Step 3 and 4: Integration and Tracking
Identifying human rights risks without acting on them is meaningless. Steps 3 and 4 of the OECD due diligence process translate the findings of the impact assessment into concrete action and then measure whether those actions are working. Together, they represent the operational core of HRDD: where policy commitments meet real-world implementation.
Step 3: Integrating Findings and Taking Action
The OECD DDG's Step 3 requires that enterprises cease, prevent, or mitigate adverse impacts identified in the assessment phase. Critically, the nature of the required action depends on the type of involvement the enterprise has with the impact.
Where the enterprise causes an adverse impact (for example, through its own employment practices, site operations, or direct conduct), it should cease the activity causing the harm and provide remediation to those affected. Where the enterprise contributes to an impact alongside a business partner (for example, purchasing practices that incentivise labour rights violations in a supplier's factory), it should cease its contributing action and use its leverage over the partner to address the harm. Where the enterprise is directly linked to an impact through a business relationship but has not caused or contributed to it, the enterprise should use whatever leverage it has over the responsible party to encourage improvement, recognising that this may sometimes require disengagement if leverage is exhausted.
Integration Across Business Functions
A critical insight from the OECD DDG is that HRDD findings must be embedded across all relevant internal business functions, not siloed in a dedicated sustainability or CSR team. Human rights impacts are often created or exacerbated by decisions made in procurement, finance, operations, legal, marketing, and human resources. Effective integration means:
- Procurement and supply chain: Responsible sourcing policies, supplier selection criteria that include human rights performance, price-setting that allows suppliers to meet standards
- Human resources: Recruitment practices (particularly regarding migrant workers and recruitment fees), working hours management, freedom of association policies
- Legal and compliance: Contracts that include human rights clauses, grievance mechanism design, incident response protocols
- Finance and investment: Ensuring that capital allocation decisions do not prioritise short-term returns at the expense of human rights safeguards
- Operations and project management: Community impact assessment, security arrangements, environmental safeguards that protect community rights
The Concept of Leverage
Leverage is the ability of an enterprise to influence the human rights practices of another entity that is causing or contributing to an adverse impact. It is not a binary condition. Leverage varies based on: the volume of business the enterprise represents to the other party; whether the enterprise is a first-tier or deeper-tier relationship; the enterprise's market position; and contractual rights (audit clauses, termination rights). Enterprises are expected to exercise all available leverage before concluding that they have none. Building leverage proactively - for example, by becoming a strategic customer rather than a spot buyer, or by joining industry coalitions - is itself a component of due diligence.
Developing Action Plans
Translating HRIA findings into action requires time-bound plans with clear ownership. A robust action plan typically includes:
- Specific actions to address each salient issue identified
- Named individuals or functions responsible for each action
- A realistic timeline for implementation
- Resources allocated (budget, personnel, external support)
- Measurable outcomes against which progress will be assessed (connected to Step 4)
- A mechanism for escalating issues that require senior management or board intervention
The OECD DDG recognises that not all identified issues can be addressed immediately. Where a company identifies impacts that it cannot immediately prevent or mitigate (for example, due to deep supply chain complexity or context-specific challenges), it should demonstrate that it is taking meaningful steps in that direction and be transparent about its limitations and plans.
Step 4: Tracking Effectiveness
UNGP Principle 20 requires that business enterprises track the effectiveness of their responses to adverse human rights impacts. Tracking serves three purposes: it determines whether actions are actually working to reduce harm for people; it provides the evidence base for external communication and reporting (Step 5); and it generates institutional learning that improves future due diligence cycles.
The OECD DDG identifies several types of indicators that can be used to track effectiveness:
| Indicator Type | Example | Limitation |
|---|---|---|
| Process indicators | Number of supplier audits completed; number of supplier trainings delivered | Measure activity, not outcomes for people |
| Output indicators | Number of corrective action plans issued; percentage of suppliers meeting code of conduct | Measure immediate results but not longer-term impact |
| Outcome indicators | Reduction in reported cases of excessive overtime; increase in worker satisfaction scores; reduction in grievances filed | More meaningful but harder to attribute causally |
| Impact indicators | Change in living standards of workers; community well-being measures over time | Hardest to measure; require external data and longer timeframes |
Analogy: A Fitness Tracker for Human Rights
Using only process indicators to measure HRDD effectiveness is like measuring your fitness by counting how many times you went to the gym, rather than tracking your resting heart rate, blood pressure, or body composition. Going to the gym is a meaningful activity, but it does not by itself tell you whether your health is improving. Similarly, counting audits completed or training sessions delivered does not tell you whether working conditions for people have actually improved. Effective tracking combines activity data with outcome measures that capture real-world change for affected people.
Engaging Stakeholders in Verification
The OECD DDG explicitly notes that tracking should involve affected stakeholders or their representatives in verifying whether actions have been effective. Workers, community members, and civil society organisations often have insights that internal monitoring systems cannot capture. This can include formal worker voice mechanisms (such as worker committees or trade union feedback), independent third-party monitoring, or structured stakeholder feedback processes integrated into supplier management programmes.
Example: The Accord on Fire and Building Safety in Bangladesh
The Bangladesh Accord (2013), signed by over 200 garment brands following the Rana Plaza disaster, is one of the most rigorous industry-level HRDD integration and tracking mechanisms ever created. It required participating brands to fund building safety inspections, remediation, and worker training at supplier factories. Crucially, it included worker representation from trade unions on its steering committee, independent inspection bodies, and public disclosure of inspection reports and remediation progress. This transparency and worker voice made the Accord's tracking function far more credible than self-reported data. By 2018, over 1,600 factories had been inspected and hundreds of critical safety hazards remediated.
Key Takeaways
- 1Step 3 requires that enterprises cease, prevent, or mitigate adverse impacts, with the specific action depending on whether the enterprise causes, contributes to, or is directly linked to the harm through a business relationship
- 2HRDD findings must be integrated across all relevant business functions (procurement, HR, legal, finance, operations), not siloed in a sustainability team
- 3Leverage - the ability to influence another party's human rights practices - varies and should be exercised proactively; building leverage through strategic purchasing relationships and industry coalitions is itself a component of due diligence
- 4Step 4 tracking should use a combination of process, output, outcome, and impact indicators, with meaningful outcome indicators being more informative than activity counts alone
- 5Engaging affected stakeholders in verifying the effectiveness of actions, such as through worker voice mechanisms or independent third-party monitoring, produces more credible tracking data than internal monitoring alone