Norges Bank Investment Management

The entity indicates that ‘an EU legal framework is needed’; however, the entity believes that the definition of due diligence should be inline with definitions in existing international standards. The entity picks option 1: ‘Principles-based approach’. However, this is considered a prompted response rather than a proactive call for legislation.

In response to question 2, the entity states that voluntary due diligence standards have not brought about desired level of corporate due diligence and it needs, ‘at EU level to promote a level playing field for companies’.

In response to question 14, the entity considers that it is important to align with existing standards and regulations and points out that ‘the recognition that due diligence is inherently risk-based’ and due diligence should be ‘adapted to each company’s specific circumstances.’

In response to question 15, the entity picks up options 1 and indicates that a general due diligence should be defined at EU level and complemented by EU level general or sector specific guidance or rules.

The entity is in favour of an, ‘Option 1 Principles-based approach’.

In response to question 15, the entity picked a, ‘Principles-based approach’, and states that: ‘a general due diligence duty based on key process requirements should be defined at EU level identification, prevention and mitigation of relevant human rights, social and environmental risks and negative impact. These should be applicable across all sectors.’ In response to question 15b, the entity states that: ‘We believe this approach would be advantageous in that it applies to all companies while, at the same time giving companies adequate flexibility in the implementation in line with existing international due diligence standards.’

The entity disagrees to some extent on directors’ legal duty to identify their company’s stakeholders and interests.

In response to question 6, although the entity acknowledges that is it needed to consider stakeholders and their interests, the entity believes that a legal requirement may create an unfavourable impression and relevant guidance is already described in corporate governance codes.

In response to question 7, the entity believes that boards should understand the broader environmental and social consequences of company operations and consider the interests of relevant stakeholders; however, legal requirements may be overly descriptive and end up as a box-ticking exercise.

The entity states that, ‘an EU legal framework is needed’, and encourage, 'referring to due diligence duty across a company’s operations and in the company’s value chain (ref UNGP principle 13)'. However, the reference to value chain coverage is vague and not considered a strong call for full coverage of the value chain for the entire HRDD process (Including identification of risks, as well as mitigation and remediation).

In response to question 2, the entity states that voluntary due diligence standards have not brought about desired level of corporate due diligence and it needs, ‘at EU level to promote a level playing field for companies’, and thinks, ‘Corporate due diligence can also help investors to identify and assess human right risks.’

In response to question 3, the entity picks up options 1, 3, and 6, stating that: ‘Ensuring that the company is aware of its adverse human rights, social and environmental impacts and risks related to human rights violations other social issues and the environment and that it is in a better position to mitigate these risks and impacts; Levelling the playing field, avoiding that some companies freeride on the efforts of others; Harmonisation to avoid fragmentation in the EU, as emerging national laws are different; Other’.

In response to question 14, the entity emphasises that it should align, ‘definitions of due diligence in existing international standards’, and, ' encourage referring to due diligence duty across a company’s operations and in the company’s value chain (ref UNGP principle 13)'.

In response to question 15, the entity picked a ‘Principles-based approach’, and states that: ‘a general due diligence duty based on key process requirements should be defined at EU level. These should be applicable across all sectors.’

Although the entity disagrees to some extent with the director’s legal duty on identifying stakeholders, the entity agrees that companies should know their stakeholders, manage related risks and identify opportunities.

In response to question 6, the entity states: ‘Board members should consider stakeholders and their interests, as they are in our view relevant for the long-term prospects of a company. This requires knowing their stakeholders, managing related risks and identifying opportunities related to promoting stakeholders’ interests.’

The entity disagrees to some extent on directors’ legal duty to identify company’s stakeholders and their interests, or set up procedures for impacts identified.

In response to question 6, the entity believes that: ‘a legal requirement may create the impression that this is a compliance exercise whereas we see it as a core duty of board members to take into account the interest of relevant stakeholders.’

In response to question 7, the entity considers that: ‘legal requirements may be overly descriptive and end up as a box-ticking exercise.’