How to meet expectations?

Companies may choose to report on human rights for different reasons: legal requirements, stakeholder expectations, risk management, strategic positioning, etc. In most cases, it is a combination of drivers. In this section, we delve deeper into the why and how of human rights reporting.

Reporting in the UNGPs and OECD Guidelines

Due diligence standards identify communication as an integral part of due diligence. Under the UNGPs, companies are expected to "know and show" that they respect human rights—meaning that they should not just identify and manage risks, but also communicate about how they do this. Similarly, the OECD identifies "communicating how impacts are addressed" as one of the steps in its due diligence framework.

Communication goes beyond formal reporting, and can include other forms of engagement (see section XX). Yet in this section, we focus on formal human rights reporting: the structured and public disclosure of human rights information, typically through sustainability reports, annual reports, or dedicated online channels. This focus on formal reporting is justified not only because it is increasingly a legal requirement, but also because it plays a central role in enabling transparency and accountability.

The UN Guiding Principles Reporting Framework (UNGP RF)

The UN Guiding Principles Reporting Framework (UNGP RF) (first launched in 2015) was the first comprehensive guidance for human rights reporting. Unlike formal reporting standards like GRI or the ESRS, it does not prescribe specific disclosures. Instead, it poses open-ended questions that help companies explain how they identify, prioritize, and address human rights risks.

In the spirit of the UNGPs, it emphasizes continuous improvement, meaningful stakeholder engagement, and transparency about the reasoning behind due diligence decisions. Rather than generating comparable metrics the focus lies on narrative reporting. In this sense, the UNGP RF complements rather than replaces standards like the ESRS or GRI, as it can help companies add depth and context to their disclosures.

Towards mandatory reporting?

In recent years, legislative initiatives have emerged that mandate sustainability reporting for large companies. The EU has been at the forefront of this legislative push:

The Corporate Sustainability Reporting Directive (CSRD) requires large companies (including financial institutions) to disclose information on material sustainability topics in accordance with European Sustainability Reporting Standards (ESRS). Specifically, companies must identify and report on their (potential) sustainability impacts, on associated financial risks and opportunities, and on how these impacts, risks, and opportunities are managed. The ESRS also contain mandatory disclosures on due diligence processes.

The Sustainable Finance Disclosure Regulation (SFDR) and EU Taxonomy Regulation impose reporting obligations on financial market participants. Specifically, they require disclosures on whether and/or how investments align with sustainability goals, and respect minimal social safeguards—which are defined in line with the OECD Guidelines. In addition, financial market participants in the EU are subject to Pillar III disclosure obligations, which requires reporting on ESG risk exposure. While Pillar III does not require explicit human rights reporting, its risk disclosure obligations mean that banks must consider and, where material, report on human rights risks as part of their prudential disclosures

Beyond the EU, several countries have adopted national legislation that mandates some form of human rights reporting. Key examples include includes national due diligence laws in France, Germany, and Norway; modern slavery legislation in the UK and Australia; and the Fighting Against Forced Labour and Child Labour in Supply Chains Act in Canada (see section 1).

In addition to legally binding reporting requirements, there are also "quasi-binding" reporting requirements that emanate from particular stakeholders. For instance, a growing number of stock exchanges devote attention to human rights in their ESG disclosure guidance to issuers. However, the depth and specificity of these requirements vary, with some exchanges focussing rather narrowly on modern slavery risks. Another example is the PRI Reporting Framework. The Principles for Responsible Investment (PRI) is a voluntary initiative for institutional investors, but signatories are required to report annually on their ESG practices, including alignment with the UNGPs and OECD Guidelines.

Useful resources:

SSE Initiative (2021). Stock Exchange Guidance on Human Rights Disclosure. https://gsfo.org/resource/stock-exchange-guiance-human-rights-disclosure
European Banking Authority (2025). Final Report: Guidelines on the management of environmental, social, and governance (ESG) risks.

Human rights in reporting standards

When reporting on sustainability, companies can choose to follow reporting standards. The choice of standard can be influenced by legal requirements, stakeholder expectations, industry norms, or internal priorities.

Before discussing if- and how different reporting standards pay attention to human rights, we need to briefly elaborate on the concept of materiality. Human rights can be material to companies in two ways.

1

Impact materiality

When a company's own activities, or those of its business partners, have positive or negative human rights impacts.

2

Financial materiality

When human rights create financial risks or opportunities for the company—e.g. reputational damage, legal liability, or supply chain disruptions.

Reporting standards may apply one of both perspectives, or may apply the principle of double materiality.

Standard	Materiality perspective	Human Rights Coverage
GRI	Impact materiality	Reporting on due diligence under GRI 2. Dedicated topical standards (e.g. GRI 412, 408, 414) aligned with UNGPs and OECD Guidelines.
ISSB	Financial materiality	Implicit coverage via IFRS S1 (general requirements). SASB sector metrics may include human rights related indicators.
ESRS	Double materiality	Reporting on due diligence under ESRS 2. Reporting on policies and actions to mitigate negative impacts under social standards S1-S4.

The Global Reporting Initiative (GRI): GRI standards

GRI standards remain the most widely used sustainability reporting framework. They focus on impact materiality, requiring companies to identify and report on topics when they may have significant positive or negative effects on people or the environment in relation to these topics.

The GRI framework is modular, consisting of universal standards, topical standards, and sectoral standards. Looking specifically at human rights, the GRI asserts that its standards are the only ones that are fully aligned with the UNGPs and the OECD Guidelines.

GRI 1 (Foundation) establishes human rights as a cross-cutting responsibility across sustainability topics.
GRI 2 (General Disclosures) includes disclosure requirements on due diligence processes.
GRI 3 (Material Topics) requires companies to explain how they have identified their most significant impacts, including through stakeholder engagement and impact assessments.
When human rights are identified as a material topic, companies must report in greater detail using relevant topical standards such as GRI 412 (Human Rights Assessment), GRI 408 (Child Labour), or GRI 414 (Supplier Social Assessment).

The International Sustainability Standards Board (ISSB): IFRS standards

The International Sustainability Standards Board (ISSB), which falls under the IFRS Foundation, is establishing a new global baseline for sustainability reporting, as a growing number of jurisdictions have adopted—or are considering to adopt—its standards for mandatory reporting (for an overview, see Deloitte's ISSB adoption tracker). The ISSB's approach is rooted in financial materiality, meaning companies are only expected to report on human rights when these are linked to financial risks or opportunities.

So far, the ISSB has issued two IFRS standards: IFRS S1 (General Requirements) and IFRS S2 (Climate-related Disclosures). While IFRS S1 does not explicitly identify human rights as a reporting category, it does expect companies to disclose all material sustainability-related risks and opportunities, along with the processes used to identify, assess, and manage them. Depending on a company's sector and operating context, this might include risks and opportunities connected to human rights.

To support implementation, the ISSB also refers companies to the SASB Sector Standards. Some of these sector standards contain metrics on human rights (e.g. labour practices, community impacts, supply chain risks), but coverage varies widely across sectors, and they are not framed in terms of human rights due diligence.

European Sustainability Reporting Standards (ESRS)

The European Sustainability Reporting Standards (ESRS) are the mandatory reporting framework for companies subject to the CSRD. They consist of 12 standards: 2 cross-cutting standards (ESRS 1 and 2) and 10 topical standards linked with environmental (climate, pollution, water, biodiversity, circularity), social (own workers, value chain workers, communities, consumers) and governance topics.

Unlike GRI and ISSB standards, the ESRS are built around the principle of double materiality. First, companies must identify and assess (through a "double materiality assessment") impacts, risks, and opportunities linked with sustainability topics, in order to identify their material topics. Second, companies must report on how they manage these topics, in accordance with the topical ESRS standard.

Key standards and disclosures relevant to human rights include:

ESRS 2 (General Disclosures): Requires disclosures on due diligence.
The social standards (ESRS S1-S4) require companies to disclose their (potential) negative impacts on their Own Workforce (S1), Workers in the Value Chain (S2), Affected Communities (S3), and Consumers and End-Users (S4). In addition, companies must report on their policies and actions to manage these (potential) impacts.

As part of the broader Omnibus reforms, in July 2025 EFRAG—the body tasked with the development of European reporting standards—released exposure drafts of the revised ESRS. While these drafts contain substantial simplifications, the core disclosure requirements in relation to human rights would remain largely intact.

Useful resources:

Several large consulting firms maintain "sustainability reporting trackers" in which they follow the adoption of sustainability reporting standards in different jurisdictions. See, for instance, PwC's Sustainability Reporting Tracker.

The role of assurance

Assurance is the independent evaluation of reported information to confirm its reliability, accuracy, and alignment with established standards. Assurance is typically performed by an external party (usually an auditor) who provides a professional opinion. In most jurisdictions, external assurance of sustainability information remains voluntary. However, companies in scope of the CSRD must seek external assurance from an auditor.

There are two levels of assurance:

Limited assurance, whereby the auditor checks for red flags that suggest that information may be misstated. The outcome is typically a negative statement: "Nothing has come to our attention that leads us to believe that the information is misstated".
Reasonable assurance, whereby the auditor checks if the information is "true and fair", through more extensive testing and possibly even site visits and interviews. The outcome is typically a positive statement: "In our opinion, the information is prepared in full accordance with...".

Section 6

Reporting

Content for Section 6 will be added here.