8-18. Future Predictions for Mandatory Human Rights and Environmental Due Diligence

Mandatory human rights and environmental due diligence is expected to become an increasingly global trend. Preventing human rights violations and environmental damage within companies and throughout their supply chains goes beyond simple legal compliance; it directly impacts maintaining trust in the global market and sustainable management.

The European Union (EU) is currently discussing the Corporate Sustainability Due Diligence Directive (CSDDD), which would require companies operating within the EU to assess human rights and environmental risks, implement corrective measures, and disclose information. Japan and other Asian countries are also considering introducing similar regulations, forcing import and export companies to comply with international standards.

In the future, we expect the scope of mandatory compliance to expand from large corporations to small and medium-sized enterprises. As transparency throughout the supply chain becomes increasingly important, strengthening audits of trading partners and requests for improvements will be essential. Furthermore, utilizing digital technology to ensure traceability and introducing AI-based risk analysis will be key elements in supporting efficient due diligence.

Furthermore, stricter information disclosure is expected to change the evaluation criteria of investors and consumers. Companies that delay responding to human rights and environmental due diligence may lose opportunities for fundraising and market entry. On the other hand, companies that take the lead in addressing these issues may be able to improve their brand value and establish a competitive advantage.

Overall, the future of mandatory human rights and environmental due diligence is likely to evolve from a matter of corporate compliance to a strategic management issue. The key to sustainable growth is for companies to begin establishing systems now and ensure responsible behavior throughout their supply chains.