The OECD Guidelines for Multinational Enterprises are a set of principles and standards that aim to promote responsible business conduct in a global context.. Since its creation in 1976, the Guidelines have undergone several updates to suit the changing business landscape and emerging challenges. the latest version, adopted by the OECD Council of Ministers in 8 June 2023, reflects contemporary concerns, addressing issues such as climate change, biodiversity, technology, business integrity and supply chain due diligence. Compared to its previous version, the edition of 2023 of the guidelines provides a more complete and comprehensive approach to responsible business conduct. It not only extends the scope of the guidelines to new sectors, like the technology, but also highlights the importance of due diligence, especially within supply chains.
For example, in the guidelines of 2011, suggested that companies should “respect the rights of workers employed by the Multinational Company to establish or join trade unions (…).” Nonetheless, the scope of this recommendation has been expanded to cover all workers in different business relationships. Updated guidelines emphasize the importance of companies providing training opportunities, skill enhancement and retraining for your workers, anticipating future operational changes and evolving employer requirements. This includes preparing them for technological advances., automation, digitization and the overall transition towards a more sustainable and just future.
Updated Guidelines details
the edition of 2023 of the OECD Guidelines for Multinational Enterprises brings significant revisions that reflect the current business and social contexts. These updates cover several important areas:
a) Climate Change and Biodiversity: In response to the urgency of environmental issues, the guidelines of 2023 highlight climate change and biodiversity as central themes. Businesses are incentivized to promote economic progress, environmental and social, while mitigating the negative impacts related to their operations, products and services. This includes reducing greenhouse gas emissions., the adoption of sustainable natural resource management practices and support for biodiversity conservation.
b) Technology: Recognizing the growing influence of technology on business and society, the guidelines of 2023 expand their scope to include the technology sector. Companies are guided to respect human rights, protect users' privacy and personal data, promote cybersecurity and prevent the misuse of technology for harmful purposes.
c) Business Integrity: the edition of 2023 further strengthens stance on corporate integrity. The Guidelines encourage companies to adopt anti-corruption practices, to promote transparency in their operations, adhere to high ethical standards and compete fairly in the marketplace.
d) Supply chain due diligence: Recognizing the importance of responsible supply chain management, the guidelines of 2023 emphasize the need for companies to perform comprehensive, risk-based due diligence on their supply chains. This involves identifying, prevention and mitigation of actual and potential adverse impacts related to human rights, work, environment and anti-corruption.
It is worth mentioning the approach of Sustainable Consumption and Production, in which companies are encouraged to promote them by developing products or services with minimal environmental impacts. Specifically, these products or services must be safe, healthy, efficient in the use of natural resources and with low carbon emissions, in addition to being designed to be easily reusable, recyclable or biodegradable.
EU Corporate Sustainability Directive
An interesting coincidence is that the revision of the OECD Guidelines came at a time when the European Union is developing its Corporate Sustainability Directive. These initiatives share similar goals, highlighting the importance of corporate responsibility and sustainability. The synchrony between the OECD Guidelines and the EU Corporate Sustainability Directive can further drive discussions on responsible business conduct and provide a solid foundation for future policies and regulations in this area..
Impacts
Revised OECD Guidelines have the potential to catalyze future policy developments, mostly in Europe. The influence of these guidelines can be seen in the ongoing negotiations for the United Nations Binding Treaty on Business and Human Rights. Furthermore, certain additions, such as those related to just transition and worker empowerment, may have implications for future negotiations at the International Labor Organization (ILO). In general, these guidelines have the potential to shape regional and international policy discussions on responsible business conduct, including ongoing developments in the EU Corporate Sustainability Directive.
The guidelines have evolved over time to address emerging challenges and reflect changes in the global business landscape.. the edition of 2023 highlights crucial issues, like climate change, biodiversity, technology, business integrity and supply chain due diligence. While these guidelines are voluntary and non-binding, they complement and reinforce existing domestic and international laws and regulations governing the conduct of multinational corporations. Its synchrony with the EU Corporate Sustainability Directive highlights the growing importance of corporate responsibility and sustainability in today's business environment.. The OECD Guidelines have the potential to influence policy and shape international discussions on responsible business conduct, contributing to a more sustainable and ethical future.
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