and, to the extent possible, Scope 3 emissions, and prioritizing emissions reductions over offsets. Because adverse environmental impacts are closely connected with human rights relating to health, safety, livelihoods, land tenure and other interests, and because the transition to decarbonization itself may adversely affect workers and local communities, social impacts also need to be assessed in pursuing a “just transition.”

The OECD Guidelines are not legally binding, but they are increasingly referenced or incorporated into EU sustainability-related regulations, disclosure and ESG finance and investment standards, government policies, and public procurement. Alleged non-observance of the OECD Guidelines may also be raised with National Contact Points (NCPs), creating opportunities for dialogue and problem-solving between enterprises and stakeholders.

In my article “Revision of OECD Guidelines for Multinational Enterprises Calls for Enhanced Environmental Management,” published in Environmental Management, Vol. 59, I explain the key points of the OECD revision, drawing on my experience conducting case-study research on HREDD as a Consultant to the OECD Centre for Responsible Business Conduct and serving as a member of the Working Group on Handbook for Promotion of Environmental Due Diligence at Japan’s Ministry of the Environment. I also propose ways in which Japanese companies can build on existing CSR procurement practices and environmental management systems (EMS) and develop them into HREDD. Rather than discarding existing mechanisms and rebuilding from scratch, I emphasize closing gaps by extending attention across the value chain, engaging stakeholders, prioritizing based on risk, and connecting due diligence to corrective action and remedy.

Advancing Business and Human Rights Practices Following the Revision of Japan’s National Action Plan to Implement the UNGPs

Following the 2023 revision of the OECD Guidelines, which further articulated international standards for responsible business conduct, efforts in Japan to embed HREDD in business practice advanced through Japanese government guidelines, sustainable procurement for Expo 2025 Osaka, Kansai, Japan, and other initiatives. Against these domestic and international developments, Japan’s National Action Plan (NAP) on Business and Human Rights was revised by the Government of Japan in December 2025 and has been implemented from fiscal year 2026.

The revised Japanese NAP sets out eight priority areas, including human rights due diligence, access to remedy, public procurement, protection of rights-holders who are particularly vulnerable to adverse impacts, AI and technology in relation to human rights, and the environment and human rights. It is also significant in reconnecting measures that had been pursued separately by individual Japanese ministries and agencies through a cross-government Business and Human Rights perspective.

The practical implication for companies is not simply that the list of due diligence topics is expanding. Companies need to integrate a human rights perspective into existing legal and risk-management processes, including environmental management, economic security and AI risk management, and establish cross-functional governance.

Of particular importance is the effectiveness of grievance mechanisms. The revised Japanese NAP expects companies either to establish their own mechanisms or to participate in mechanisms operated by industry associations and other organizations, and to improve the effectiveness of engagement and remedy. Beyond simply providing consultation or reporting channels, companies need an integrated design covering a speak-up culture, protection against retaliation, appropriate investigation and dialogue, corrective action, and prevention of recurrence.

In my article “Revision of Japan’s National Action Plan on Business and Human Rights and Practical Responses for Companies,” published in Kinyu Homu Jijo (Financial Law Journal), No. 2282, I examine the background and significance of the revision, key points and remaining challenges, and practical responses for companies, drawing on my experience participating as a working-group member in the formulation, implementation and revision of Japan’s NAP and advising companies and financial institutions in practice.

From HREDD to Engagement and Remedy—Three Shifts Companies Should Make

1  From Audits and Monitoring to Stakeholder Engagement:  Unilateral audits and monitoring may not fully capture the issues faced by people who find it difficult to speak up or impacts on diverse natural and local environments. Even where direct dialogue with rights-holders is difficult, companies should also engage trusted representatives or intermediary organizations, such as trade unions, local communities, human rights and environmental NGOs, and experts, and reflect information from the ground in risk assessments and response measures.

2  From Siloed Human Rights and Environmental Approaches to Integrated Impact Assessment:  Environmental issues such as climate change, biodiversity loss and pollution are closely linked to the human rights of Indigenous Peoples and local communities. Conversely, businesses intended to address social challenges, including decarbonization and digitalization, can themselves create new human rights and environmental risks. While differences in responsible functions and assessment methodologies may remain, key decisions should consider the interaction between human rights and environmental impacts.

3  From Grievance Handling as an Ex Post Response to a Foundation for Learning and Improvement:  Grievance mechanisms are not merely systems for responding to disputes after problems arise. By aggregating and analyzing concerns received and feeding the insights back into risk assessments, policies, procurement standards, contracts, training, audits and board oversight, they can serve as an early-warning and learning foundation that improves due diligence process. Ensuring access to remedy can also help restore trust between companies and stakeholders and prevent more serious crises in the future.

Activities Related to Business and Human Rights and the Environment

For more than ten years, I have treated Business and Human Rights and the Environment as a central professional focus, moving between international and Japanese rulemaking, corporate practice, and the practice of engagement and remedy, while supporting and promoting more effective sustainability practices by companies and financial institutions.

Business and Human Rights and the Environmental issues also represent one of the areas where the three fields I focus on —Global Compliance / Sustainability / Technology—closely intersect.

Going forward, through the evolution from human rights and environmental due diligence toward stronger engagement and remedy, I hope to continue contributing to efforts that strengthen the resilience and integrity of companies, organizations and individuals.

• As a member of the Working Group and Roundtable on Japan’s National Action Plan (NAP) on Business and Human Rights established by the Government of Japan, participated in the formulation, implementation and revision of the NAP 

• As a consultant to the OECD Centre for Responsible Business Conduct, conducted case-study research on HREDD by Japanese companies. Also served as a member of the Working Group on Handbook for Promotion of Environmental Due Diligence, Ministry of the Environment, Government of Japan.

• As Alternate Legal Expert to the UN Intergovernmental Working Group on Transnational Corporations and Other Business Enterprises with Respect to Human Rights (OEIGWG), provides legal support for negotiations on an international legally binding instrument on business and human rights.

• Involved in developing sustainable sourcing codes and grievance and remedy mechanisms for the Tokyo 2020 Olympic and Paralympic Games and Expo 2025 Osaka, Kansai, Japan.

• As Representative Director of the Japan Center for Engagement and Remedy (JaCER), established and operates an engagement and remedy platform that supports corporate grievance mechanisms.

• Through the CSR and Internal Control Project Team of the Japan Federation of Bar Associations (JFBA), the Business Human Rights Committee of the International Bar Association (IBA), and other forums, researches and develops proposals on the roles and challenges of lawyers in Business and Human Rights and the Environment.

• Has served as an outside director or other external advisors of companies and financial institutions, and as a member of sustainability committees and sustainability advisory boards.

Related Publications

• “Human Rights Due Diligence in Practice” (Kinzai Institute for Financial Affairs, 2023; co-author)

• “SDGs / ESG Business and Legal Strategy” (Shojihomu, 2022)

• “Environmental Due Diligence: Based on Regulatory Trends on Responsible Business Conduct and Supply Chain Due Diligence,” Environmental Management, May 2020 issue

• “Introducing and Implementing Sustainability Contract Clauses,” Japan Business Law Review, May 2023 issue

• “How Corporate Respect for Human Rights Ripples Through the Supply Chain: Its Significance and the Obstacles to Be Overcome,” Legal Seminar, No. 846 (2025)

• “Japan’s National Action Plan (NAP) on Business and Human Rights—Significance of the Revision and Future Challenges,” IDE-JETRO Policy Brief No. 262 (2026)