A/HRC/11/13 page 18 Companies have faced similar dilemmas in relation to gender equality, and most recently freedom of expression and the right to privacy in the Internet and telecommunications sectors, where the Global Network Initiative was recently formed to help guide companies.46 69. In sum, while there is now considerably greater shared understanding of many issues regarding the corporate responsibility to respect than there was only a year or two ago, for others further clarification is required and will be pursued in consultations. B. Due diligence 70. A number of issues regarding human rights due diligence have emerged in stakeholder discussions; four are addressed here. Life cycle 71. Due diligence is commonly defined as “diligence reasonably expected from, and ordinarily exercised by, a person who seeks to satisfy a legal requirement or to discharge an obligation”.47 Some have viewed this in strictly transactional terms - what an investor or buyer does to assess a target asset or venture. The Special Representative uses this term in its broader sense: a comprehensive, proactive attempt to uncover human rights risks, actual and potential, over the entire life cycle of a project or business activity, with the aim of avoiding and mitigating those risks. Business role and size 72. The principles of human rights due diligence and its core elements should be internalized by all businesses, regardless of their nature or size. But the specific activities that companies must undertake to discharge this responsibility will vary in ways not yet fully understood. 73. For example, a bank’s human rights due diligence for a project loan will differ in some respects from that of the company operating the project. Nevertheless, banks do have human rights due diligence requirements in this context, and human rights risks related to the projects are also risks to the banks’ liability, returns and reputation. Beyond banks lies an even more complex array of other lenders, investors, and asset managers. Precisely how their respective due diligence differs requires further clarity. 74. Similarly, small- and medium-sized enterprises must consider their human rights impacts. But the scale and complexity of their due diligence can hardly mirror that of large transnational corporations. 75. Supply chains pose their own issues. It is often overlooked that suppliers are also companies, subject to the same responsibility to respect human rights as any other business. The challenge for buyers is to ensure they are not complicit in violations by their suppliers. How far 46 http://www.globalnetworkinitiative.org/. 47 Black’s Law Dictionary, 8th edition (2006).

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