Anna Triponel | 30 June 2021
Today, I had the pleasure of sharing a panel with Stephanie Venuti (OECD) and Thomas Voland (Clifford Chance), convened by Catie Shavin from the Global Business Initiative on Human Rights (GBI) as part of GBI’s ‘Business, human rights and the climate crisis’ conference.
We had a much-needed discussion and a great turnout – over 60 – and all conference videos will posted online. In the meantime, I’m sharing some of my reflections while they are fresh in my mind. (To stay up to date with this rapidly evolving area, you can sign up to weekly updates here).
Bringing environmental and human rights due diligence methodologies together
Some of you will have seen by now the leaked IPCC report reported by AFP. This is the update to their 2014 report that is due to come out next year. It’s the most dire report on the climate crisis yet, and the UN’s top climate scientists are essentially questioning our own survival as humanity – because of the pace in which we are speeding ahead toward irreversible tipping points.
So, scientists note that the only way out of this is through a transformation of society – and business – in the next ten years. This business transformation – rather than tinkering at the edges – has also been stated by CEOs as part of WBCSD-coordinated Vision 2050.
So, my point here is that we are talking about something bigger than environmental and human rights due diligence methodologies coming together. We are talking about equipping companies to perform holistic sustainability due diligence – where they can see the interlinkages between their environmental and human rights impacts resulting from their business model – which in turn will equip them for their own financial sustainability.
The whole will be greater than the sum of its parts – so to speak.
Growing risks – and opportunities – for companies
I think companies are all focused on this law – because of course, it’s important. But that’s missing the picture that this law is part of this broader transformation of business that society now expects.
Look at how the Dutch court recently applied the UN Guiding Principles to Royal Dutch Shell’s greenhouse gas emissions in its scope 3 relationships. Look at the new proposed definition of ecocide (i.e., mass environmental destruction) which – if approved by the International Criminal Court – would apply to company leaders and government officials – who could be hauled in front of the court. Look at the discussions at the UN, about a new right to a healthy and sustainable environment, which in turn would cascade down into national legislation. Look at the recent Norwegian law, that in essence gives a new freedom of information to citizens over companies’ human rights due diligence. These are all parts of the pieces of this broader movement we are seeing.
But of course, considering human rights and the environment also brings significant opportunity for business: they can be ahead of the transformation of business that we will increasingly see, they can guarantee access to raw materials, tap into consumers and loyalty of workers. Companies can be ahead of the curve here, while others catch up.
Examples of the types of approaches we’re seeing of companies ‘de-siloing’ their human rights and environmental/ climate programmes
After launching my ‘Business, People and Planet’ project a year and a half ago, I’ve had dozens of conversations with environmental and human rights practitioners on what it would take to bring these due diligence processes closer together, and I’m road-testing some approaches with leading companies right now.
What’s clear is that companies are not currently set up to address these risks holistically. There are separate pillars within strategies. There are separate budgets, KPIs, teams and accountability structures. Paradoxically, these structures have been set up like this to enable these risks to be managed effectively, but through that process, the due diligence processes have become siloed.
But we have been seeing over the last year, leading companies road testing some interesting approaches. I’ll flag 3 approaches here.
First, consider how structures can enable cross-functional conversations. We speak a lot in the business and human rights space about cross-functional committees: conversations that take place between sustainability, sourcing, human resources, legal, compliance etc. How can we have structures in place that enable this to happen across environmental and human rights – so that we explore inter-linkages in real-time when it matters (for instance when entering a new project)?
Second, consider how targets can be revised to reflect both people and planet aspects. Nestle’s example of dilemmas which it published online a few weeks ago is on point: we can reach our deforestation target, but this would mean removing smallholder farmers from our supply chain. So isn’t a better approach to have targets that consider both deforestation and people? We can give the example of renewable energy: KPIs could cover both the percentage of energy covered by renewable, as well as the number of conversations had with energy providers on the risks of community displacement linked to renewable energy. Or recycled plastic, where targets also integrate consideration of child labour that can happen when we resort to waste pickers.
Third, start with a pilot approach to see it in practice. If you can see the human rights and environmental connections, if you can ‘touch’ them, it will be easier to bring them together at scale later. Companies can start out with a pilot approach focused on one context, and then identify from here opportunities and blockages that would help them further embed a holistic approach into the company.
One key tip here I will share: let’s recognise that there is valid nervousness around bringing these areas together. There is nervousness that the environmental space will be taken over by human rights. That anything that does not have an impact on human rights may be discounted in some way. That the climate agenda will become politicised by bringing human rights into it. It’s important to recognise this, and address it head on.
The way I’ve unlocked this is by helping teams look ahead to ten years’ time – not today or next year. This helps environmental and human rights teams pivot their approach and work together toward a joint objective, rather than feeling protective of their respective areas.
Parting words for companies
Salient human rights issues are salient for a reason: they are challenging to tackle – and often cannot be ’solved’ by one company alone. We also see that a number of business models themselves run counter to the Paris Agreement expectations. So, these issues are not easy to tackle. And no one is expecting you to ‘fix’ all these issues. But the expectation is to lean in, and play a role.
Show up, and be part of the conversation today regarding business transformation.
This includes building leverage with your peers over the more challenging issues, especially where regulation may be needed to set a level playing field. In this area, in fact more than any other, companies have a critical role to play in supporting policy makers and regulators in the transformation needed. Companies can show us what is possible, and how, and inspire others to follow.
At the end of the day, we are all in this together. This is a significant opportunity for all of us here today: we are the only ones who will be able, in our lifetimes, to play a role that will have such tremendous repercussions on our children, their grand-children and so on. We need to be open about the challenges we face, so that we can in turn advance together.