Managing human rights impacts is a daunting task for businesses today. Get comfortable with the feeling on inadequacy and uncertainty is my advice coming to the discussion with a quarter of a century professional experience with human rights.
At the core human rights are very simple. Respecting the dignity of everyone. You don’t need a law book to understand what this means. Decent wages and working conditions, no exploitation, no bullying etc. Practices that arise from fairness and kindness. Generally liked and respected characteristics of any individual, right?
Then why does it get so complicated? Geopolitical tensions, cultural sensitivities, political ambitions, power struggles, environmental challenges, individual greed and creed — that is why it gets complicated. Human rights becomes neglectable, negotiable and battle a ground for identities. Fairness and kindness fades away.
What is the role of company boards in all this?
Recently EU has been moving forward with several legislative initiatives in order to require more accountability and transparency regarding sustainability in business. Legalization of ESG translates into compliance and internal controls. In a sense, nothing new to the board function.
Human rights fall into the category of social factors, the ‘S’ in the ESG. Human rights cover such familiar topics as labour rights, child labour, safety and health, diversity and inclusion. But human rights cover a wide variety of other issues as well. Right to take part in political life, freedom of movement, and freedom of expression to name but a few often overlooked rights in the context of business. In addition, some rights like right to privacy has a myriad of practical applications from personal data and correspondence, privacy of home and family relations, and honor and reputation – all can be relevant in business context as well.
Business can affect human rights directly, but they can also contribute to the enjoyment of human rights, negatively or positively, for example though lending practices. Depending on the business sector, operations, and environment different human rights are relevant to each business. Often the effects on different human rights or different stakeholders are also different. Business might contribute positively to the rights of its own employees, but negatively to the rights of the wider community where it operates. Or there may be positive impacts to the right to health through company safety practices and health-care schemes, but negative impacts to the right to privacy due to intrusive surveillance, or if workers have to leave behind their families.
5 steps to take
Company boards should be aware of the company’s most severe human rights risks, and ensure the company:
1. Embeds the responsibility to respect human rights into its culture and practices
2. Identifies and understands its most severe risks to human rights on an ongoing basis
3. Systematically addresses its most severe risks to human rights and provides for remedy when needed
4. Engages with stakeholders to inform its approach to addressing human rights risks
5. Reports on its most severe human rights risks and meets regulatory reporting requirements
By taking these five steps the company meets the corporate responsibility for human rights. By making sure these steps are taken the board meets its responsibility.
But why stop there with only a compliance approach? Companies that operate with a culture of respect for human rights can become brands, partners, investments and employers of choice. Pushing for strategies that respect and promote human rights is a choice for board members.
