The primary objective of the Capstone project was to examine the actual costs incurred and commercial benefits accrued by companies that undertake risk-based due diligence for responsible business conduct.
The client, the Organization for Economic Cooperation and Development (OECD), has made significant progress in the process of defining guidelines for responsible business conduct in various sectors and hopes to use the outcome of the project to build on it.
In the first phase, the Capstone team worked on carrying out a literature review and developing a taxonomy and methodology to help measure the costs and benefits of applying due diligence in alignment with the 5-step framework proposed by the OECD Guidelines. The team then utilized the framework to develop an indicative survey for companies to conduct a cost-benefit analysis on their due diligence practices. The team also developed a survey assessment tool that can be used to analyze the survey results.
Going forward, it is expected that OECD will seek feedback from a small group of companies and test the effectiveness of the proposed methodology. The idea is to ensure that the methodology is robust, and the survey can be utilized to collect data that can be analyzed in a meaningful manner. After that, it is expected that the methodology will be used to build an empirical basis to inform policy decisions and the development of due diligence standards. Such data could help maximize business benefits and minimize unnecessary costs of due diligence. It would likewise be used for outreach and engagement with industry and new markets.