As companies expand across borders, respect for human rights in supply chains is no longer just a matter of corporate social responsibility. It has become a key management issue. International standards such as the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (OECD Guidelines) serve as widely accepted reference points in corporate practice. In recent years, particularly in Europe, these expectations have been increasingly reflected in binding legal frameworks, including through due diligence requirements.
At the same time, regulatory and policy developments have not followed a single, linear path. While the European Union adopted the Corporate Sustainability Due Diligence Directive (CSDDD) in 2024, the approval of the “Omnibus I” simplification package in February 2026, which raised applicability thresholds and simplified requirements, suggests a policy shift towards reducing regulatory burdens and enhancing corporate competitiveness. This highlights how dynamic and complex the business environment has become.
Despite such shifts in regulatory and policy frameworks, expectations for corporate respect for human rights do not appear to have diminished. The UNGPs and the OECD Guidelines are embedded in a wide range of national policies and business practices, and human rights considerations are more frequently factored into decisions such as business partner selection and supplier evaluation (Note 1). The key question is not compliance itself, but whether such efforts translate into tangible improvements in practice, thereby enhancing value for companies and the supply chain.
Challenges of Formalistic Responses
As human rights due diligence becomes more widespread, attention is now shifting towards how it is implemented in practice. Critics suggest that the mere development of internal policies or compliance frameworks does not automatically translate into better working conditions or effective remedies for affected individuals (Note 2).
The challenges are not confined to internal corporate governance but are also evident in supplier relationships. When compliance efforts focus primarily on documentation and demands for corrective action, rather than addressing underlying risks, such approaches may place disproportionate burdens on suppliers. This can encourage superficial compliance or even the concealment of problems, thereby making it more difficult to identify and address human rights risks at an early stage. In such cases, especially where suppliers have limited awareness of the importance of respecting human rights, meeting requirements may become its own goal, resulting in paperwork-driven responses with little real-world impact.
Moreover, where a company’s own purchasing practices might contribute to human rights risks, simply requiring corrective action from suppliers is unlikely to lead to lasting solutions. Research conducted by the International Labour Organization (ILO) and the Ethical Trading Initiative (ETI) between 2016 and 2017 highlights the effect of business practices such as short lead times and price pressure on working conditions in supply chains (Note 3). Additional reports indicating that suppliers are asked to absorb unexpected costs arising from geopolitical developments (Note 4) suggest the limitations of compliance-driven approaches to address broader market dynamics.
Why Collaboration Matters
These practical challenges are also becoming more apparent in regulatory and policy developments. Germany’s Supply Chain Due Diligence Act, for example, cautions against contractual practices that shift excessive due diligence responsibilities to suppliers (Note 5 and Note 6). It makes clear that companies cannot replace their own risk analysis and due diligence obligations simply by relying on contractual assurances from suppliers. Instead, they are expected to identify risks and, based on that assessment, implement appropriate preventive measures in cooperation with their suppliers.
A similar emphasis is observed in the EU’s CSDDD, which highlights the importance of engagement and cooperation with business partners in conducting due diligence. While contractual assurances may help clarify the allocation of responsibilities, under the CSDDD, they should be designed in a way that does not allow companies to unilaterally offload statutory obligations (Note 7). Critics note that such assurances may reduce risks for buyer companies to some extent, but do little to address the managerial constraints faced by small-scale suppliers and therefore fall short of delivering sustainable solutions (Note 8). This underscores the limitations of regulatory approaches.
Taken together, these developments suggest that human rights due diligence should not be understood as a checklist exercise, but rather as an ongoing and iterative process of reviewing corporate activities and decision-making. From this perspective, the key lies in sharing challenges across the supply chain and working together towards improvement, while building the trust that underpins these efforts.
Collaborative Approaches: Initiatives in Japanese Industry
As supply chain risks grow more complex, Japanese industries have increasingly adopted collaborative approaches that focus on operational realities and problem-solving. In the apparel sector, the Japan Apparel-Fashion Industry Council (JAFIC) has developed common “Requirements for CSR Audits of Factories” for member companies to improve visibility at the factory level and assess respect for human rights. Importantly, JAFIC emphasizes continued engagement with business partners, rather than the immediate termination of business relationships when issues arise, and works jointly on corrective actions to deliver concrete improvements (Note 9).
In the electronics industry, the Japan Electronics and Information Technology Industries Association (JEITA) has launched the Sustainable Procurement Partnership (SPP), an industry-wide initiative aimed at building a common foundation for sustainable procurement practices across the sector (Note 10). Under this initiative, tailored support is provided to small and medium-sized enterprises (SMEs), including assistance in developing human rights policies and guidance on the initial steps for conducting risk assessments. This support takes an accompaniment-style approach, working closely with SMEs to help them overcome early-stage entry barriers. The SPP also encourages partnerships where large enterprises and SMEs collaborate to tackle shared challenges.
Both JAFIC’s and JEITA’s approaches emphasize collaboration between buyers and suppliers over an exclusive focus on audits or corrective demands, and aims to drive progress across the entire supply chain. By building trust through cooperation, which in turn facilitates information sharing and practical action, these initiatives may be viewed as practical examples of how challenges in the implementation of human rights due diligence can be addressed.
Human Rights Due Diligence: A Process of Behavioral Change
Human rights due diligence goes beyond mere responses to institutional frameworks. It requires companies to reflect on, and, where necessary, change their behavior. In increasingly complex global supply chains, strengthening regulatory compliance alone may not be sufficient to address human rights challenges. What is needed is for companies to reassess their actions and purchasing practices, learn across supply chains, and pursue continuous progress over time.
Collaborative approaches play an important role in this process. By fostering trust among supply chain actors, they help make due diligence as a practical framework for driving behavioral changes within companies. Sharing Japan’s experiences internationally may therefore provide potentially useful practice-oriented insights for making global supply chains more sustainable, including across Asia.
March 5, 2026
>> Original text in Japanese
