On December 15, 2020, the French and Dutch financial market authorities released a joint position paper that calls for European regulation pertaining to the provision of environmental, social and governance ("ESG") data, ratings, and related services.

On 17 December 2020, the European Parliament adopted a Resolution on sustainable corporate governance. While not legally binding, the Resolution (and its related report) highlights the strong expectation that upcoming corporate governance proposals from the European Commission will include a series of additional mandatory sustainability-related obligations and incentives for companies.

As 2020 edges toward a close, we can look forward to a 2021 defined by three Rs - recovery, rebuilding, and restoring. With that in mind, selecting just 10 business and human rights issues we predict will be salient through 2021, given the unpredictability of this past year and the number of issues we will confront next year, is a risky proposition. But in honor of Human Rights Day last week, below are 10 business and human rights issues we believe will receive particular attention between January 1 and December 31, 2021.

On December 7, 2020, the European Council, the EU’s highest body, adopted a decision and regulation establishing the first EU global human rights sanctions regime. The framework, which is similar to the U.S. Global Magnitsky Act, will allow the EU to target individuals and entities associated with serious human rights violations and abuses with sanctions, including a ban on travel and freezing of funds.

Over the past several years, companies have been dramatically increasing their focus on risks associated with environmental, social and governance issues, and human rights in particular (ESG/HR).  These have led a growing number of companies to create dedicated ESG/HR compliance programs or management systems.  While managing these issues and impacts is increasingly critical, given the interconnectedness of virtually all international regulatory compliance-related risks – including anti-corruption, sanctions and trade controls, and money laundering, to name a few – it is important also to consider how ESG/HR risks can be integrated into broader, more comprehensive compliance programs.  This post, the first in a series, outlines the approaches that businesses are starting to take.

As part of a growing focus on financial institutions and modern slavery, the Financial Crimes Enforcement Network (FinCEN) recently issued FinCEN Advisory FIN-2020-A008. The Advisory supplements FinCEN’s similar 2014 guidance, both of which are designed to assist financial institutions recognize activity that may be associated with human trafficking and modern slavery.

Earlier this year, the Commissioner for Justice of the European Union announced that next year the Commission will present a legislative initiative compelling companies to conduct human rights due diligence throughout their operations and supply chains, with accompanying enforcement and civil liability provisions. Because the jurisdictional breadth of the initiative is likely to be expansive, including companies doing business in the EU regardless of where they are domiciled, the impact will have global repercussions. As we have written previously, an EU mandatory human rights due diligence requirement – at least as it appears to be contemplated - is likely to have vast implications, catapulting global human rights due diligence to a business imperative akin to anti-corruption diligence.

With election season heating up, we increasingly are asked for predictions regarding a potential Biden Administration’s approach to ESG (Environmental, Social, and Governance) and business and human rights. To some extent, that seems fairly clear. Former Vice President Biden has stated strongly that he sees climate change as an accelerating threat, and has released a detailed plan that sets a target of achieving net zero emissions by 2050. The campaign also has pledged to address diversity and inclusion, and when the former Vice President introduced his economic plan, he stated expressly that corporations have ESG responsibilities to their workers, community and country. In that vein, corporate governance requirements and mandated disclosures almost certainly would change.

With little fanfare, an Intergovernmental Working Group (IGWG) released the Second Revised Draft of a proposed binding treaty on business and human rights. This is third iteration of the proposed treaty, which has been steadily progressing since June 2014, when the UN Human Rights Council adopted a resolution by Ecuador and South Africa to create an international legally binding instrument to regulate Transnational Corporations and Other Business Enterprises with respect to human rights.