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Linda Freiner

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Ashleigh Owens

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Thomas Schrøder

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Blog | Thursday August 14, 2025

Developing Integrated Approaches to Human Rights, Climate, and Nature

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In July 2025, the International Court of Justice affirmed that all nations have a binding duty to protect the climate, recognizing a clean, healthy, and sustainable environment as a fundamental human right. It warned that inaction or harmful conduct—such as fossil fuel production and subsidies—may require reparations, including through ecosystem restoration and financial compensation. These obligations remedy both human welfare and biodiversity harms, underscoring the inseparable link between environmental protection and human rights.

This decision, alongside ambitious regulations like the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD) and rising litigation on climate- and nature-related human rights impacts, reflects growing recognition of the need to address the triple planetary crisis of climate change, pollution, and biodiversity loss while upholding human rights.

For business, this is an opportunity to integrate environmental and social strategies, as impacts on climate, deforestation, land degradation, and pollution are often tied to human rights harms—and vice versa. And while business efforts to mitigate climate change are urgently needed, climate action that ignores people can lead to job dislocation and community displacement.

Many companies, however, struggle with effective human rights and environmental due diligence (HREDD) due to fragmented regulations, siloed internal systems, and limited guidance, slowing progress toward integrated, impactful action.

Key Challenges

Siloed Operational Frameworks

The OECD Guidelines for Multinational Enterprises’ risk-based due diligence approach sets consistent expectations for businesses seeking to address their impacts on climate, nature, and human rights. However, this approach is inconsistently reflected across operational frameworks in these fields. These operational frameworks are intended to guide impact identification, assessment, and action on internationally recognized human rights standards and global environmental goals and targets (e.g., UN Guiding Principles on Business and Human Rights, Science-Based Targets initiative, Science-Based Targets for Nature), hindering integrated HREDD. Differences in terminology, methodologies, and stakeholder expectations of each persist, making it harder for teams within companies to coordinate. Some frameworks prioritize outward impact management, others financial materiality, and a few integrate both, complicating alignment.

Different Data Sets, Varying Methodologies

One challenge for companies in delivering effective HREDD lies in the data. Environmental assessments typically rely on quantitative metrics, e.g., carbon emissions, energy use, or water consumption. Human rights assessments are largely qualitative, requiring stakeholder input, contextual nuance, and narrative disclosure. The ease of quantifying environmental data and performance can lead companies to prioritize environmental over social initiatives.

Integrating qualitative and quantitative data is essential for a complete risk picture. Scientific indicators provide critical metrics, but combining them with local knowledge and cultural context can uncover issues that numbers alone miss. This approach strengthens decision-making when data are incomplete and helps identify cumulative impacts where different risks intersect and amplify each other. For institutional investors (or universal owners, such as pension funds and sovereign wealth funds), this is critical, as systemic risks from the interaction between climate change, biodiversity loss, and inequality pose a far greater threat to portfolios than the performance of any single company.

Some sectors, like oil, gas, and mining, have incorporated social considerations into Environmental Impact Assessments (EIAs), producing Environmental and Social Impact Assessments (ESIAs). However, the primary purpose of such assessments is not to assess a company’s broader impacts against internationally agreed environmental conventions. Rather, ESIAs are project-specific tools designed to identify, predict, evaluate, and mitigate potential environmental and social impacts before a project proceeds and in compliance with domestic laws and permitting requirements, which may differ from international standards.

Limited Guidance on Interaction and Synergies between EU-Wide Sustainability Laws

The EU’s sustainability laws were developed by different Commission bodies on separate timelines, with limited guidance on how requirements are meant to work together. This raises practical questions, including:

• How should high-level due diligence under CSDDD support compliance with more prescriptive regulation, e.g., EU Deforestation Regulation (EUDR), EU Batteries Regulation?
• Can EUDR risk assessments be leveraged to support compliance with other requirements, e.g., EU Forced Labour Regulation?
• How can integrated HREDD, including in the context of climate transition plans under CSDDD, inform CSRD reporting on intersecting environmental and social impacts?

These and other factors can contribute to siloed compliance approaches, where legal teams may lead on CSDDD; environment, health, and safety departments on environmental impacts; and finance teams on non-financial reporting of HREDD under CSRD. While dedicated teams, systems, and resources can be valuable for managing business impacts on people and the environment, working in silos can create fragmented cultures, poor information sharing, and duplicative processes that fail to build on existing, well-established approaches. This can undermine a coherent strategic direction and weaken leadership buy-in.

The Path Forward: Building Bridges Across Fields and Business Functions

An integrated approach to climate, nature, and human rights is essential to long-term business value. While geopolitical tensions may slow regulatory momentum, expectations are rising for companies to holistically address their impact on people and the planet.

Some companies are already moving in this direction. For example, Unilever’s People and Nature Policy connects deforestation, regenerative agriculture, and human rights, including land rights and the protection of human rights defenders. A food and beverage company is tackling emissions, waste and pollution, and human rights by adopting a circular economy model developed with local governments to support and protect informal waste workers. 

How BSR Can Help

To support companies, BSR is undertaking initiatives that provide clarity on coherently implementing standards:

• Multi-stakeholder engagement to bring key organizations together, including standard setters, to develop a shared understanding of what good looks like when integrating human rights and environmental impacts into one due diligence process
• Building a platform on people-centered climate action in private capital markets to support private equity and venture capital investors on advancing a just transition
• Supporting members on integrated human rights and environmental due diligence in line with OECD Guidelines
• Creating collaborative spaces for companies to advance in this area, including through the Human Rights Working Group, Climate and Nature Working Group, and Impactful Sustainability Due Diligence Roundtable Series
• Developing insights, including on how to take an integrated approach to climate and human rights under CSDDD and across regulatory compliance efforts

Interested in implementing effective HREDD in your company? Reach out to BSR’s Human Rights team.

People

Femke de Man

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Chris Coulter

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Catherine O’Callaghan

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Laura Houston

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Blog | Tuesday August 5, 2025

Ten Lessons on Developing Effective Sustainability Strategies

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Business sustainability roles are evolving from siloed functions to core strategic players, embedded within various departments, aligned to and integrated fully in a company’s business strategy. A strong sustainability strategy guides a company in managing its environmental, social, and governance priorities; maximizing value creation opportunities for the business; minimizing financial risk; understanding stakeholder expectations; and addressing the imperative to avoid harm to people, the environment, and livelihoods. Without an effective sustainability strategy, companies may face significant risks, including investor divestment, legal non-compliance, and lack of competitiveness in a rapidly evolving market, ultimately undermining their long-term resilience and the trust of their stakeholders. 

Based on BSR’s three decades of working with companies around the world and across sectors, we share ten lessons for companies on developing effective sustainability strategies that will enhance resilience and create business value.  

1. Sustainability strategy needs to be informed by, aligned with, and supportive of business strategy. A holistic sustainability strategy needs to account for how the company creates value as a business and for society, its business goals, and how sustainability can support value creation, resilience, and innovation.  
2. Sustainability strategy is informed by and takes forward materiality. A sustainability strategy with material issues at its core ensures key topics and issues are covered. However, not all material issues are strategic, and distinguishing between the two is key. Furthermore, as the materiality field shifts toward compliance with mandatory disclosure, it is essential that sustainability strategies go further to connect dots between issues, clarify the “so what for business?” questions beyond simply understanding what needs to be reported, and ensure that companies mitigate impacts and risks while capturing business opportunities.  
3. Use stakeholder insights as a compass. Gathering insights from key internal and external (where relevant) stakeholders and understanding the level of desired (or expected) ambition is instrumental in setting goals, targets, and action plans. Doing so helps guide leadership on what is most important and why to act. 
4. Benchmarking can help illustrate what might be possible and identifies examples of leadership. Benchmarking shows various industry practices, commonalities, and examples of leadership within sustainability practices and performance. However, benchmarking has its limitations. It is important to refer to external context, standards, and frameworks to gain a more holistic understanding of what "good" looks like and avoid convergence to the middle. 
5. Strategic foresight enables business resilience and long-term value creation. Looking ahead is essential for creating strategies that are guided by a clear vision and built for long-term change. ”Futures thinking” can help make companies more resilient to volatility and shocks by helping their leaders better anticipate both risks and opportunities for value creation.   
6. It is essential to invest time in listening and communicating internally. The biggest challenge to most sustainability strategies, once leadership buy-in and alignment is achieved and the strategy is set, is implementation. Enabling ownership and uptake across business units and functions; listening to and retaining existing goals, work, and programs; and building off successes and avoiding repeated mistakes are key to creating strategies that work in practice. 
7. Clear governance and accountability systems are critical to success. Clarifying responsibilities, integrating operational execution of goals and targets into the organizational culture, and building relationships will enable a smooth transition from strategy creation to execution. A robust governance model promotes a continuous dialogue with the board to obtain their input and oversight, with a focus on long-term value.   
8. Continuous upskilling is needed internally, with structured engagement externally. Amid shifting investor expectations and rising regulatory demands, sustainability issues and its broader landscape are evolving rapidly. A company culture of continuous upskilling helps staff understand emerging issues, like the impacts of AI, biodiversity, and the just transition, and act with agility in responding to new risks and opportunities. This approach, coupled with structured and continuous external engagement, also keeps companies apprised of changing stakeholder expectations and attuned to potential collaboration opportunities. 
9. Begin with the end in mind. Start your strategy by defining what “good” (or even “great”) looks like. Ground this vision in stakeholder expectations, ambition-setting exercises, and comprehensive disclosure frameworks’ requirements. Having clarity on the end goal and long-term objective will ensure that your strategy is both aligned with business value creation and built to deliver long-term impact. 
10. Strategic partnership enhances impact. Effective sustainability strategies are not built in isolation. Success comes from combining a company’s deep understanding of its business, governance, and culture with an external partner’s objective perspective, sustainability expertise, and forward-looking approach. Working collaboratively enables both efficiency and greater impact. At BSR, we act as trusted partners, often seen as an extension of our members’ teams, helping to co-create strategies that are grounded in business realities while shaped by broader trends and stakeholder expectations. This partnership model supports long-term value creation and implementation success. 

Sustainability leaders are facing significant headwinds, including regulatory uncertainty, ESG backlash, resource constraints, and shifting leadership priorities. These dynamics test the resilience of even the strongest strategies.  

While the above still hold, they require nuance. For example, benchmarking can be a trap if peers are retreating from their ambitions or are not sharing their work publicly. Now more than ever, it’s about spotting where quiet leadership and continued progress can enable business differentiation without creating new risks. Materiality must go beyond compliance to connect issues, anticipate future priorities, and guide action. Ambition and foresight are strategic assets when others are pausing; they help companies navigate future risk while staying anchored to current purpose. In short, a sustainability strategy today must be principled, adaptive, and built to endure.  

BSR works with member companies to build structured strategic approaches, grounded in foresight and sustainability expertise, that boost long-term business value. If you’re interested in refreshing or designing your next sustainability strategy, or simply seeking quick feedback, please reach out to BSR’s Sustainability Management team.

Insights+ | Wednesday July 30, 2025

Beyond the Business Case Debate: Reasserting the Strategic Value of Sustainability

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