How companies address DD in their sustainability reports

Conducted as part of the DiliCHANCE project, this study presents the findings of a gap assessment examining how large EU-based companies publicly disclose information on their policies and practices for implementing human rights and environmental due diligence (HREDD) along mineral supply chains. The analysis is based on publicly available reports from an exploratory sample of companies that operate in key industrial sectors, i.e. mining, trading, refining and recycling, mobility, electronics and renewable energy.

The primary objective of this assessment is to evaluate how companies’ disclose their supply chain due diligence (DD) policies and practices, and to determine the extent to which these disclosures align with the six-step, risk-based approach recommended by the Organization for Economic Co-operation and Development's (OECD) Guidelines for Responsible Business Conduct (RBC). Based on these guidelines, the study uses a tailored set of indicators and metrics to assess the extent of disclosure, identify gaps and highlight areas for improving corporate transparency and accountability.

While many companies share reports on their early-stage policies or commitments, there is limited transparency in how these are implemented, monitored, and evaluated in practice.

The assessment reveals major gaps in how large EU-based companies publicly disclose their supply chain due diligence efforts. While many companies share reports on their

early-stage policies or commitments, there is limited transparency in how these are implemented, monitored, and evaluated in practice. This is consistent with other benchmarks such as the Responsible Mining Index and Corporate Human Rights Benchmark.

Although many companies recognize the importance of due diligence in their public reports, the information about this approach is usually embedded within broader environment, social and governance (ESG) or compliance structures rather than being reported as a standalone policy. Consequently, the distinct role of the HREDD process may be overlooked, which makes it more difficult to evaluate the depth and impact of such efforts.

Companies tend to report more frequently on the key issues of responsible business conduct such as human rights, environmental protection, anti-corruption, and anti-bribery. In contrast, details of policies related to transparency, governance, and especially consumer protection are less commonly disclosed. This imbalance suggests a selective approach to disclosure, which may be influenced by stakeholder pressure or regulatory attention.

Many companies claim to have risk management systems in place; however, they rarely disclose details on the scope, methods, criteria or review cycles of the risks associated with their own operations or supply chains. This makes it difficult to assess the effectiveness or comparability of these systems.

Although many companies refer to their stakeholder or rightsholder engagement efforts, details of the scope and design of these processes, and of the inclusion of rightsholders (e.g. indigenous peoples, workers and local communities) in various due diligence processes, are rarely disclosed. In particular, public disclosure of the effectiveness of stakeholder engagement processes and their involvement in risk identification, mitigation, monitoring, and remediation design is largely absent. While companies typically have grievance channels, few report on accessibility for vulnerable groups, or the monitoring of effectiveness and delivery of fair and timely remedies.

Although the sample size of this study does not allow for definitive conclusions at the sectoral level, preliminary observations suggest that downstream companies tend to disclose information on their DD policies and process more comprehensively than upstream actors. This is likely due to stronger consumer pressure for accountability and evidence of responsible sourcing practices.

At the policy level, the assessment provides evidence to inform targeted interventions, thereby reinforcing the rationale behind emerging EU measures. Proposed initiatives such as the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) demonstrate a regulatory shift towards standardized due diligence procedures and transparent reporting. However, the assessment reveals that current voluntary disclosures are insufficient to meet these

expectations, particularly regarding risk management and monitoring, stakeholder engagement, grievance mechanisms, and remediation.

The overarching goal of this study and the DiliCHANCE project is to support companies in implementing effective due diligence processes. After identifying gaps, the project will work with companies to understand their needs and co-create practical, actionable solutions to support more effective implementation.