When law bites, budgets bite back: a human rights dilemma
Business Ethics Debates | read time: 6 min
Published: 29 April 2026
Opening remarks
GoodCorporation’s latest House of Lords debate explored how businesses are navigating rising human rights expectations alongside increasing financial pressure, and what this means in practice for those responsible for delivering human rights programmes.
Hosted by Baroness Young, a leading UK campaigner against modern slavery, the debate was opened by Elena López, one of GoodCorporation’s human rights leads, who set out the current regulatory and operational context for businesses.
Elena began by highlighting the growing body of global human rights legislation. This includes developments such as the French Duty of Vigilance Law, the German Supply Chain Due Diligence Act, the Norwegian Transparency Act, the EU Forced Labour Regulation and the EU Corporate Sustainability Due Diligence Directive (CSDDD). In addition, regulatory changes are also in progress elsewhere including Indonesia, South Korea, Thailand, Brazil, Peru, Colombia and Chile. Together, these developments reflect a clear global shift towards legislation that explicitly or implicitly requires human rights due diligence.
Moreover, as regulation continues to evolve, we are already seeing a shift from anticipation to enforcement. Elena highlighted the recent high-profile cases that show the impact of the changing regulatory landscape on the ability to prosecute for human rights failures. For businesses, it is particularly important to note that the misconduct in these cases took place within suppliers and overseas subsidiaries, highlighting that judicial scrutiny is not limited to a company’s own operations and that organisations can be held accountable at home for abuses occurring abroad.
Elena also set out the broader geopolitical and economic context shaping corporate decision-making. This includes growing political and shareholder pushback on environmental and social issues together with increasing anti-ESG sentiment, which frames sustainability as a constraint on economic growth. In some jurisdictions, this has contributed to delays or revisions in regulatory development, as seen with the CSDDD.
At the same time, geopolitical instability, market downturns and wider economic pressures are placing a financial strain on organisations, leading to more difficult budget decisions across all functions, including sustainability and human rights. In many cases, this has resulted in reduced or reallocated resources.
This creates a clear tension: while regulatory expectations and scrutiny of human rights continue to increase, organisational capacity to respond is often constrained. Companies are therefore operating in an environment where both pressure and complexity are increasing, but available resources are tightening.
The debate
Following Elena’s introduction, guests were asked to consider whether human rights should be treated as a standard business issue, subject to available resources, or as a distinct priority requiring additional attention and investment.
The majority of attendees agreed that human rights is more than a standard compliance issue, requiring a specific focus if it is to be addressed effectively. However, although there was consensus on the principle, views diverged as to how this should be implemented in practice.
The impact of legislation
One key thread running through the debate was the importance of legislation in driving action on human rights. Regulation and the prospect of sanctions, fines and broader non-compliance consequences can be a critical lever for securing attention and resources, particularly at board level. It also provides both a common language and a clear framework for action.
However, effective legislation needs consistency and strength. The recent EU Omnibus proposals that amended the Corporate Sustainability Due Diligence Directive (CSDDD) led to a number of companies scaling back their human rights programmes once they were no longer in scope and the risk of enforcement had diminished. This not only disrupted internal momentum for human rights work but also undermined the credibility of some individuals due to the repeated changes to requirements and expectations that had to be conveyed.
The shift in focus caused by the Omnibus highlights the importance of a robust and consistent regulatory framework in driving corporate engagement, showing that where legislation is weakened or uncertain, progress can stall. Legislation was felt to be helpful for smaller organisations with less developed programmes, where the legislative framework can be used to make the case for engagement and provide a structure to follow even if they are not in scope.
It was also agreed that while legislation helps focus attention and secure resources, there is a risk it can lead to human rights being seen as a tick-box compliance issue, with attention focussed on meeting minimum legal requirements, rather than embedding best practice. Human rights teams need to be aware of this risk to ensure their programmes are focussed on identifying, understanding and managing adverse impacts.
Human rights in a business context
Human rights was felt to be evolving as a business concept, not yet fully embedded into operational practice and decision-making.
The ability to articulate material risks to the business, prioritise actions and present credible, manageable solutions that resonate with the wider organisation was seen as essential to ensuring the buy-in needed for programmes that deliver both responsible outcomes and long-term business value.
Transparency
Transparency was also highlighted as a critical factor in effective human rights management. This includes creating an environment where teams feel confident raising concerns and acknowledging when things are not working as intended, without fear of undue criticism.
Participants also referenced the importance of transparency in external relationships, particularly with suppliers and business partners. Being able to share adverse human rights impacts identified openly and work collaboratively to address them was seen as critical to driving meaningful improvement. However, it was noted that companies often feel constrained by the risk of negative media attention, which can discourage openness.
Measurement
Measuring human rights performance in the same way as other areas of sustainability and business activity was also seen as a challenge. Unlike other functions, there are limited agreed targets or KPIs, which makes it harder to evidence progress and impact on people in a consistent or comparable way.
As a result, organisations often struggle to demonstrate meaningful progress. In practice, success is frequently judged by the absence of negative outcomes, such as public exposure or reputational damage, rather than through clear positive indicators of improvement.
This lack of defined measurement can also shape behaviour internally. Without clear benchmarks, KPIs and demonstrable progress, companies may be less willing to commit budgets to human rights programmes.
The resource gap and competing priorities
From the discussion it was clear that human rights teams are operating in an increasingly constrained resource environment. Pressure on budgets, driven by wider economic uncertainty, has led organisations to reassess investment across all functions. In this context, human rights is competing with other priorities such as environmental and net zero commitments.
It was also felt that human rights is not always treated as a distinct area within the broader sustainability agenda. While environmental topics often benefit from clearer targets and external scrutiny, human rights can be absorbed into wider ESG activity, making it harder to secure dedicated focus and resources.
Participants noted that organisations are forced to prioritise where risks are most visible or where expectations are more established. As a result, environmental issues are often prioritised, while human rights, despite the relevance across supply chains, can be deprioritised due to its complexity and the level of cross-functional coordination required.
The GoodCorporation view
It was said that some companies act because they see the light – others because they feel the heat. In practice, both drivers are necessary to achieve meaningful progress. External pressure, including regulation and stakeholder scrutiny, plays an important role in securing attention and resources, while internal recognition of the value of effective human rights management is critical to sustaining long-term action.
For management teams, this means understanding both the risks associated with failing to address human rights impacts and the practical steps that can be taken to mitigate them. Where this is done effectively, human rights programmes can move beyond compliance and contribute to stronger, more resilient business practices.
There is no single model for achieving this. Organisations will need to develop their own narrative, shaped by their risk profile, operating context and stakeholder expectations. However, those that are able to align risk, value and practical delivery are more likely to embed human rights effectively and deliver meaningful outcomes over time. For more information about GoodCorporation’s human rights services, visit our webpage or get in touch to speak to a member of our team.
work with us