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ESG Insights: October 2023 edition
OECD Guidelines for Multinational Enterprises on Responsible Business Conduct Updated
The Organisation for Economic Co-operation and Development (OECD) has updated its Guidelines for Multinational Enterprises on Responsible Business Conduct.
Originally introduced in 1976, the guidelines are a set of recommendations for multinational enterprises to enhance the business contribution to sustainable development. They seek to address adverse impacts on people, the planet, and society that are associated with business activities.
Last reviewed in 2011, these guidelines have been updated to ensure they remain fit for purpose. Key updates in this latest edition include:
OECD Guidelines for Multinational Enterprises on Responsible Business Conduct Updated
The Organisation for Economic Co-operation and Development (OECD) has updated its Guidelines for Multinational Enterprises on Responsible Business Conduct.
Originally introduced in 1976, the guidelines are a set of recommendations for multinational enterprises to enhance the business contribution to sustainable development. They seek to address adverse impacts on people, the planet, and society that are associated with business activities.
Last reviewed in 2011, these guidelines have been updated to ensure they remain fit for purpose. Key updates in this latest edition include:
- Recommendations for enterprises to align with internationally agreed goals on climate change and biodiversity
- Addition of due diligence expectations on the development, financing, sale, licensing, trade and use of technology, including gathering and using data
- Recommendations for enterprises on conducting due diligence on impacts and business relationships related to use of their products and services
- Increased protection for at-risk persons and groups, including those who raise concerns regarding the conduct of businesses
- Updated recommendations on disclosure of responsible business conduct information
- Expanded due diligence recommendations to all forms of corruption
- Recommendations for enterprises to ensure lobbying activities are consistent with the Guidelines
- Strengthened procedures to ensure the visibility, effectiveness and functional equivalence of National Contact Points for Responsible Business Conduct.
Compliance with these guidelines is voluntary, however they are aligned with other International standards and references to these guidelines can be found in legislation across the globe, including:
They have also criticised that this latest version didn’t improve on the implementation of the guidelines through the National Contact Point mechanisms. These mechanisms are seen as ‘largely toothless’ but are critical to effective implementation.
This information is correct at time of publication on 9th October 2023.
- EU Sustainable Finance Disclosure Regulation – which requires disclosures that show how investments align with the OECD guidelines
- EU Corporate Sustainability Reporting Directive – ‘Materiality assessments’ under this Directive are informed by the due diligence process defined in the OECD guidelines
- EU Taxonomy Regulation – ‘Minimum safeguards’ are based on procedures aligned within the OECD guidelines.
They have also criticised that this latest version didn’t improve on the implementation of the guidelines through the National Contact Point mechanisms. These mechanisms are seen as ‘largely toothless’ but are critical to effective implementation.
This information is correct at time of publication on 9th October 2023.
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According to a 2022 KPMG report, 69% of business leaders reported an increase from their stakeholders, including investors and customers, in ESG reporting transparency — and that pressure is only increasing.
Our brand-new ESG Insights is a monthly newsletter that will cut through the noise and tell you what you need to know about this ever-present topic. This newsletter will:
✓ Simplify legislation updates
✓ Bust some of the myths
✓ Let you know what has (or hasn't!) changed in the last month
✓ Keep you up to date with a complex topic
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