The OECD sectoral guidance provides concrete and practical advice on responsible business conduct and due diligence in different industries. It focuses especially on how companies can use their influence to ensure responsible supply chains, with particular emphasis on stakeholder engagement.
The guidance has been developed in collaboration with key business actors within each industry.
Finance
The aim of the guidance is to provide a common understanding of institutional investors’ responsibilities and how they can conduct due diligence in a demanding and complex financial sector, thereby helping to create a level playing field.
The guidance was prepared by the OECD Working Party on Responsible Business Conduct and anchored in a reference group with over 50 representatives from government, industry, international organizations, trade unions and academics. The Ministry of Finance and Norges Bank participated in the reference group.
The guidance emphasises that by conducting due diligence, in line with the OECD guidelines, investors will avoid negative impact on people, the environment and society, as well as financial and reputational risks.
OECD guidance for institutional investors (several languages)
Read more on OECD’s page on responsible business conduct in the financial sector
The guidance is an international framework for financial institutions’ work to identify, manage and communicate social and environmental risks related to their clients.
The guidance states that the expectations in the OECD Guidelines for Responsible Business Conduct generally also apply to banks. However, banks’ lending and issuance activities will often have a large number of customers, which are of a different nature than supplier relationships.
The guidance is intended to assist banks and other financial institutions in conducting due diligence in their lending and issuance activities.
The OECD notes that traditionally banks’ management of social and environmental risk has focused on project finance or screening of limited, pre-defined high-risk areas. This guidance enables banks to strengthen and expand their due diligence work across the entire portfolio, in order to better understand and manage risks related to their lending activities.
OECD guidance for corporate lending and underwriting (several languages)
Read more on OECD’s page on responsible business conduct in the financial sector
A common framework for financial institutions, and in particular investment funds for developing countries, on how to conduct due diligence to identify, manage and publicly communicate social and environmental risks associated with project and asset financing.
OECD guidance for project and asset finance
Read more on OECD’s page on responsible business conduct in the financial sector
Agriculture
The aim of the OECD’s guidance for agriculture is that enterprises in the agriculture and food sector contribute to sustainable development in the agricultural sector through responsible business conduct.
What kind of risks is prevalent in the agricultural sector? How can the food sector and importers avoid being involved in forced labour, human rights violations, environmental damage and food insecurity?
The guidance explains how enterprises in agricultural supply chains can contribute to food security, economic growth and poverty reduction. The guidance contains checklists for what kind of risk assessments enterprises are expected to perform, also in their own supply chain.
The guidance contains a model enterprise policy, which outlines the major standards that enterprises should observe to build responsible agricultural supply chains. The policy can be incorporated in contracts with business partners in the supply chain.
The guidance acknowledges the central role of women in agricultural production and recommends special focus on gender in due diligence. In that way enterprises reduce risks of discrimination against women and facilitate their equal access and control over natural resources, inputs, productive tools, advisory and financial services, training, markets and information.
OECD-FAO guidance for responsible agricultural supply chains (several languages)
Read more on OECD’s page on responsible agricultural supply chains
Garments and footwear
The purpose of the guidance is to provide recommendations to companies on how to conduct due diligence in accordance with the OECD Guidelines in their own operations and in their supply chains.
The garment and footwear sector is characterized by a complex and fragmented supply chain with manufacturers spread all over the world. The industry provides employment to millions of unskilled workers, often in countries with low living standards and high inequality. Companies in the industry can contribute to creating growth, jobs and professional development. At the same time, the supply chain in the footwear and textile sector is characterized by exploitation of workers and damage to the environment.
Women make up the majority of the workforce in the supply chain of the sector and are often in a more vulnerable position than men with respect to wages, employment contracts, career advancement, and sexual harassment.
The guidance contains 12 modules covering specific risk areas in the sector, including sexual harassment.
OECD guidance for the garment and footwear sector (several languages)
The OECD has published thematic guidance on several topics, including a handbook on living wages and a report on certification schemes for the textile and footwear industry, among others.
Read more on OECD’s page on responsible supply chains in the garment and footwear sector
NCP Norway has translated the guidance to Norwegian and produced a introductory guide in Norwegian
Extractive sector
The guidance is a tool for identifying and addressing risks of adverse impacts and harm in extractive industry operations through the use of meaningful stakeholder engagement.
Its purpose is to ensure that companies in the extractive sector identify and manage risks of adverse impacts and harm through stakeholder dialogue.
The guidance includes dedicated chapters on consultations with Indigenous Peoples, women, and workers.
The guidance explains that engaging with stakeholders makes good business sense in that it can contribute to:
- attaining a “social license to operate” and facilitating ongoing and future projects in the extractive industry
- early identification of risks in the extraction area
- addressing challenges at an early stage of the project, rather than engaging in a costly process of rebuilding trust after harm has occurred
- avoiding costs related to production stoppages or delays linked to conflict.
Key recommendations to companies:
- Stakeholder engagement must be integrated into project planning and daily operations.
- The dialogue must give affected parties genuine influence over decision-making processes.
- It is more important to involve the groups most impacted by your operations than those who are the loudest.
- Consultations are an ongoing, continuous process.
Special considerations when establishing operations in indigenous territories:
- The OECD guidelines expect companies to conduct consultations with affected groups, including Indigenous Peoples.
- Indigenous Peoples are a vulnerable group. International conventions emphasize the need to protect indigenous cultures and values, including their traditional livelihoods.
- Companies establishing operations in indigenous territories should pay special attention to Indigenous Peoples’ rights to preserve their traditional livelihoods, and indigenous communities should be consulted on matters that affect them.
- Stakeholder engagement should aim to obtain the free, prior, and informed consent (FPIC) of affected parties, even before exploration begins. Agreements and meetings should be documented, and information shared in a language that the parties understand. It should also be agreed how affected parties will have sufficient resources to participate in negotiations, cover costs of participation, and, for example, hire an external facilitator.
- Companies should aim to avoid or minimize negative impacts and develop agreements on how adverse effects can be mitigated, for instance through compensation.
OECD guidance for the extractive sector (several languages)
NCP Norway has translated the guidance to Norwegian og Northern Sami
Conflict minerals
The guidance helps enterprises to ensure responsible purchasing of minerals (gold, tin, tantalum, wolfram) from conflict-affected areas.
Natural mineral resources hold great potential for generating income, growth and prosperity. However, a significant share of these resources is located in conflict-affected and high-risk areas. Mining enterprises may contribute, directly or indirectly, to armed conflict and human rights violations
The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas provides detailed recommendations to assist enterprises in their purchasing procedures to ensure that they respect human rights and avoid conflict. The objective of the guidance is ultimately to promote responsible private sector engagement in post-conflict fragile states.
The OECD Guidelines are non-binding, but can contribute to binding regulations. The EU has incorporated recommendations from the conflict mineral guidance into the EU Conflict Minerals Regulation, which sets out binding due diligence requirements for importers. The guidance is also referenced and used in binding regulations in the United States and part of the legal framework in several African countries, notably the DRC, Burundi and Rwanda.
OECD guidance on conflict minerals (several languages)
OECD monitoring and evaluation framework guidance for conflict minerals
Read more on OECD’s page on responsible mineral supply chains
The OECD aso publishes guidance on a number of topics related to responsible business conduct.
Due diligence is the cornerstone of responsible business conduct.
Read about what due diligence is and how it can be carried out on the page for due diligence guidance.