European Human Rights Due Diligence Laws and China’s ESG Policies: Regulatory Comparison and Implications for Chinese Companies in Global Supply Chain
(2025) JAMM07 20251Department of Law
Faculty of Law
- Abstract
- This thesis examines how the European Union’s recent development towards binding regulations on Human Rights Due Diligence and Environmental, Social, and Governance (ESG) disclosure, particularly the Corporate Sustainability Due Diligence Directive and Corporate Sustainability Reporting Directive have impact on Chinese companies and China’s regulatory framework. These laws require companies to identify, prevent, and address human rights risks across their value chains.
This research is important because human rights due diligence has became a key legal tool to bridge corporate activity with human rights accountability. The EU’s shifts toward mandatory human rights due diligence regulation exert extraterritorial reach through global supply... (More) - This thesis examines how the European Union’s recent development towards binding regulations on Human Rights Due Diligence and Environmental, Social, and Governance (ESG) disclosure, particularly the Corporate Sustainability Due Diligence Directive and Corporate Sustainability Reporting Directive have impact on Chinese companies and China’s regulatory framework. These laws require companies to identify, prevent, and address human rights risks across their value chains.
This research is important because human rights due diligence has became a key legal tool to bridge corporate activity with human rights accountability. The EU’s shifts toward mandatory human rights due diligence regulation exert extraterritorial reach through global supply chains, meaning that companies outside the EU, such as Chinese companies, will also be affected. Understanding these regulations and their potential impact is essential for assessing legal risks, guiding corporate compliance. Meanwhile, how mandatory human due diligence laws produce extraterritorial effects also depends on how such regulations interact with the legal and regulatory frameworks of third countries. Therefore, it is necessary to examine and compare China’s relevant regulatory system to understand how it is influenced by, or shows a convergence with, or divergence from the EU’s regulations.
Using legal doctrinal and comparative methods, the thesis analyses relevant EU and Chinese regulatory framework, reviews international standards, and discusses the divergent paths taken by China in business and human rights. The findings show that while the EU is moving toward mandatory human rights due diligence and ESG disclosure legal framework, China maintains a development-first, state-led ESG disclosure model with selective engagement in global standards and absence of human rights due diligence. Some Chinese companies’ adaption to EU requirements is still limited. This thesis argues that although Chinese companies are likely to be affected by EU regulations, China’s legal framework is unlikely to develop in the same direction as the EU’s. Nevertheless, this thesis concludes that while the EU and China differ significantly in legal framework and policy priorities, their respective approaches to ESG and supply chain governance are increasingly relevant to each other in the context of global trade. A nuanced understanding of these differences is essential for fostering responsible business conduct and enhancing cooperation across jurisdictions. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9193552
- author
- Huang, Shuting LU
- supervisor
-
- Radu Mares LU
- organization
- course
- JAMM07 20251
- year
- 2025
- type
- H2 - Master's Degree (Two Years)
- subject
- language
- English
- id
- 9193552
- date added to LUP
- 2025-06-13 11:00:34
- date last changed
- 2025-06-13 11:00:34
@misc{9193552,
abstract = {{This thesis examines how the European Union’s recent development towards binding regulations on Human Rights Due Diligence and Environmental, Social, and Governance (ESG) disclosure, particularly the Corporate Sustainability Due Diligence Directive and Corporate Sustainability Reporting Directive have impact on Chinese companies and China’s regulatory framework. These laws require companies to identify, prevent, and address human rights risks across their value chains.
This research is important because human rights due diligence has became a key legal tool to bridge corporate activity with human rights accountability. The EU’s shifts toward mandatory human rights due diligence regulation exert extraterritorial reach through global supply chains, meaning that companies outside the EU, such as Chinese companies, will also be affected. Understanding these regulations and their potential impact is essential for assessing legal risks, guiding corporate compliance. Meanwhile, how mandatory human due diligence laws produce extraterritorial effects also depends on how such regulations interact with the legal and regulatory frameworks of third countries. Therefore, it is necessary to examine and compare China’s relevant regulatory system to understand how it is influenced by, or shows a convergence with, or divergence from the EU’s regulations.
Using legal doctrinal and comparative methods, the thesis analyses relevant EU and Chinese regulatory framework, reviews international standards, and discusses the divergent paths taken by China in business and human rights. The findings show that while the EU is moving toward mandatory human rights due diligence and ESG disclosure legal framework, China maintains a development-first, state-led ESG disclosure model with selective engagement in global standards and absence of human rights due diligence. Some Chinese companies’ adaption to EU requirements is still limited. This thesis argues that although Chinese companies are likely to be affected by EU regulations, China’s legal framework is unlikely to develop in the same direction as the EU’s. Nevertheless, this thesis concludes that while the EU and China differ significantly in legal framework and policy priorities, their respective approaches to ESG and supply chain governance are increasingly relevant to each other in the context of global trade. A nuanced understanding of these differences is essential for fostering responsible business conduct and enhancing cooperation across jurisdictions.}},
author = {{Huang, Shuting}},
language = {{eng}},
note = {{Student Paper}},
title = {{European Human Rights Due Diligence Laws and China’s ESG Policies: Regulatory Comparison and Implications for Chinese Companies in Global Supply Chain}},
year = {{2025}},
}