Navigating expectations on Human Rights, part 2 of 2

by Hanna Roberts, CEO at GES

Abridged from an article published in Ethical Boardroom on 18 August 2017

 

In our previous blog, we introduced the requirements relating to the UN Guiding Principles on Business and Human Rights. In this blog we will, in short introduce some of the recent tools that can be of aid when assessing where any company stands in terms of human rights related issues.

There is a wide variety of ways in which companies communicate their efforts to respect human rights – from companies being unwilling to discuss human rights and not disclosing any human rights programmes, to companies proactively disclosing an increasing amount of material on preparedness and performance on various human rights topics. Variations in transparency can depend on many things, such as material risks connected to human rights issues, exposure to responsible investors and other stakeholders, size of the company, national context, company culture as well as risk exposure.

In order to assist companies navigating how to approach and report on complex human rights issues, the UN Guiding Principles Reporting Framework[1] was developed in 2015 by the Human Rights Reporting and Assurance Frameworks Initiative (RAFI). It is backed by an international investor coalition representing over USD 5.3 trillion assets under management and companies in a number of sectors and countries are already using the framework for public reporting. It is useful for companies, as well as investors and active owners, as it provides a common set of questions to ask and respond to. As an investor advisor, we find it useful to frame dialogues around human rights policy, due diligence (or human rights impact assessments) and disclosure based on the reporting framework. According to a report by SHIFT[2], an NGO whose mission it is to put the UN Guiding Principles into practice and who assisted Professor Ruggie in developing the UN Guiding Principles, the majority of the 74 companies they assessed in 2017, disclose human rights due diligence on a high abstract level, making it difficult to understand how processes are implemented in practice and whether they are effective or not.

In order to back the public reporting, SHIFT, in 2016, created the online UNGP Reporting Database[3], to support the awareness and sharing of information regarding human rights reporting. The database does not rank or rate companies but can help find examples of leading practice that can inspire other companies.

The recently published Corporate Human Rights Benchmark[4] also helps investors understand the performance in the areas of policy, due diligence, remedies, practices, responses and transparency. The benchmark is not only a snapshot in time, but also an opportunity to engage and initiate conversation. In the first Benchmark, three sectors known to have significant impacts on human rights were investigated (Extractives, Apparel and Agricultural products).

Implementing human rights across a company’s activities and business relationships is not an easy task. It takes commitment, resources and time to embed respect for human rights. It is important to be patient when dealing with these issues. It can take more than a year for a company to adopt a policy, and one or two more years to ensure that the policy is effectively executed and then some further time before the company feels confident to report publicly on human rights performance.

As investors, it is important to premier the leaders and use their work as examples of best practice for companies embarking on the journey on human rights.

 

[1] The UN Guiding Principles Reporting Framework. http://www.ungpreporting.org/

[2] “Human Rights Reporting: Are companies telling investors what they need to know?”, SHIFT, May 2017

[3] The UNGP Reporting Database: http://www.ungpreporting.org/reportingdatabase/

[4] Corporate Human Rights Benchmark. https://www.corporatebenchmark.org/

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