OECD Guidelines for Multinational Enterprises

The OECD Guidelines for Multinational Enterprises on Responsible Business Conduct were first adopted in 1976 and were substantially updated in June 2023. They are the only government-backed code of conduct for business that comes with a state-supported implementation mechanism. They address enterprises operating in or from adhering countries, yet they are not legally binding on those enterprises – what is binding is the commitment of the adhering governments to promote the Guidelines and to maintain a National Contact Point. The chapters cover general policies, disclosure, human rights, employment and industrial relations, the environment, combating bribery, consumer interests, science and technology, competition and taxation. The 2023 update sharpened expectations in particular on climate and environmental performance – including alignment with the goals of the Paris Agreement – on technology and data, and on the procedures of the Contact Points.

At the heart of the Guidelines lies risk-based due diligence, which the 2018 OECD Due Diligence Guidance for Responsible Business Conduct translates into six steps: embed responsible business conduct in policies and management systems; identify and assess actual and potential adverse impacts; cease, prevent and mitigate those impacts; track implementation and results; communicate how impacts are addressed; and provide for or cooperate in remediation. The decisive lens is not risk to the company but risk to people, the environment and society, with prioritisation driven by the severity and likelihood of the impact. This framework has become the shared methodological basis of virtually every regulatory due diligence regime – from Germany's Supply Chain Due Diligence Act and the EU Deforestation Regulation to the European Corporate Sustainability Due Diligence Directive, whose application timeline has been postponed by the EU Omnibus package and remains politically contested.

For sustainability reporting the Guidelines are a recurring reference point. ESRS 2 requires a due diligence statement, and the social standards ESRS S1 to S4 explicitly ask whether the company's policies are consistent with the OECD Guidelines and the UN Guiding Principles on Business and Human Rights. The minimum safeguards under Article 18 of the EU Taxonomy Regulation are likewise tied directly to the Guidelines. The grievance mechanism is the National Contact Point: in Germany it sits within the federal economics ministry and is supported by an inter-ministerial committee and a working group made up of business, trade unions and civil society. Any person or organisation with a legitimate interest – typically unions or NGOs – can submit a specific instance. The Contact Point first assesses whether the submission merits further examination and publishes that initial assessment, then offers good offices and mediation, and closes the case with a public final statement. It cannot impose sanctions, but the reputational and investor-facing effect of such statements is considerable.