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Background

The UN Guiding Principles on Business and Human Rights (UNGPs) foreground responsible business conduct and establish HRDD as the core mechanism to identify, prevent, and mitigate adverse human-rights impacts. Policy tools such as National Action Plans on Business and Human Rights (NAPs) create a level playing field and provide a coordinated pathway for implementation. For Japanese firms, aligning with international expectations is increasingly urgent, as Japan’s HRDD Guidelines signal a higher standard of corporate accountability. Since the UNGPs’ endorsement in 2011, governments have pursued NAPs and enforcement of HRDD, with Japan’s 2020 NAP slated for amendment by the end of 2025. As G7 chair in 2023, Japan advanced discussions on sustainable, UNGP-aligned, and responsible supply chains, reinforcing commitments across ministries and the private sector.

Japan has played a critical role in promoting the agenda in the Asia-Pacific and beyond. Given the importance of enhancing the economic ties between the emerging economic countries, namely India, Brazil and ASEAN, advancing responsible business through Japan’s relevant policies on trade will provide further opportunities with Japanese companies and supply chains. In particular, Free and Open India Pacific (FOIP), a policy aimed at establishing resilient supply chains based on common values such as human rights and the rule of law, would ensure bringing mutual and sustainable benefits to the people and society. It is expected that fair and equal relationships, which include human rights protection, can effectively prevent, mitigate, and remediate any adverse impacts on human rights, thereby achieving more trustworthy supply chains.   

HRDD requires companies to identify, prevent, and mitigate human rights risks and impacts on individuals, creating a ‘level playing field’ that rewards responsible behavior and discourages non-compliance—an effect that policy measures like NAPs are well placed to reinforce. Beyond ethical reasons, responsible practices are strategic: they support the 2030 Agenda and help firms navigate a global regulatory environment that is tightening around human rights and environmental standards. With persistent SDG gaps and rising expectations from governments, investors, and consumers, peer-led learning and cross-border exchange become especially valuable. In this context, advancing non-financial disclosure—notably through frameworks such as TISFD—can sharpen the link between HRDD outputs and market signals. Transparent disclosure improves the credibility of risk identification and remediation efforts, helps investors assess long-term value creation, and incentivizes continuous improvement across supply chains.

As emphasized in the draft of the revised Japan’s NAP, non-financial disclosure plays a pivotal role in connecting HRDD with financial markets and corporate governance. By documenting risk assessments, mitigation measures, remediation commitments, and governance oversight, firms provide a comprehensive view of how human rights considerations are embedded in strategy and operations. When integrated with financial disclosures, such as TISFD, non-financial reporting becomes more decision-useful for investors, lenders, and rating agencies[1]. It would enable a holistic assessment of an organization’s resilience, governance quality, and long-term viability, linking ethical responsibility to financial performance. Robust non-financial disclosure fosters accountability, enhances stakeholder trust, and reduces information asymmetries that can lead to mispricing of risks to people.

Adopting responsible practices is both ethical and strategic, aligning with the 2030 Agenda and maintaining competitiveness amid increased regulation. Given SDG gaps and rising HRDD expectations from governments, policymakers, and consumers, peer-led examples aid receptivity. Japanese and global businesses have strong incentives to implement HRDD through expanded networks and peer learning. In this regard, advancing transparent non-financial disclosure can drive more responsible and sustainable business activities by enhancing the clarity and reliability of corporate reporting and aligning HRDD outputs with financial-market expectations. The emphasis on disclosure also helps illuminate supply chain risks for investors, lending institutions, and other stakeholders, creating incentives for early remediation and continuous improvement across sectors as the UNGPs expect.

The project, Promoting Responsible Business Conduct in target countries where Japanese companies operate, with a particular focus on promoting human rights due diligence in global supply chains and leveraging the UN Guiding Principles on Business and Human Rights, in four countries in addition to Japan, focuses on promoting human rights due diligence in global supply chains and leveraging the UNGPs. Twin objectives are to build HRDD capacities across the supply chains of Japanese companies and to support the adoption of responsible business policies such as NAPs. Through cross-border collaboration, the project seeks to share lessons learned, align policy instruments, and stimulate peer learning among corporate actors, government agencies, and civil society. By connecting NAPs with practical HRDD implementation in diverse markets, the initiative aims to create resilient, ethical, and globally competitive Japanese value chains.