What is due diligence?

SDGs, ESG, social compliance, CSR—sustainability is filled with a variety of terms that can often seem confusing. In this blog, we’ll break down the most important ones and help you understand what they mean for your business.
Back in 1987, The United Nations defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”[1] Most important, sustainability is more than only thinking about the environment. Subjects such as hunger, (in)equality, and education are also part of sustainability. Sustainable development (also referred to as
The Sustainable Development Goals (SDGs) were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030. The 17 goals address the global challenges we face, including those related to poverty, inequality, climate change, environmental degradation, peace and justice.
According to the United Nations, impact implies a change in people’s lives. It is about “effects produced by a development intervention” [2]. Impact can include knowledge, skills, behaviour, health or living conditions and children, adults, families or communities. The effects can for instance be economic, socio-cultural, environmental, technological or of other types [3]. Therefore, impact is related to sustainable development (and thus sustainability).
ESG are three central factors in measuring the sustainability and ethical impact of a company. Responsible investors evaluate companies using ESG criteria as a framework to screen investments or to assess risks in investment decision-making. Factors are for example; waste and pollution, diversity, working conditions, and tax strategies [4].
Social compliance is a way of evaluating, measuring, understanding, and reporting your social and ethical performance [5]. It’s a continuing process, focusing on protection of the rights, health and safety of employees. A social compliance audit allows you to document and maintain oversight of the social practices of your supply chain, including codes of conduct regarding purchasing and following local labor, health, and safety laws.
Corporate citizenship refers to a company’s responsibility towards society. It is expected by the public, all businesses have basic ethical and legal responsibilities. However, most businesses understand the need to go the extra mile, as they establish a strong foundation of corporate citizenship. They create a balance between the needs of shareholders and the needs of the community/environment.
CSR can be seen as a broad concept of Corporate Citizenship. It means that you operate in a way that enriches society, locally and globally. The (European) principle is based on three constructs: economic, legal and ethical responsibility [6]. It can include a broad range of issues, such as human resource management, economic development, fight pandemic diseases and environmental protection [7]. The goal is not to invest in every initiative possible, but to make changes in your organisation and community. CSR is important for the community, but it is equally valuable for a company.
It’s not a requirement, but there are several ways to show your Corporate Social Responsibility. For example with a donation to a chosen cause in response to every consumer purchase made [8] (Cause-related marketing), such as the Pampers 1 pack = 1 vaccine campaign. Another way is to focus on improving public health, safety, the environment or the community by supporting a behaviour change campaign (Corporate Social Marketing), such as the “Ben er weer” campaign by the Dutch phone company Ben. This campaign creates awareness for the fact that sometimes we’re so focused on our phone that we forget about our kids.
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