IN CONVERSATION WITH JONATHAN DRIMMER AND TRAN CHE: Business and Human Rights in the US - A Textured Approach

Federal Policy and Regulation

- The current U.S. administration follows an “America First” agenda that emphasizes, among other things, deregulation and market-based approaches.

- Although there is a deemphasis on certain areas associated with human rights, the federal government continues enforcement in areas like forced labor and human trafficking, which are seen to be in US interests and connected to the America First agenda.

Diverging Federal and State-level Regulations

- Companies must navigate differing federal and state regulations, particularly on areas like climate policy, environmental regulations, and artificial intelligence governance

- State bills are actively being considered in a range of other areas, like supply chain due diligence and climate reporting.

- This divergence increases the complexity of compliance and risk management for businesses operating across multiple jurisdictions.

Diversity, Equity, and Inclusion (DEI)

- The administration is actively opposed to DEI initiatives that may be considered preferential treatment based on protected characteristics, as referenced in recent Executive Orders.

- Companies are adapting in different ways, including by shifting toward more neutral and specific language in DEI communications, and adjusting internal processes and initiatives.

Corporate Strategy and Values

- Multinational companies are responding to regulatory uncertainty by anchoring sustainability strategies in core corporate values rather than short-term compliance, which is a durable approach rooted in internal education and alignment with investor and client expectations.

- Business and human rights efforts are more effective when integrated into operational practices rather than treated as stand-alone initiatives.

- Companies are encouraged to frame human rights and ESG efforts in terms of risk management, resilience, and competitive advantage.

- Stakeholder expectations, particularly from investors and customers, remain consistent regardless of shifting regulatory signals.

- The UN Guiding Principles continue to serve as a foundational framework for identifying and mitigating human rights risks.

- In the absence of strong federal enforcement and in light of active deregulation, litigation—including tort-based, civil, or potentially criminal cases—may increase as a means of seeking corporate accountability for human rights violations.

Closing Remarks

- Companies must remain adaptable, balancing legal uncertainty, reputational risk, and diverse stakeholder expectations.

- Maintaining legitimacy in this evolving landscape requires grounding business and human rights efforts in sound business rationales and identifying ways to align with U.S. and international norms.

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