Effective Remedy in Jeopardy? Lessons from the UNGPs, CSDDD, and EU Omnibus Proposal
Amid shifts in the regulatory environment for human rights due diligence, BSR highlights key elements related to remedy from the UNGPs, CSDDD, and the EU Omnibus that companies should consider to prepare for emerging regulations, as well as four pathways to facilitate effective remedy for business impacts.
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Key Points
- According to the UN Guiding Principles on Business and Human Rights (UNGPs), companies are expected to provide or cooperate in enabling access to remedy for human rights impacts associated with their operations and business relationships. Aligning with these expectations will help companies prepare to meet the requirements of the EU Corporate Sustainability Due Diligence Directive (CSDDD), as well as other regulations on human rights due diligence.
- The CSDDD generally aligns with the UNGPs regarding access to remedy and grievance mechanisms. However, the recent EU Omnibus proposal (henceforth referred to as “Omnibus”) undermines key provisions designed to ensure effective access to remedy for victims.
- BSR shares elements related to remedy from the UNGPs, CSDDD, and the Omnibus that companies need to keep in mind, as well as four ways for companies to facilitate and provide effective remedy.
According to the UN Guiding Principles on Business and Human Rights (UNGPs), companies are responsible for providing and cooperating in enabling access to effective remedy for harm associated with their operations and business relationships. Upholding this responsibility helps companies align with international standards and emerging regulations, while enhancing risk management and trust with affected stakeholders. The Corporate Sustainability Due Diligence Directive (CSDDD) represents a comprehensive attempt to harmonize corporate responsibility to respect human rights and environmental impacts, including on access to remedy. While the CSDDD generally aligns with the UNGPs on this topic, the recent Omnibus undermines key CSDDD provisions intended to ensure effective remedy for victims.
Elements of Access to Remedy: What Companies Need to Know
Based on our experience working with companies on access to remedy and the development of effective grievance mechanisms, the following elements of the UNGPs and the CSDDD merit particular attention from companies. Relevant sections of the Omnibus that modify CSDDD remedy provisions are highlighted where applicable:
- Scope of Business Responsibilities: Access to remedy is a human right, and a company’s failure to provide or enable remedy after harm occurs can itself constitute an adverse human rights impact. This underscores the expectation that companies take action not only when they cause or contribute to harm, but also when harm is directly linked to their operations, products, or services through business relationships. Under the UNGPs and the CSDDD, companies are expected to provide or cooperate in remedy when they cause or contribute to an impact (“jointly caused” under the CSDDD). Remedy is understood as restoring affected rightsholders as closely as possible to their situation before the harm occurred. Where the impact is caused solely by a business partner, the CSDDD asks companies to: (i) voluntarily provide remedy, and (ii) use their influence to enable effective remedy. This reflects the broader principle that companies should use leverage to prevent and mitigate human rights impacts, including those tied to failures to provide remedy.
- Proportionality: Both frameworks stress that remediation should be proportionate to the gravity of the impact and the company’s involvement in the adverse impact.
- Remedy Ecosystem: The UNGPs promote a remedy ecosystem with complementary judicial and non-judicial mechanisms. The CSDDD promotes a remedy ecosystem through both civil liability provisions (for intentionally or negligently failing to comply with due diligence obligations) and non-judicial mechanisms. However, the EU Omnibus removes the civil liability provisions from the CSDDD, overriding the requirement for Member States to prioritize the CSDDD’s harmonized liability framework. As a result, each EU country will rely on its own laws, which increases the risk of jurisdictional fragmentation and creates complexity for companies facing lawsuits under differing standards. Additionally, the EU Omnibus removes the CSDDD’s explicit provision allowing trade unions and NGOs to file claims on behalf of victims, potentially limiting their access to remedy.
- Remediation Mechanisms: Both frameworks expect companies to establish and/or participate in accessible grievance mechanisms (“complaints procedure” under the CSDDD) that allow individuals to raise legitimate concerns about actual or potential impacts. These mechanisms also serve as early warning systems. The UNGPs outline key effectiveness criteria of grievance mechanisms (legitimate, accessible, predictable, equitable, transparent, rights-compatible, and a source of continuous learning), which the CSDDD reinforces. The CSDDD also mandates that companies provide an accessible “notification mechanism” for persons and entities to submit information or concerns about actual or potential adverse impacts, including options for anonymity and safeguards against retaliation. Companies can meet these requirements through joint initiatives, including those led by industry associations, multi-stakeholder platforms, or global framework agreements. While the Omnibus retains the requirement for effective grievance mechanisms, it introduces a maximum harmonization principle, preventing Member States from setting higher standards.
Stakeholder Engagement: Both frameworks call for remediation based on engagement and dialogue with stakeholders. The EU Omnibus narrows the definition of “stakeholder” to “directly” affected workers and their representatives, individuals, and communities whose rights or interests could be directly affected. However, it still retains the requirement to consult with affected individuals when providing for and cooperating in remediation, as well as in the development and operation of effective grievance mechanisms. This narrower scope may hinder companies’ ability to identify impacts deeper in the value chain, reducing victims’ opportunities to access effective remedy.
Facilitating and Providing Effective Remedy
By meeting the UNGPs’ expectations, companies will be well positioned to align with CSDDD requirements. Based on our experience in helping companies navigate these shifts, we recommend that companies:
Know and strengthen their remedy ecosystem. Mapping the remedy ecosystem, including peer and multi-stakeholder initiatives with grievance mechanisms, helps companies design effective grievance mechanisms, use leverage to address harm, engage business partners and key stakeholders, and plan for a responsible exit if needed. A strong remedy ecosystem can expand the company’s reach, offer creative solutions where direct oversight is limited, and improve access to remedy for rightsholders.
Develop and maintain effective grievance mechanisms. As the Omnibus limits access to civil liability and narrows proactive due diligence to a company’s own operations and subsidiaries, internal grievance systems will become a critical channel for victims and a key tool for due diligence. Companies must still act on “plausible information” of harm involving indirect partners, making grievance mechanisms essential for identifying and addressing risks. Effective systems should handle complaints tied to indirect partners and align with the UNGPs and CSDDD to ensure accessibility for all stakeholders.
Conduct meaningful stakeholder engagement. Engaging with stakeholders is essential to understanding and strengthening a company’s remedy ecosystem, and the CSDDD outlines UNGP-aligned criteria for such work. Despite the Omnibus changes discussed above, we recommend that companies proactively engage with stakeholders, including civil society, who raise concerns about actual or potential human rights impacts, including those arising from indirect business partners.
Provide effective remedy. This includes requiring companies to assess their role in causing, contributing to, or being directly linked to adverse impacts. International standards recognize multiple forms of remedy—such as restitution, compensation, rehabilitation, satisfaction, and guarantees of non-repetition—which may be used individually or in combination. From the perspective of affected rightsholders, an effective remedy should be accessible, affordable, adequate, and timely.
We recommend that companies remain committed to developing effective grievance mechanisms and using leverage to enable remedy in line with the UNGPs, OECD Guidelines, and other international standards. Aligning with these frameworks positions companies to meet the CSDDD requirements and an evolving regulatory environment. If you have questions on designing your company’s remedy ecosystem approach and providing access to remedy, please reach out to BSR’s Human Rights team.
This article was originally published at the BSR website "Sustainability Insights" and is written by Manuela Corredor Vasquez, Manager, Human Rights and EETI, Ouida Chichester, Director, Energy, Extractives, Transport, and Industrials, & Kindra Mohr, Associate Director, Financial Services and Human Rights at BSR.
