What is Due Diligence

We hear the term everywhere… In laws, reports, corporate policies, and industry discussions. It’s a central concept in today’s business world, impacting companies of all sizes and sectors - especially in the mineral sector. Yet despite how often it appears, the term due diligence can still feel vague or complex for some people.  This article helps you to unpack what due diligence means, exploring both its practical role for businesses and its deeper meaning as a guiding principle.  

According to the OECD Guidelines for Multinational Enterprises (Chapter II, General Policies, Paragraph 15), due diligence is understood as the process through which enterprises can identify, prevent, mitigate and account for their actual and potential adverse impacts, that is, as an integral part of business decision-making and risk management systems. These adverse impacts include environmental harm, human rights violations, corruption, or unsafe working conditions, whether caused directly by the company or indirectly through its suppliers and business partners. 

Hence, for successful businesses, due diligence is a structured process. The EU has adopted this approach through legal instruments like the Corporate Sustainability Due Diligence Directive (CSDDD), EU Batteries Regulation, Conflict Mineral Regulation and others, which are also intended to ensure that companies identify, prevent and mitigate adverse human rights and environmental impacts across their operation. This means taking a closer look not only at who supplies your materials, but also how those materials were produced. But to truly understand due diligence, it’s worth taking a step back… Although widely applied as a business process, the due diligence term also refers to a guiding principle. 

Let’s split it into three parts: due + di + ligence. 

1.  Due comes from the Latin dēbēre¹, meaning “to owe,” “to be indebted,” or “to be expected,” as in “due date.” 

2. The prefix di- means “thoroughly,” as in dilute, emphasizing the sense of “careful” and “thorough effort.” 

3. Ligence comes from legere¹, meaning “to choose,” as seen in words with the same root like intelligence (choosing between). 

Understanding the origin of the term helps us reconnect with its core idea: that we are expected to choose carefully, not just following rules, but applying a mindset of responsibility. It is a principle that we apply even in the absence of explicit laws. The legislative framework and international guidelines in Responsible Business Conduct aim to embed this mental attitude in corporate strategies. This is why the UN Guiding Principles on Business and Human Rights (principle 16), require companies to adopt a policy commitment expressing their commitment in respecting human rights, reflecting it in their operational procedure and throughout the business enterprises.  

When due diligence is seen as both a mindset and a method, it becomes a powerful tool for business, because it is a way of thinking that drives how we should act. It’s no longer only about ticking boxes (you’ve likely heard it before). Without a guiding principle, a box-ticking exercise is just paperwork. But you might still wonder why it matters to go beyond the paperwork, why you should choose carefully? According to the United Nations Industrial Development Organization (UNIDO), approximately 450 million people are employed in supply chain-related jobs. If you include their direct partners, relatives, and communities affected by business operations, it becomes clear that the choices companies make regarding human rights and environmental responsibility directly influence the well-being of societies worldwide.

“Choose carefully” reminds us of our humanity and our commitment to people and nature. That’s why policymakers, world leaders, community leaders, NGOs, universities, etc, we’re all in this together, working to help companies implement due diligence effectively. And why? Well, now you know.