Business human rights in 2026 – the bar continues to rise

2026 state of play 9 min read

The business human rights landscape has shifted noticeably over the last 12 months. While reporting on human rights issues has tightened in places, a reaction to heightened regulator and civil society scrutiny, behind the scenes the risks (and opportunities) posed by business human rights management have not diminished.

Failure to address human rights issues early can give rise to litigation and regulatory scrutiny, non-judicial complaints, activist and shareholder campaigns, as well as to reputational harm and consequent impacts on a company's social license to operate. On the flipside, an effective and coordinated human rights program can improve relationships with investors, business partners, employees and communities, and allow for the early detection and management of risks. An effective human rights program also allows companies to harness the power of private capital to effect positive change.

For Australian companies, several drivers are pushing forward board, legal and sustainability team focus on business human rights matters. This includes: domestic law reform, as the Australian Government moves towards legislating for mandatory human rights due diligence and related enforcement; similar legislative and regulatory developments across Asia and New Zealand; and continued scrutiny from civil society and other stakeholders. Complaints to the Australian OECD National Contact Point remain steady, with a particular emphasis on the quality of human rights due diligence. We are also seeing early signs of novel litigation, as strategic models developed in the climate change context are adapted to human rights.

This Insight explores how businesses can navigate these challenges in 2026.

Key takeaways

• Delivering on existing commitments remains critical: even if a company decides that 2026 is not the year to announce new business human rights policies, it remains important to continue to meet existing commitments, or risk stakeholder scrutiny.
• Strengthening human rights due diligence requirements: given consultation about potential reform of the Australian Modern Slavery Act 2018 (Cth) is firmly underway, companies should be running the ruler over their human rights programs in anticipation of legislative uplift.
• UN Guiding Principles on Business and Human Rights remain the global benchmark: in refreshing human rights programs, companies should continue to use the UNGPs as the 'north star' for stakeholder expectations. In addition to being the touchpoint for the modern slavery reporting, we continue to see strategic litigation and complaints that rely on the UNGPs as the reference point for assessing corporate conduct.
• Inequality and social-related financial disclosures coming down the line: looking ahead, attention is increasingly turning to the development of global frameworks for inequality and social-related financial disclosures, including the work of the UN-backed Taskforce on Inequality and Social-related Financial Disclosures. While any global framework remains a while away, having a robust human rights program that is tailored to the business will stand companies in good stead for assessing risks and collecting the necessary data once needed.

Business human rights programs: the bar is rising

The UNGPs remain the dominant standard

Fifteen years on from their endorsement by the UN, the UNGPs continue to anchor expectations of corporate human rights practice worldwide. Their influence can be seen in governance structures, policy frameworks and in due diligence and disclosure practices, with many companies explicitly referring to the UNGPs in their human rights commitments, codes of conduct and sustainability reporting. The UNGPs have also played a significant role in shaping domestic legal frameworks. In Australia, this influence is evident in the shape of the proposed reforms to the Modern Slavery Act, which are likely to reflect UNGP-aligned expectations, particularly around mandatory due diligence.

A structured human rights program that aligns with the UNGPs and embeds human rights governance typically includes:

• governance and oversight arrangements, from board and senior executive level down
• policy commitments, such as a human rights policy, code of conduct and whistleblower policy
• human rights risk assessments and ongoing due‑diligence processes
• complaints and grievance mechanisms
• staff training on human rights-related matters that is tailored to the relevant risk exposure and business context, namely training on ethical procurement and modern slavery
• reporting in line with modern slavery and other relevant legislation, such as the Workplace Gender Equality Act 2012 (Cth) which requires employers of more than 500 employees to select and meet (or show they are progressing towards) gender equality targets.

Stakeholders continue to expect companies to uphold and strengthen these fundamentals, with investors, civil society and regulators maintaining pressure for robust human‑rights governance and transparent, credible reporting.

Business human rights programs continue to evolve

While the fundamentals of a solid business human rights compliance program are well established, expectations and approaches to each element of such a program continue to evolve as uptake and understanding of the UNGPs increases and matures; as the risk profile of companies shifts; and as regulators and other stakeholders focus in on different aspects of such programs.

Governance and oversight: increased regulatory scrutiny

Strong governance and oversight are the foundations of any successful and defensible human rights program. This begins at board level, with boards needing to ensure there is clear accountability at senior leadership level for human rights issues, supported by defined responsibilities throughout the organisation. Human rights risks should be integrated into the company’s broader risk frameworks and managed under the same disciplines (such as the three lines of defence model) that apply to other material risks. This focus on governance is particularly important as we have seen an uptick in both regulator and private action tied to the adequacy or otherwise of companies' governance frameworks and processes, and this is likely to spill over into the human rights space.

Policy commitments: refresh to reflect emerging topics like AI

Companies continue to be scrutinised for how their conduct and practices align (or not) to what various relevant voluntary international frameworks and standards require. The ecosystem of voluntary ESG standards and frameworks is extremely relevant to emerging areas for potential human rights impacts, such as corporate AI use. Again, the UNGPs serve as the 'north star' and as a broader framework to the Australian-specific guidance such as the Department of Industry, Science and Resources' 'Guidance for AI Adoption' and Australia's AI Ethics Principles (which were modelled on the OECD's AI Principles). Last month, the OECD released its Due Diligence Guidance for Responsible AI. This means there is now a specific guidance tool for companies on how to assess and address the ESG impacts arising from AI in their operations and supply chains.

We expect that stakeholders, including customers, communities and those in company supply chains, are likely to hold companies increasingly to account for alignment with these international standards in the same way they have done in other ESG areas such as climate change. Failure to align could lead to risks of litigation or non-judicial complaints, such as a complaint to the Australian OECD National Contact Point, eg on the environmental impacts of AI usage or because of a failure to do human rights due diligence on AI deployment in the context of human rights impacts.

HRDD and risk assessments: global tightening and practical expectations

HRDD has become a baseline operational requirement for companies seeking to manage their legal exposure, meet stakeholder expectations and preserve social licence.

A key shift is that HRDD expectations are now being set externally by law, regulators, courts and stakeholders rather than internally by companies. Despite differences in design and stringency across jurisdictions, legislative developments in recent years reflect an overall convergence toward embedding HRDD as a standard component of responsible business conduct.

• The Government recently held consultations on potential reforms to strengthen Australia's modern slavery regime, with many stakeholders calling for the introduction of mandatory HRDD for large Australian companies. The consultation has been seeking feedback on options to move beyond the current reporting-only framework—under which entities are required to describe the actions taken to assess and address modern slavery risks, including any due diligence processes—and towards more substantive due diligence requirements.
• The consultation also invited submissions on matters such as whether to introduce an additional mandatory criterion requiring entities to disclose information about their grievance mechanisms, whether civil penalties ought to be introduced for matters such as failing to submit a modern slavery statement, and a potential new requirement to report on processes and actions taken to remediate identified modern slavery incidents.¹

Human rights due diligence and risk assessments are also evolving beyond traditional subject matter areas to take account of emerging risks—examples include the potential human rights impacts connected with plastics and water, and with the use of AI. Almost every company now encounters AI somewhere within its value chain, whether the company is (a) procuring AI products for its own use; (b) developing AI tools internally; or (c) engaging suppliers who use AI.

Grievance mechanisms: are they still fit for purpose?

Grievance mechanisms provide structured channels for employees, communities, suppliers and other stakeholders to raise concerns – including potential human rights impacts.

Several key trends are shaping how grievance mechanisms are designed, used and governed:

Alignment with UNGPs

There has been a strong movement towards aligning grievance mechanisms and their scope with the guidance provided by the UNGPs. Companies are increasingly assessing grievance mechanisms against the effectiveness criteria that are set out in the UNGPs, with a particular focus on vulnerable users. Some companies have set up user-specific grievance mechanisms such as for Indigenous Peoples or issue-specific mechanisms.

Greater reliance on grievance mechanisms as early-resolution tools

Grievance mechanisms are increasingly being used to address issues at an early stage, with a focus on resolving issues before they escalate into formal complaints, disputes or regulatory intervention.

Data insights are feeding into broader governance

There is a growing appetite to analyse grievance mechanism data to identify systemic issues, policy gaps, cultural 'hot spots' and recurring risks. This reflects a wider movement toward integrating grievance mechanisms into enterprise-wide risk and compliance processes.

Next steps  

For companies operating in Australia and the region, Boards and management teams should be stress‑testing existing human rights programs against likely legislative reform, sharpening due diligence processes and ensuring governance, grievance mechanisms and supplier engagement are fit for closer scrutiny.

Attention to emerging risk areas, particularly AI and evolving supply‑chain impacts, should be built into existing systems rather than addressed in parallel.

Taking these steps now will help organisations meet rising regulatory and stakeholder expectations and reduce the risk of issues escalating into complaints, enforcement action or litigation.