Understanding the UK's Proposed Human Rights and Environmental Due Diligence Bill

The United Kingdom is at risk of becoming a dumping ground for products made with forced labour if it does not keep pace with increasing regulation being implemented globally.  With the introduction of the Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill, the UK is one step closer to aligning with the international shift towards mandatory human rights and environmental due diligence. The proposed legislation would place a legal duty on organisations to identify, prevent, mitigate and address human rights and environmental harms across their own operations, subsidiaries and value chains. It would also introduce a new enforcement regime, civil liability for failures to comply, and criminal offences in certain circumstances.

Although the UK has explored similar legislation before, this latest bill represents the most recent attempt to move beyond transparency requirements towards a system that expects organisations to demonstrate that they are actively managing human rights and environmental risks. If enacted, it would represent one of the most significant changes to corporate accountability in the UK in decades.

What is a Private Member's Bill, and why does that matter?

Unlike government legislation, a Private Member's Bill is introduced by an individual Member of Parliament or member of the House of Lords rather than by the Government. This bill was introduced in the House of Lords by Baroness Young of Hornsey. It has completed its first reading and is currently awaiting further parliamentary scrutiny.

Private Member's Bills often face a more challenging route through Parliament than government bills, and many do not become law in their original form. That said, they frequently play an important role in shaping future policy and influencing political debate. They can introduce ideas that later appear in government legislation or signal the direction in which policymakers believe regulation should develop.

That is particularly relevant here. Mandatory human rights due diligence has been discussed in the UK for several years, and similar proposals have been introduced previously. This latest bill demonstrates that the issue remains firmly on the legislative agenda at a time when comparable laws are already being introduced in other jurisdictions.

What does the bill require, and why?

The bill introduces a legal duty for organisations to carry out meaningful human rights and environmental due diligence. Human rights due diligence is a process through which organisations identify how their activities may affect people and the environment, take steps to prevent or reduce those impacts, monitor whether those steps are working, and provide remedy where harm occurs.

Importantly, the bill makes clear that this is intended to be an ongoing process rather than a one-off exercise. It also expressly states that audit reports, certification schemes and membership of industry or multi-stakeholder initiatives are not, on their own, sufficient to fulfil the duty to conduct due diligence. This reflects growing recognition that traditional compliance measures alone cannot always identify or prevent harm within complex global supply chains.

As a minimum, due diligence under the bill would require organisations to:

• informed, meaningful and safe engagement with rightsholders throughout the entire process

• integrating gender-responsive human rights and environmental due diligence procedures into policies and management systems

• identifying, assessing and addressing actual or potential human rights and environmental harms, as well as vulnerability to the impacts of climate change, through prevention, mitigation and remediation, taking into account accurate baseline environmental conditions

• establishing or participating in and maintaining an effective grievance mechanism in line with the effectiveness criteria set out in United Nations Guiding Principle 31

• tracking, verifying, monitoring and assessing the effectiveness of measures taken to reduce or mitigate harms and their outcomes

• reviewing and improving measures based on the outcomes

• communicating with stakeholders and reporting publicly on findings.

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Taken together, these requirements reflect internationally recognised principles for responsible business conduct. They place particular emphasis on engagement with affected people, continuous improvement, and effective remedy, rather than relying solely on policies or supplier questionnaires.

How does this represent a shift from transparency to action?

The proposed bill marks a significant departure from the UK's existing approach under the Modern Slavery Act 2015.

Section 54 of the Modern Slavery Act requires certain organisations to publish an annual statement describing the steps they have taken to address modern slavery in their operations and supply chains. While this has increased transparency, it does not require organisations to undertake due diligence or demonstrate that they have effectively prevented harm. In fact, organisations can comply with the legislation by publishing a statement explaining that they have taken no such steps.

The proposed bill takes a fundamentally different approach. Rather than asking organisations to report on what they have done, it would require them to demonstrate that they have undertaken meaningful due diligence and taken reasonable steps to identify, prevent, mitigate and address harms.

This reflects a wider international trend as seen in the European Union’s Corporate Sustainability Due Diligence Directive, Germany’s Supply Chain Due Diligence Act and France’s Duty of Vigilance Law. While each framework differs in scope and enforcement, they share a common objective: moving corporate accountability beyond disclosure and towards demonstrable action.

For organisations operating internationally, this direction of travel is becoming increasingly familiar. Rather than treating human rights as a reporting exercise, regulators are increasingly expecting companies to embed due diligence into governance, risk management and business decision making.

Which organisations would be in scope?

The bill applies broadly to organisations carrying on business in the UK.

By including overseas organisations operating in the UK alongside UK-based businesses, the bill seeks to create a more consistent standard for organisations accessing the UK market.

Specific public reporting requirements would apply to commercial organisations with annual worldwide turnover of £36 million or more.

What are the penalties for non-compliance?

Commercial organisations found to be in breach could face fines of up to 10 percent of global turnover, alongside compliance notices, restoration notices, stop notices, exclusion from public procurement for up to five years and orders for costs.

Providing materially false or misleading information during reporting or enforcement processes could constitute an offence for the organisation in question.  

The bill also introduces potential liability for directors and other responsible persons in certain circumstances, including repeated enforcement action or knowingly, or recklessly, approving false or misleading reporting. In the most serious cases, sanctions could include fines, imprisonment and director disqualification.

In addition, the bill creates a separate offence where an associated person commits specified serious crimes, including modern slavery offences, corporate manslaughter, murder, rape, genocide, crimes against humanity or war crimes, in order to obtain or retain business or a business advantage.

These penalties are intentionally severe. Mandatory due diligence laws are designed not simply to encourage reporting, but to drive meaningful changes in corporate governance. Strong enforcement mechanisms create incentives for organisations to integrate due diligence into everyday decision making rather than treating it as a compliance exercise.

Why should organisations start thinking differently now?

Whether or not this particular bill ultimately becomes law in its current form, it reflects a broader change in regulatory expectations.

Across multiple jurisdictions, lawmakers are moving away from frameworks based primarily on transparency and towards legislation that requires organisations to identify, prevent and address human rights and environmental harms throughout their value chains. Investors, customers and public authorities are increasingly asking similar questions.

For many organisations, the biggest challenge is unlikely to be producing another report. It will be demonstrating that they understand where risks exist, that they have engaged meaningfully with affected stakeholders, that they have taken appropriate action to prevent harm, and that they can evidence the effectiveness of those actions over time.

Organisations that begin viewing human rights due diligence as an ongoing management process, rather than a reporting requirement, will be better placed to respond as regulation evolves. Regardless of the fate of this individual bill, due diligence is the global trajectory and the UK will benefit from alignment with it.  

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