Even though companies are increasingly recognizing their responsibility to respect human rights, many find it hard to see the starting point to integrate respect for human rights within their company. The subject is complex, the number of reports are endless and the issues are overwhelming. So how to transform good intentions into meaningful action?
Let’s start by understanding the history. On International Human Rights Day, we are honoring the date that the Universal Declaration of Human Rights was adopted in 1948. The celebration of Human Rights Day reminds us that human rights are universal and absolute but are still too often ignored in meeting responsible business goals.
It took a long time to understand the responsibility of businesses concerning human rights. Only in 2011 a robust framework was introduced by the adoption of the UN Guiding Principles on Business and Human Rights (also known as UNGPs or Ruggie Framework). This was further reinforced by the inclusion of the UNGPs within the OECD Guidelines. Both guidelines urge business to demonstrate due diligence, which can be defined as ‘the process through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts’. In short: knowing where human rights issues could occur and showing that you are on top of it.
Although the framework exists, companies struggle with the translation of the guidelines into their governance mechanisms, management tools and business approach. Unfortunately, the many reports, guidance and initiatives on the subject of human rights often make it even more complex. Having worked with and within companies, we won’t beat around the bush here; a silver bullet does not exist. Incorporating human rights is a tough process with many small steps:
1. Demystifying responsibility and gaining mandate
An often overlooked, but crucial step is creating support for human rights within the organization. Management is increasingly committed to contributing to global challenges and is eager to make steps, if the suggestions are rational and aligned with their business goals. Make sure that resources are available and that there is commitment on senior and operational level. The fact that the Dutch government is monitoring companies on compliance with the OECD guidelines can help to achieve this.
2. Define ambition
Do you just want to comply with rules and regulations, or is your organization motivated to make an actual change? Be sure to have senior management approve your level of ambition, to ensure support for action. Organize workshops, ensure that management understands what human rights entails and what different levels of ambition it will take in terms of resources and results.
3. Map the chain
Start by identifying your most severe human rights issues based on risk by drawing your value chain. For most companies the biggest human rights risks lie within their supply chain or are linked to the impact of their products. Drawing your supply chain and categorizing human rights risks based on ‘severity’ has proven to be a valuable approach. Severity means classifying them, based on scope (how many individuals are affected?), scale (what is the gravity of the impact?) and irremediability (the ability to restore). You can then further prioritize by leverage. In other words: start with the area that you can influence the most.
4. Define approach per category
Based on your prioritization you can define your actions and approach;
- If your supplier falls within the low risk/low leverage category, having him sign your Code of Conduct is an acceptable approach.
- Medium risk suppliers can be covered by audits/assessments. Even though there is much to say about the effectiveness of audits, they should not be underestimated as a tool to identify issues and set the baseline.
- Suppliers with high risk and leverage can be supported with an engagement or partnership approach. Besides audits, try to implement more tools to gain transparency over your suppliers and the issues that might be at play in that specific business context. This could range from community audits, to gathering worker feedback, to engaging in multi stakeholder initiatives and partnerships. Capacity building with your supplier is key, and termination of collaboration should only be considered as a final resort.
5. Engage and communicate proactively
Be aware that human rights due diligence is very much a journey and an iterative process, which means you are never done. During the process, be sure to engage in meaningful dialogue with your stakeholders and communicate transparent and proactively about your process and progress. Make sure to be aware of the local context and appreciate cultural differences.
In short, meaningful action on human rights requires less talking and more doing. Use what is already there and what you can build upon, making choices on where to start and engage beyond audits. In case you are ready to start implementing respect for human rights in your own company, we can help you. We help to focus on the most important issues and have a practical approach specified to your sector and company, with the UNGPs and the OECD guidelines as a basis. Contact Nathalie or Pieter, both Business and Human Rights Consultants at Sustainalize, to find out more!
Authors: Nathalie Vennik & Pieter van ‘t Hoff.