In response to growing demands to better understand the provenance and production conditions of the minerals that underpin modern society, the European Union launched a directive on corporate sustainability due diligence in 2024 (Directive 2024/1760). To assist businesses negotiating the complex landscape of due diligence (DD) reporting, the EU funded the multinational DiliCHANCE project to enhance cooperation between key actors in DD reporting. Subsequently, a new package of measures, entitled the Omnibus proposal, aimed at simplifying the DD reporting requirements while preserving the original objectives, was submitted to the European parliament and is currently under review. However, the current lack of clarity regarding which reporting measures may be required and when they would come into effect has created significant uncertainty for businesses. To address these issues, a diverse panel containing representatives from business and NGOs at the World Resources Forum 2025 (WRF25) in Geneva was convened to share experiences and discuss differing perspectives on the reporting of corporate due diligence and how it may evolve.
A challenging due diligence landscape
To set the scene, the current landscape of due diligence reporting was discussed, using the gap analysis report of the DiliCHANCE project as a starting point for conversation. The main conclusions of the report were that current reporting levels are insufficient and that reporting particularly in relation to situations relating to remediation and stakeholder engagement, could be improved. There was cross-panel agreement with the gaps highlighted by the report and that these likely are pervasive across companies from all industrial sectors.
Companies from across the supply chain have differing challenges relating to their due diligence reporting. For downstream companies, having multiple suppliers is a precaution against supply chain disruption. As an example, BMW has thousands of tier 1 suppliers providing the 36 million parts that they require in more than 30 production sites around the world. Every tier 1 supplier has itself an independent supply chain and this ‘multiplication effect’ significantly complicates reporting on due diligence. Further, such multinational operations necessarily operate in jurisdictions with differing reporting requirements and without any overarching guidelines for reporting, companies are uncertain of the requirements and gaps are inevitable.
The lack of reporting of DD actions in terms of risk assessment and remediation observed in the gap analysis supports previous findings from the OECD. During the discussion in the DiliCHANCE session at WRF25 in Geneva, a number of potential reasons were suggested to explain the lack of reporting in these areas. One suggestion was companies are reluctant to publish such information due to the risk of ‘trial by media’ and associated negative publicity. In the case of BMW, the company is aware of other companies that have been censured for ‘greenwashing’ (primarily by advertisement standard agencies and investigative journalism) and as such they are mindful not to over-promise in terms of due diligence. A third reason suggested for this lack of reporting related to stakeholder engagement was the need to maintain confidentiality during discussions to promote an open exchange of information.
Both companies and NGOs had reservations about the use of certification schemes as an aid to due diligence reporting, albeit for slightly differing reasons. From the company perspective, site specific audits may provide data on a location, but often they neglect the effects on people in the surrounding areas. Equally, many of the things that would be good to measure are difficult to provide quantitative data on. A perspective from the NGO side was that often these certifications are not fit for purpose and gaining a certification from such a scheme can give the public a false sense of security regarding the DD activities of a company.
From a consumer’s perspective it’s like solving a jigsaw puzzle. [The lack of harmonisation in reporting requirements]
A path forward
Both companies and NGOs highlighted the dual importance of communication and collaboration. With companies facing the same challenges, there is great opportunity for learning from one another about successful approaches to DD reporting. Establishing an open and supportive environment to allow for the free exchange of information between companies and NGOs, as typified by the DiliCHANCE project, also has great potential to improve DD reporting. Even further, there needs to be an increase in the collaboration between politics and business to allow clear information transfer. Currently the geopolitical risks of certain environments complicate this (e.g. sudden export restrictions etc.).
Harmonisation and simplification of regulations will massively reduce the burden on companies. Currently, many concepts (for example ‘biodiversity’) are so poorly defined that it is difficult for companies to understand how to address them and for the public to understand the results. Similarly, the creation of a level playing field is an important step to incentivise companies to engage in due diligence in a more meaningful way. A regulatory framework of coordinated policies resulting in all companies having the same requirements would allow companies to be less cautious in their reporting.
The OECD guidelines suggest a pragmatic prioritisation of risks and DD issues for action. Necessarily this results in those that were prioritised getting attention while others may not. Such a situation is exacerbated by the time-lag that lies between new regulations and the ability of companies to react to changes and implement measures as required throughout their supply chains. This requires some understanding from all the stakeholders involved.
We are all struggling with the same issues, so it’s certainly important to collaborate in initiatives…and projects…to improve our outcome on the ground and to enable a more transparent reporting.
Key findings and recommendations
1. Common gaps across sectors
The findings of the DiliCHANCE gap analysis report were validated by a diverse panel of experts with the addition that they would expect similar gaps to be found across other industrial sectors. This suggests that while some companies may be performing better than others, general trends may be more important than individual company performance.
2. Navigating uncertainty through harmonised due diligence tools
The current uncertainty related to forthcoming EU legislation is a challenge for companies and harmonisation and simplification of future requirements would be very welcome. The DiliCHANCE ‘One-stop-shop’ is a digital platform to support companies in carrying out due diligence in mineral supply chains through highlighting best practices, collecting regulations, standards, and tools, and facilitating communication between different actors. Such initiatives are a positive step in helping companies adapt to a changing regulatory environment.
3. Barriers to transparency in risk and remediation reporting
The relative lack of reporting related to risk assessment and remediation measures may result from several different causes that can act in isolation or in concert. These can include, an actual lack of activity, a fear of negative publicity, the risk of reputational damage from over-promising, and the need for confidentiality to allow open discussions with stakeholders.
4. Building trust through collaborative due diligence
Ensuring that the environment surrounding due diligence reporting is positive and supportive will make a significant difference to results. Collaboration and cooperation between companies, and between companies and other stakeholders, will foster improved DD reporting. Such collaboration is based on trust and generating and maintaining that trust remains an important first step.
5. Transparency as protection: Encouraging open reporting
Reporting on due diligence activities is itself a protection for companies against allegations that may arise. By reporting on their risk assessments through preferred communication channels to stakeholders companies build public trust. For companies to embrace reporting in more detail, they need to be convinced that the information published will not be used against them.
The diverse backgrounds of the panel enabled the challenges and opportunities of due diligence reporting in mineral supply chains to be discussed in depth. Companies often have complex, diversified supply chains that interact with many different jurisdictions often with varying legal and reporting requirements. These challenges are magnified by the lack of clarity on regulations at a European level and by ongoing geopolitical uncertainty. All panel members highlighted the need for greater collaboration and cooperation both between businesses and between business and civil society entities. Indeed, the willingness of the panel members to come together to discuss these topics highlights the desire from all sides to improve the DD reporting situation. The development of tools, such as those promoted through the DiliCHANCE project, serve to accelerate this improvement.
Session speakers
- André Martinuzzi, Professor and Head of the Institute for Managing Sustainability, WU Vienna
- Louis Maréchal, Senior Advisor, OECD
- Akash Mokhriwale, Head of Due Diligence – CHESS, Trafigura
- Marie-Theres Kügerl, Raw Material Strategy and Risk Management, BMW Group
- Johanna Sydow, Head of the International Environmental Policy Division, Heinrich-Böll Foundation
- Angelo Spörk, Institute for Managing Sustainability, WU Vienna (Moderator)
About DiliCHANCE
Launched in October 2024 and running for three years, the DiliCHANCE project is funded by the European Commission and brings together experienced partners from business, science, and civil society. The project aims to turn due diligence from a perceived administrative burden into a strategic opportunity for companies, helping them drive positive impact across their supply chains.
Register at www.DiliCHANCE.eu to access the one-stop shop, participate in webinars, and contribute to the co-design of upcoming content.
Ben Ellis
World Resources Forum