So much information, so little time. Can you believe that when I was writing my masters thesis on business and human rights, I read everything that existed at the time on the topic? That would be impossible today. That was in 2004, and now, 16 years on, the field has not just burgeoned, it has exploded.

This library is intended to help save you some time by providing summaries of relevant information, as well as links to valuable resources on business, people and planet.

Feel free to use any of this in your internal trainings, but I urge you to tailor the resources to your own business (i.e. to consider what staff need to know in light of what you do as a company) rather than provide generic human rights-related information. General human rights trainings may be interesting, but won’t lead to the behaviour change you are looking for.

The contents of this list is necessarily influenced by the people and companies I work with and the specific examples and resources I find helpful in my work. It is not intended to be an exhaustive or exclusive list as there are many helpful resources out there. To get further information on the vast array of resources that exist now in this field, take a look at the Business and Human Rights Resource Centre. You can search by topic, company or country. If you haven’t already, definitely subscribe to their weekly update, which you can do here.

Please note that this page is in the process of being compiled.

The foundations

What is expected of business?

The UN Guiding Principles on Business and Human Rights (2011)

  • The UN Guiding Principles on Business and Human Rights (the UNGPs) establish the corporate responsibility to respect human rights.
  • They were developed over the course of a six-year mandate starting in 2005 by John Ruggie, the UN Secretary-General’s Special Representative for Business and Human Rights.
  • The UNGPs were endorsed by the UN Human Rights Council in 2011, an event which is described by The Economist as a “watershed event” for business.
  • The UNGPs represent “the global authoritative standard, providing a blueprint for the steps all states and businesses should take to uphold human rights.” Rather than creating new international law obligations, the UNGPs elaborate the implications of existing standards and practices for states and businesses.

The UNGPs are founded on three pillars:

  1. The State duty to protect human rights against abuse by third parties, including business, through appropriate policies, legislation, regulations and adjudication
  2. The corporate responsibility to respect human rights
  3. The need for greater access to effective remedy, both judicial and non-judicial, for those how human rights have been adversely impacted by business

The responsibility to respect means that companies are asked to

  1. avoid infringing on the human rights of people and
  2. address adverse human rights impacts with which they are involved. Addressing adverse human rights impacts requires taking adequate measures for their prevention, mitigation and, where appropriate, remediation

“The responsibility to respect human rights requires that business enterprises: (a) avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur; and (b) seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.”

UN Guiding Principle 13, UN Guiding Principles on Business and Human Rights

A few definitions:

  • “activities” includes both actions and omissions
  • “business relationships” includes relationships with business partners, entities in its value chain, and any other non-State or State entity directly linked to its business operations, products or services

Companies are expected to meet their responsibility to respect human rights by adopting relevant policies and processes. They are asked to:

  • Publicly commit to the responsibility to respect human rights through a statement of policy
  • Reflect their statement of policy in operational policies and procedures necessary to embed the commitment throughout the company
  • Implement human rights due diligence to enable them to identify, prevent, mitigate and account for how they address their adverse human rights impacts, with a strong emphasis on engaging with potentially impacted stakeholders in the process
  • Provide for or cooperate in remediation through legitimate processes of adverse impacts they may have caused or contributed to

“The Guiding Principles’ normative contribution lies not in the creation of new international law obligations but in elaborating the implications of existing standards and practices for States and businesses; integrating them within a single, logically coherent and comprehensive template; and identifying where the current regime falls short and how it should be improved.”

John Ruggie, Special Representative of the Secretary General on the issue of human rights and transnational corporations and other business enterprises, Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework (2011)

Other helpful resources:

Source: Mike Baab, Danish Institute for Human Rights, Video: The UN Guiding Principles on Business and Human Rights: An Introduction (2015)

What do we mean by human rights?

“The idea of human rights is as simple as it is powerful: that people have a right to be treated with dignity. Human rights are inherent in all human beings, whatever their nationality, place of residence, sex, national or ethnic origin, colour, religion, language, or any other status. Every individual is entitled to enjoy human rights without discrimination. These rights are all interrelated, interdependent and indivisible.”

The Office of the United Nations High Commissioner for Human Rights (OHCHR), The Corporate Responsibility to Respect Human Rights: An Interpretive Guide (2011)

International human rights law lays down obligations on States to promote and protect the human rights and fundamental freedoms of individuals or groups.

The ‘internationally recognised human rights’ which companies are asked to respect are those contained in the (1) International Bill of Human Rights and (2) principles concerning fundamental rights set out in the International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work.

The International Bill of Human Rights consists of:

The ILO’s Declaration on Fundamental Principles and Rights at Work commits all its member States to four categories of principles and rights (which are covered by eight core ILO conventions):

  • Freedom of association and the right to collective bargaining
  • The elimination of compulsory labour
  • The abolition of child labour and
  • The elimination of discrimination in respect of employment and occupation

Additional international standards may be relevant for companies, depending on what the company does. The UN recognizes that persons belonging to some groups/ populations may need particular accommodation/ protection in order to fully enjoy human rights without discrimination. Additional standards that may be relevant include:

  • The International Convention on the Elimination of All Forms of Racial Discrimination
  • The Convention on the Elimination of All Forms of Discrimination against Women
  • The Convention on the Rights of the Child
  • The International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families
  • The Convention on the Rights of Persons with Disabilities
  • The Declaration on the Rights of Persons Belonging to National or Ethnic, Religious and Linguistic Minorities
  • The United Nations Declaration on the Rights of Indigenous Peoples (which addresses both the human rights of indigenous individuals and the collective rights of indigenous peoples)
  • International humanitarian law (which applies in situations of armed conflict and exposes companies and their managers to the risk of criminal or civil liability if they breach international humanitarian law)

For short books describing what is contained in each human right, you can read:

For the scholars in you, this classic was updated in 2013:

What is a list of internationally recognised human rights?

The following captures a list of internationally recognised human rights (as defined above). Other human rights may also be relevant to company operations.

Civil and political rights

  • Right of self-determination
  • Principle of non-discrimination
  • Right to life
  • Right not to be subjected to torture, cruel, inhuman and/or degrading treatment or punishment
  • Right not to be subjected to slavery, servitude or forced labour
  • Rights to liberty and security of person
  • Right of detained persons to humane treatment
  • Right not to be subjected to imprisonment for inability to fulfil a contract
  • Right to freedom of movement
  • Right of aliens to due process when facing expulsion
  • Right to a fair trial
  • Right to be free from retroactive criminal law
  • Right to recognition as a person before the law
  • Right to privacy
  • Rights to freedom of thought, conscience and religion
  • Rights to freedom of opinion and expression
  • Rights to freedom from war propaganda, and freedom from incitement to racial, religious or national hatred
  • Right to freedom of assembly
  • Right to freedom of association
  • Rights of protection of the family and the right to marry
  • Rights of protection for the child
  • Right to participate in public life
  • Right to equality before the law, equal protection of the law, and rights of non-discrimination
  • Rights of minorities

Economic, social and cultural rights

  • Right of self-determination
  • Principle of non-discrimination
  • Right to work
  • Right to enjoy just and favourable conditions of work
  • Right to form trade unions and join a trade union and the right to strike
  • Right to social security, including social insurance
  • Right to a family life
  • Right to an adequate standard of living
  • Right to health
  • Right to education
  • Rights to take part in cultural life and to benefit from scientific progress

ILO labour rights

  • Freedom of association and the right to collective bargaining
  • The elimination of compulsory labour
  • The abolition of child labour
  • The elimination of discrimination in respect of employment and occupation

Don’t human rights concern governments, not business?

  • Yes, States have the primary obligation, under international human rights law, to promote and protect the human rights and fundamental freedoms of individuals or groups.
  • The UNGPs recognise this by dedicating its first pillar (out of three) to the State duty to protect human rights against abuse by third parties, including business, through appropriate policies, legislation, regulations and adjudication.
  • However, the companies’ responsibility to respect human rights “exists independently of States’ abilities and/or willingness to fulfil their own human rights obligations, and does not diminish those obligations.” (Commentary to UNGP 11)
  • In other words, companies are subject to a responsibility to respect human rights throughout their operations, regardless of whether States are meeting their own duty to protect human rights.
  • In practice, where a State is not meeting its own duty, this makes it more challenging for companies to do so. This would be the case where laws contradict or are less protective than international standards.
  • Examples include where the State does not actively enforce its labour laws or where the State takes a repressive position to freedom of expression.

Companies already comply with law – how is this different?

  • A number of laws that companies are subject to relate to human rights. These include labour laws, health and safety laws, consumer protection and environmental laws. Complying with these laws will support a company’s ability to respect human rights.
  • At the same time, companies are now expected to take an additional step, beyond blanket legal compliance. The responsibility to respect “exists over and above compliance with national laws and regulations protecting human rights.” (Commentary to UNGP 11)
  • This means that the expectation to respect human rights exists under soft law, regardless of whether national law provides for it. This also means that companies are expected to undertake an assessment of whether legal compliance supports or hinders their ability to respect human rights.
  • Legal compliance may hinder human rights respect where national laws fall below international standards, or conflict with them. Consider the example of a national law permits children to work below the age of 14, in contravention to ILO standards, or of a law that penalizes people for their sexual preferences, in contravention to human rights standards.
  • The official wording from the UNGPs, that a number of companies have now integrated into their human rights policies, is that companies should (1) “[c]omply with all applicable laws and respect internationally recognized human rights, wherever they operate” and (2) “[s]eek ways to honour the principles of internationally recognized human rights when faced with conflicting requirements.” (UNGP 23)
  • We see examples of this where companies work with governments to strengthen their national laws, or vocally protest against laws that they view as inconsistent with international standards
  • Finally, the UNGPs recognise that there will be some situations where companies could be viewed as complicit in gross human rights abuses committed by other actors. In this case, companies “should treat this risk as a legal compliance issue, given the expanding web of potential corporate legal liability arising from extraterritorial civil claims, and from the incorporation of the provisions of the Rome Statute of the International Criminal Court in jurisdictions that provide for corporate criminal responsibility.” (Commentary UNGP 23)

How can companies impact human rights?

Companies can play a role in promoting human rights through their activities. For instance, a company manufacturing life-saving products can positively impact the right to life. A company offering working opportunities with decent working conditions and professional development opportunities can positively impact the right to enjoy just and favourable conditions of work and the right to work. A company paying decent income while sourcing from rural neglected communities can support their right to an adequate standard of living.

When we speak about respecting human rights, this means focusing first and foremost on the areas where the company can infringe upon human rights – whether consciously or inadvertently. We talk about ‘adverse impacts on human rights’ to capture this.

The following resources provide a number of examples of how companies can adversely impact people’s human rights. Because the responsibility to respect human rights extends to looking into practices of higher-risk business partners (the ‘full value chain approach’), the examples also include human rights impacts that occur at the level of the company’s business partners:

Source: UK Equality and Human Rights Commission, Video: Human rights and business (2015)

The larger the company, the greater the responsibility?

No, the responsibility applies to all companies.

“The responsibility to respect human rights is a global standard of expected conduct for all business enterprises wherever they operate” (Commentary to UNGP 11). The responsibility applies to all companies “regardless of their size, sector, operational context, ownership and structure.”

UN Guiding Principle 14

At the same time, some companies will need to put more robust policies and processes in place than others. This is not dependent on where the company is operating or the size of the company.

Rather, the means through which companies can meet their responsibility to respect human rights depend on the severity of impacts they can be involved with.

We have seen for instance that small companies can be connected to very severe human rights impacts (e.g. because they are sourcing exclusively from a country in conflict where workers are severely abused), or that impacts can occur in countries that are not typically seen as high risk (such as modern slavery in the United Kingdom and the United States).

At the same time, size and context have a role to play:

  • Processes for small and medium-sized enterprise will look different to those put in place by larger companies;
  • Country of operation is used as an input into the determination of likelihood of impact.

Inter-connections

What do the UNGPs have to do with the SDGs?

“Business enterprises may undertake other commitments or activities to support and promote human rights, which may contribute to the enjoyment of rights. But this does not offset a failure to respect human rights throughout their operations.”

Commentary to UNGP 11

The UN’s 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs) provide for the expectation that companies not only respect human rights, but also explore opportunities to make a positive contribution in support of human rights. 

https://sustainabledevelopment.un.org/sdgs

It is clear for the Business and Sustainable Development Commission overseeing companies’ contributions to the SDGs that “[c]ompanies’ single greatest opportunity to contribute to human development lies in advancing respect for the human rights of workers and communities touched by their value chains.”

In other words, respect and promotion are intrinsically connected: it is by focusing on where the company has its greatest risks to people (respect) that it can have the greatest positive impact (positive contribution). A growing number of companies seeking to contribute to the SDGs recognise this.

“[M]y focus today is on the relationship between the Sustainable Development Goals and the UN Guiding Principles on Business and Human Rights. And my message is that for business to fully realize its contribution to sustainable development, it must put efforts to advance respect for human rights at the heart of the people part of sustainable development.”

John Ruggie, Achieving the Sustainable Development Goals Through Business Respect for Human Rights (2016, UN Annual Forum on Business and Human Rights)

“When companies drive respect for human rights across their operations and value chains, they can have a sustained and large-scale positive impact on the lives of the people most desperately in need of development”

Caroline Rees, What Do the UN Sustainable Development Goals Have to Do With Corporate Respect for Human Rights? (Shift Viewpoint, September 2016)

For examples of how companies have sought to tackle negative impacts in ways that maximize positive outcomes for people, in line with the SDGs, see Shift, The Human Rights Opportunity (2018).

For further information on the relationship between the UNGPs and the SDGs, see:

The UNGPs and the UN Global Compact

The United Nations Global Compact (UNGC) is a voluntary initiative. CEOs sign up to changing their business operations so that the UNGC’s ten principles become part of strategy, culture and day-to-day operations. The ten principles relate to human rights, labour, environment and anti-corruption.

Who this applies to:

  • Companies voluntarily choose to sign up to the UNGC. To date, the UNGC has 9,000 companies signed up.
  • This differs from the UNGPs. Because of the UNGPs’ status as soft law endorsed by the UN Human Rights Council, the UNGPs and the responsibility they provide for apply to all companies, wherever they operate. Companies need not publicly acknowledge the UNGPs’ existence, sign up to them or publicly commit to respecting human rights.

What they provide for:

  • The UNGC asks companies to “support and respect the protection of internationally proclaimed human rights” and “make sure that they are not complicit in human rights abuses”. Hence, the UNGC asks companies to both ‘respect’ and ‘support’ human rights.
  • The UNGPs provide content to the ‘respect’ part of the UNGCs. They elaborate on the policies and processes that companies are expected to put in place to meet their responsibility to respect human rights. The UNGPs make clear that ‘respect’ is the baseline, upon which ‘support’ for human rights sits (see the info above related to the SDGs on this point).
  • The UNGC’s ten principles also list specific labour rights companies are asked to respect, and cover environmental and anti-corruption matters.
  • The UNGPs make clear that labour rights are included within human rights. The environment is addressed within the UNGPs insofar as impacts on the environment lead to impacts to people, and corruption is viewed as a factor that increases the likelihood of adverse human rights impacts occurring.

“The UN Guiding Principles on Business and Human Rights provide a practical framework to implement the human rights commitments that companies make as part of becoming participants of the UN Global Compact”.

Lise Kingo, Executive Director, UN Global Compact, Human Rights Translated 2.0: A Business Reference Guide (Castan Centre for Human Rights Law, Monash University, 2017)

The ‘UN Guiding Principles reporting framework’ provides a useful reference to help business understand the practical implications of the corporate responsibility to respect human rights and for Global Compact participant companies to report on progress on the first six principles (covering human and labour rights).

UN Working Group on Business and Human Rights, Report to the UN Human Rights Council

The UNGPs and the OECD Guidelines

The OECD Guidelines for Multinational Enterprises (the Guidelines) are recommendations addressed by governments to multinational enterprises operating in or from OECD countries. They reflect the expectation of governments on business regarding how to act responsibly. The Guidelines cover key areas of business responsibility, including human rights and labour rights, as well as the environment, bribery, consumer interests, information disclosure, science and technology, competition, and taxation.

The Guidelines’ human rights chapter (chapter four) was introduced during the 2011 update and specifically draws on and is aligned with the UNGPs. Therefore, companies use the UNGPs’ policies and processes to respond to the human rights-related expectations in the Guidelines.

Further, the risk-based due diligence approach (further detailed in the guidance supporting companies in the implementation of the Guidelines) draws upon the UNGPs and its definition of human rights due diligence.

“The 2011 OECD Guidelines incorporated two central elements from the GPs. First, it added a dedicated human rights chapter that replicates the GPs formulation of what it means for business to respect human rights, as well as stipulating the systems that companies need to put in place in order to meet their responsibility to respect human rights, centered on human rights due diligence processes. The corporate responsibility to respect human rights encompasses not only companies’ own activities but also their business relationships. Second, the “General Policies” chapter of the Guidelines reiterates the GPs’ formulation of the corporate responsibility to respect human rights, and it establishes a new due diligence requirement for all subjects covered by the Guidelines, except for the taxation provisions for which it was not considered appropriate.”

John Ruggie and Tamryn Nelson, Human Rights and the OECD Guidelines for Multinational Enterprises: Normative Innovations and Implementation Challenges (Corporate Social Responsibility Initiative, Harvard Kennedy School, 2015)

OECD governments establish National Contact Points for Responsible Business Conduct (NCPs) whose mandate is (1) to promote the OECD Guidelines for Multinational Enterprises, and related due diligence guidance, and (2) to handle cases (referred to as “specific instances”) as a non-judicial grievance mechanism. To date, 49 governments have NCPs.

Because of the inter-connection between the UNGPs and the Guidelines, NCPs are essentially looking for whether a company met its responsibility to respect human rights when faced with an instance related to human rights (chapter four). A number of the other chapters are also relevant, for instance those related to disclosure and employment and industrial relations.

For OECD resources, see:

The UNGPs and CSR

Corporate social responsibility (CSR) is commonly understood as companies’ voluntary contributions to improve the lives of employees, the local community and society as a whole.

The UNGPs emerged in part in response to limitations of CSR. These included that:

  • A company could implement a CSR programme, while at the same time harming people in the course of its activities 
  • Company professionals could freely select the focus of CSR programmes, rather than being led by a specified methodology
  • CSR programmes tended to be managed independently from the business and did not to lead to changes to core business functions
  • CSR programmes did not typically provide seek to capture remedy for harm suffered

The UNGPs place a focus on responsibility for impacts on people, as opposed to voluntary contributions to people. The policies and processes a company puts in place to meet its responsibility to respect human rights under the UNGPs are intended to be core to business and are expected by soft law (and increasingly hard law).

This being said, a growing number of companies are adapting their CSR programming so that it plays a role in supporting them to address their human rights risks. An example of this would be where an apparel company provides training to empower women, and adapts this training so that it is oriented to its supply chain workers and enables them to speak up in their places of work.

In addition, some definitions of CSR have evolved to come closer to the UNGPs. For instance, in 2011, the European Commission revised the definition of CSR so that it was closer to the UNGPs. The EC deleted the previous reference to ‘voluntary’ action and defined CSR as “the responsibility of enterprises for their impacts on society”.

Corporate Social Responsibility (CSR) and Business and Human Rights (BHR) are like two close cousins—they are intertwined concepts focused on companies engaging in responsible and socially beneficial activities—but both concepts have key differences and hence distinct identities based on their origins. They are in essence two different but overlapping discourses.

Anita Ramasastry, Corporate Social Responsibility Versus Business and Human Rights: Bridging the Gap Between Responsibility and Accountability, Journal of Human Rights, Vol. 14, No. 2, pp. 237-59 (2015)

A changing world for business

Business and human rights laws

General

Changes to contracts

The growth in business and human rights-related laws is leading to changes in contracts between companies. These new contractual provisions tend to request that business partners conduct human rights due diligence and report certain instances of human rights impacts (e.g. modern slavery, child labour) to the other contracting party. Some of them also enable the contracting party to terminate the contract if a human rights issue is found.

As the number of laws increase, so too will contractual obligations on companies to conduct human rights due diligence – irrespective of whether they are technically required to do so under law

The following provides examples of how laws are leading to certain kinds of contractual provisions:

  • The 2015 amendment to the U.S. Federal Acquisitions Regulations is leading government contractors to request that their subcontractors certify that they have made efforts to ensure their supply chains are free from forced labor and human trafficking, failing which the procurement contract may be terminated
  • The 2015 revision (the Trade Facilitation and Trade Enforcement act of 2015) to the U.S. Tariff Act of 1930 is leading companies importing into the U.S. to request that business parties producing goods for them conduct human rights due diligence to ensure that forced or child labour do not take place. Where this due diligence does not take place, and a withhold release order is issued by the Commissioner of U.S. Customs and Border Protection (CBP) preventing goods from being imported in the U.S., the contract may specify how the costs related to the detainment of shipments would be shared amongst the parties
  • The 2015 UK Modern Slavery Act is leading companies to request that companies they buy from conduct human rights due diligence, with a specific focus on modern slavery. Some contractual provisions request that all instances of modern slavery be reported to the buyer, enable the buyer to conduct unannounced audits to verify compliance with this provision, and provide the right of termination where modern slavery is identified. Some even request that business partners compile their own modern slavery statements

Investors

Purpose of the corporation and stakeholder capitalism

BlackRock, the world’s largest asset manager with $7.4 trillion in assets under management as of end-Q4 2019, has played an important role in shifting the discussion toward stakeholder capitalism. (Emphasis to certain sentences has been added below.)

BlackRock, Larry Fink’s 2018 Letter to CEOs, A Sense of Purpose (January 2018)

“Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”

“The time has come for a new model of shareholder engagement – one that strengthens and deepens communication between shareholders and the companies that they own. I have written before that companies have been too focused on quarterly results; similarly, shareholder engagement has been too focused on annual meetings and proxy votes. If engagement is to be meaningful and productive – if we collectively are going to focus on benefitting shareholders instead of wasting time and money in proxy fights – then engagement needs to be a year-round conversation about improving long-term value.”

“I want to reiterate our request, outlined in past letters, that you publicly articulate your company’s strategic framework for long-term value creation and explicitly affirm that it has been reviewed by your board of directors. … To sustain that [financial] performance, however, you must also understand the societal impact of your business as well as the ways that broad, structural trends – from slow wage growth to rising automation to climate change – affect your potential for growth.”

“Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment? Are we working to create a diverse workforce? Are we adapting to technological change? Are we providing the retraining and opportunities that our employees and our business will need to adjust to an increasingly automated world? Are we using behavioral finance and other tools to prepare workers for retirement, so that they invest in a way that will help them achieve their goals?”

“As we enter 2018, BlackRock is eager to participate in discussions about long-term value creation and work to build a better framework for serving all your stakeholders. Today, our clients – who are your company’s owners – are asking you to demonstrate the leadership and clarity that will drive not only their own investment returns, but also the prosperity and security of their fellow citizens.”

BlackRock, Larry Fink’s 2019 Letter to CEOs, Profit & Purpose (January 2019)

“I wrote last year that every company needs a framework to navigate this difficult landscape, and that it must begin with a clear embodiment of your company’s purpose in your business model and corporate strategy. Purpose is not a mere tagline or marketing campaign; it is a company’s fundamental reason for being – what it does every day to create value for its stakeholders. Purpose is not the sole pursuit of profits but the animating force for achieving them.”

“Profits are in no way inconsistent with purpose – in fact, profits and purpose are inextricably linked. Profits are essential if a company is to effectively serve all of its stakeholders over time – not only shareholders, but also employees, customers, and communities. Similarly, when a company truly understands and expresses its purpose, it functions with the focus and strategic discipline that drive long-term profitability.”

“One thing, however, is certain: the world needs your leadership. As divisions continue to deepen, companies must demonstrate their commitment to the countries, regions, and communities where they operate, particularly on issues central to the world’s future prosperity. Companies cannot solve every issue of public importance, but there are many – from retirement to infrastructure to preparing workers for the jobs of the future – that cannot be solved without corporate leadership.”

“Companies that fulfill their purpose and responsibilities to stakeholders reap rewards over the long-term. Companies that ignore them stumble and fail. This dynamic is becoming increasingly apparent as the public holds companies to more exacting standards. And it will continue to accelerate as millennials – who today represent 35 percent of the workforce – express new expectations of the companies they work for, buy from, and invest in.”

“In the years to come, the sentiments of [younger] generations will drive not only their decisions as employees but also as investors, with the world undergoing the largest transfer of wealth in history: $24 trillion from baby boomers to millennials. As wealth shifts and investing preferences change, environmental, social, and governance issues will be increasingly material to corporate valuations.”

“BlackRock’s Investment Stewardship engagement priorities for 2019 are: governance, including your company’s approach to board diversity; corporate strategy and capital allocation; compensation that promotes long-termism; environmental risks and opportunities; and human capital management. These priorities reflect our commitment to engaging around issues that influence a company’s prospects not over the next quarter, but over the long horizons that our clients are planning for.”

BlackRock, Larry Fink’s 2020 Letter to CEOs, A Fundamental Reshaping of Finance (January 2020)

“Climate change has become a defining factor in companies’ long-term prospects. Last September, when millions of people took to the streets to demand action on climate change, many of them emphasized the significant and lasting impact that it will have on economic growth and prosperity – a risk that markets to date have been slower to reflect. But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.”

“The evidence on climate risk is compelling investors to reassess core assumptions about modern finance. Research from a wide range of organizations – including the UN’s Intergovernmental Panel on Climate Change, the BlackRock Investment Institute, and many others, including new studies from McKinsey on the socioeconomic implications of physical climate risk – is deepening our understanding of how climate risk will impact both our physical world and the global system that finances economic growth.”

“As a fiduciary, our responsibility is to help clients navigate this transition. Our investment conviction is that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors. And with the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward.”

“We believe that all investors, along with regulators, insurers, and the public, need a clearer picture of how companies are managing sustainability-related questions. This data should extend beyond climate to questions around how each company serves its full set of stakeholders, such as the diversity of its workforce, the sustainability of its supply chain, or how well it protects its customers’ data. Each company’s prospects for growth are inextricable from its ability to operate sustainably and serve its full set of stakeholders.”

“By contrast, a strong sense of purpose and a commitment to stakeholders helps a company connect more deeply to its customers and adjust to the changing demands of society. Ultimately, purpose is the engine of long-term profitability.”

“Given the groundwork we have already laid engaging on disclosure, and the growing investment risks surrounding sustainability, we will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related disclosures and the business practices and plans underlying them.”

“In the discussions BlackRock has with clients around the world, more and more of them are looking to reallocate their capital into sustainable strategies. If ten percent of global investors do so – or even five percent – we will witness massive capital shifts. And this dynamic will accelerate as the next generation takes the helm of government and business. Young people have been at the forefront of calling on institutions – including BlackRock – to address the new challenges associated with climate change. They are asking more of companies and of governments, in both transparency and in action. And as trillions of dollars shift to millennials over the next few decades, as they become CEOs and CIOs, as they become the policymakers and heads of state, they will further reshape the world’s approach to sustainability.”

“Companies must be deliberate and committed to embracing purpose and serving all stakeholders – your shareholders, customers, employees, and the communities where you operate. In doing so, your company will enjoy greater long-term prosperity, as will investors, workers, and society as a whole.”

US Business Roundtable, Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans (August 2019) and Statement on the Purpose of a Corporation (August 2019)

In August 2019, 181 CEOs embraced stakeholder capitalism, as part of the US Business Roundtable – an organisation that brings together CEOs of a number of America’s largest companies. The CEOs explicitly moved away from shareholder primacy, and commited to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders.

Specifically, the CEOs state that “[i]t has become clear that … language on corporate purpose [conveying that corporations exist principally to serve their shareholders] does not accurately describe the ways in which we and our fellow CEOs endeavor every day to create value for all our stakeholders, whose long-term interests are inseparable. … While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders.”

In particular, the CEOs commit to delivering value to their customers, investing in their employees, dealing fairly and ethically with their suppliers, supporting the communities in which they work, and generating long-term value for shareholders. When it comes to the support to communities, the CEOs specifically commit to “respect[ing] the people in our communities and protect[ing] the environment by embracing sustainable practices across [their] businesses.”

The British Academy, Future of the Corporation; see also The British Academy, Reforming business for the 21st century: a framework for the future of the corporation (2018) and The British Academy, Principles for Purposeful Business (2019)

The United Kingdom’s national academy for the humanities and the social sciences, the British Academy, has found the need for businesses to operate with “purpose, trustworthiness and enabling cultures”, and provides ‘principles for purposeful business’ to guide business leaders

World Economic Forum (WEF), Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution (2020); see also Klaus Schwab, Why we need the ‘Davos Manifesto’ for a better kind of capitalism (December 2019, WEF)

In 2020, the Davos Manifesto 2020 (released alongside the 2020 World Economic Forum – WEF), states that the “purpose of a company is to engage all its stakeholders in shared and sustained value creation.” Embracing the needs of all stakeholders includes treating “people with dignity and respect”, “integrat[ing] respect for human rights into the entire supply chain” and “act[ing] as a steward of the environmental and material universe for future generations.”

Frank Bold, Purpose of the Corporation videos, including What is the Purpose of the Corporation (October 2016)
Section 172 of the UK Companies Act 2006

This UK law requests that company directors have regard to a range of matters in promoting the success of the company for the benefit of its shareholders, including the interests of the company’s employees; the need to foster the company’s business relationships with suppliers, customers and others; and the impact of the company’s operations on the community and the environment.

A rights-respecting business culture

Policy commitments

UN Guiding Principle 16 and its commentary, UN Guiding Principles on Business and Human Rights (2011)

In short, this guiding principle provides that companies are expected to express their commitment to meet their responsibility to respect human rights through a statement of policy. The term ‘statement’ refers to whatever means the company employs to set out publicly its responsibilities, commitments, and expectations.

This policy statement should:

  • express the company’s commitment to respect internationally recognised human rights
  • stipulate the company’s human rights expectations of personnel, business partners and other parties directly linked to its operations, products or services
  • be informed by relevant internal and/or external expertise. (The level of expertise required varies according to the complexity of the company’s operations)
  • be approved at the most senior level of the company
  • be publicly available
  • be communicated internally to all personnel (in a way that makes clear what the lines and systems of accountability will be)
  • be communicated externally to entities with which the company has contractual relationships as well as others directly linked to its operations and other relevant parties. (In the case of operations with significant human rights risks, this includes communication to potentially affected stakeholders)

This policy statement should form the basis for embedding the responsibility to respect human rights from the top of the company through all its functions.

This embedding entails:

  • Reflecting the policy in operational policies and procedures necessary to embed it
  • Providing necessary training for personnel in relevant business functions
  • Striving for coherence between the human rights statement and policies and procedures that govern wider business activities and relationship (e.g. policies and procedures that set financial and other performance incentives for personnel; procurement practices; and lobbying activities where human rights are at stake)
Anna Triponel, Human rights policy commitments – is it possible to develop a ‘bad’ statement? (February 2020)

In this article, I delve into the following questions:

  • What is a human rights policy commitment, and why would a company develop one?
  • How can a human rights policy commitment be bad, and why?
  • What should I be looking for in a ‘good’ human rights policy?

The article includes the following diagrams:

To conclude, take a look at your company’s human rights policy statement and ask yourself: what does this statement tell me about my company’s understanding of human rights?

An increasing number of external stakeholders (investors, business partners, civil society, consumers) can tell the difference between a perfect policy, and one that is lived up to in practice. At the end of the day, this is about creating a culture where – when push comes to shove – people come first. So, where do you land? Are you reading a ‘good’ or a ‘bad’ policy?

Anna Triponel, Human rights policy commitments – is it possible to develop a ‘bad’ statement? (February 2020)
UN Guiding Principles Reporting Framework, Part A1: Policy Commitment (2015)

The UN Guiding Principles Reporting Framework (UNGPRF) provides a set of questions companies can ask themselves when it comes to assessing the strength of their human rights policies and processes, which can in turn feed into their public communications. For each question, the UNGPRF provides guidance on what the company might have in place, or may wish to consider putting in place, to be able to respond to the question.

The questions related to the human rights policy statement are as follows:

Shift, The Global Compact Network Netherlands and Oxfam, Doing business with respect for human rights, Chapter 3.1 – Policy commitment: setting the tone (2016)

This guide provides detail on the following guidance points:

  • Involving senior management in the the process of developing the policy statement
  • Evaluating existing commitments and policies
  • Identifying the company’s salient human rights issues
  • Involving internal and external stakeholders in the process
  • Developing the language of the statement
  • Obtaining top-level approval for the statement
  • Communicating the policy to relevant staff and external business partners and stakeholders
Corporate Human Rights Benchmark, CHRB Core UNGP Indicator Assessment: For companies in all sector (April 2019)

This methodology provides information to companies on what the Corporate Human Rights Benchmark (CHRB) will be looking for when ranking companies. In its theme A focused on governance and policy commitments, the CHRB is looking for a:

  • Commitment to respect human rights
  • Commitment to respect the human rights of workers
  • Commitment to engage with stakeholders
  • Commitment to remedy

Although framed for researchers evaluating companies selected for the CHRB ranking, this tool can help companies that are not being ranked also understand that good practice would look like.

UN Global Compact, A Guide for Business: How to Develop a Human Rights Policy (November 2015)

This guidance covers the following:

  • What is a human rights policy?
  • Why develop a human rights policy?
  • Key steps – the process behind the policy
  • What are the key components of a human rights policy?
Business & Human Rights Resource Centre, Company policy statements on human rights

This webpage provides links to company human rights policy statements.

Policy embedding

UN Guiding Principle 16 and its commentary, UN Guiding Principles on Business and Human Rights (2011)

The embedding components of a policy are referenced above in the policy commitment section (since embedding is integral to a policy).

UN Guiding Principles Reporting Framework, Part A2: Embedding Respect for Human Rights (2015)

The questions related to embedding the human rights policy statement are as follows:

Shift, The Global Compact Network Netherlands and Oxfam, Doing business with respect for human rights, Chapter 3.2 – Embedding: getting it into the company’s DNA (2016)

This guide provides detail on the following guidance points:

  • Assigning responsibility for human rights
  • Designing a process of change management in which leadership from the top – including the board – is essential
  • Considering the company’s commitment in recruitment
  • Talking honestly about human rights
  • Training key staff
  • Developing incentives and disincentives
  • Developing capacity to solve dilemmas and respond to unforeseen circumstances

Embedding is about creating the right ‘macro-level’ environment for a policy to be effective in practice. It includes training, performance and accountability structures, tone at the top from senior management and the board, and a sense of shared responsibility for meeting the company’s human rights commitments.

Shift, The Global Compact Network Netherlands and Oxfam, Doing business with respect for human rights, Chapter 3.2 – Embedding: getting it into the company’s DNA (2016)
Valuing Respect by Shift, Leadership & Governance Indicators of a Rights-Respecting Culture (Beta version, November 2019)

This resource lists four features of corporate culture that are especially critical to embedding respect for human rights in a company:

  • The Authenticity of Commitment: the organization acts in a manner consistent with its publicly asserted commitment, including when faced with inevitable tensions between respect for human rights and other business goals.
  • Responsibility and accountability: respect for human rights is embraced as the responsibility of people in every part of the business, and key staff are empowered and motivated to embed respect for human rights across the company.
  • Respect and empathy: everyone in the organization is motivated to know and care about whether and how it might be involved with harm to the human rights of people, including to remote individuals and communities.
  • Organizational Learning: the organization seeks out and embraces new insights about human rights risks and makes an effort to learn from its mistakes as well as successes.

The resource further provides draft indicators (currently being tested) for how companies and their stakeholders can help evaluate a company’s progress towards building a rights-respecting culture.

“It is often said that ‘culture eats strategy for breakfast’. And we regularly hear that the ‘tone at the top’ of companies has a central role in defining day-to-day actions and behaviors in the workplace. But when investors, regulators and other stakeholders want to judge if a company is well constituted to achieve responsible conduct, the focus tends to be solely on whether formal governance structures are in place. This ignores one of the most important functions of company leadership and governance: to go beyond setting out what people in an organization are supposed to do, and to look at what actually happens. In other words, to focus on the role of leaders in shaping organizational culture.”

Valuing Respect by Shift, Leadership, Governance, & Culture
Corporate Human Rights Benchmark, CHRB Core UNGP Indicator Assessment: For companies in all sector (April 2019)

In its Theme B – Embedding Respect and Human Rights Due Diligence (indicator B.1.1), the CHRB methodology looks in particular at whether the company outlines senior level responsibility for human rights within the company as well as the organisation of the day-to-day responsibility for human rights across relevant internal functions.

Rick Relinger, Embedding the Corporate Responsibility to Respect Human Rights within Company Culture (Shift Commissioned Research Report Series, May 2014)

This study identifies four common gaps in progress towards embedding respect for human rights in corporate culture:

  1. Abstract language used to frame human rights: If human rights issues are not described in a manner that is consistent with their national and professional background, people fail to appreciate the scope of applicable human rights and the scale of individuals and communities that can be affected by their work. Consequently, corporate-level commitments will not be incorporated into operational practices.
  2. Excessive “happy talk”: Without explicit guidance, training, or incentives to consider the connection between business practices and human rights, internal happy talk fosters a culture of complacency regarding human rights risks.
  3. Delegating ownership of impacts to those who can’t fix them directly: When this responsibility is delegated almost entirely to specialists, the effectiveness of human rights due diligence processes depends on their ability to convince business functions to modify their conduct. Yet, they often lack the necessary seniority and influence internally to do so.
  4. Toothless cross-functional committees: without the participation of business units, such committees lack the influence, credibility, and expertise needed to change operational-level conduct.

The study concludes with five steps companies can take to strengthen the embedding of their human rights policy commitment:

  1. Consistently communicate human rights in accessible terms.
  2. “Seeing is believing”: expose relevant personnel to the realities of the company’s impact on human rights, and its management of those impacts.
  3. Tailor guidance on human rights risk management for specific functions, to make human rights risk management more tangible and actionable on a day-to-day basis.
  4. Develop leading human rights indicators: Leading indicators focus peoples’ attention on the consequences of their own decisions and practices.
  5. Create broad-based performance evaluation criteria for exercising due diligence: Peoples’ sense of professional responsibility is reinforced by explicit incentive and accountability measures.

Other relevant resources include:

Human rights due diligence

Overview

UN Guiding Principle 17 and its commentary, UN Guiding Principles on Business and Human Rights (2011)

Meaning:

  • Companies carry out human rights due diligence (HRDD) to identify, prevent, mitigate and account for how they address their adverse human rights impacts. (Human rights risks are the company’s potential adverse human rights impacts. Potential impacts should be addressed through prevention or mitigation, while actual impacts – those that have already occurred – should be a subject for remediation)
  • HRDD entails (1) assessing actual and potential human rights impacts, (2) integrating and acting upon the findings, (3) tracking responses, and (4) communicating how impacts are addressed – in a way that seeks to capture the concerns of potentially affected stakeholders by engaging with them directly

Scope:

  • It is expected that HRDD cover adverse human rights impacts that the company may cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships
  • HRDD varies in complexity with the size of the company, the risk of severe human rights impacts, and the nature and context of its operations

Prioritisation:

  • Companies are expected to identify general areas where the risk of adverse human rights impacts is most significant, whether due to certain suppliers’ or clients’ operating context, the particular operations, products or services involved, or other relevant considerations, and prioritize these for human rights due diligence

Timing:

  • HRDD should be ongoing, recognizing that the human rights risks may change over time as the business enterprise’s operations and operating context evolve.
  • HRDD should be initiated as early as possible in the development of a new activity or relationship, given that human rights risks can be increased or mitigated already at the stage of structuring contracts or other agreements, and may be inherited through mergers or acquisitions

Connection with enterprise-risk management:

  • Human rights due diligence can be included within broader enterprise risk-management systems, provided that it goes beyond simply identifying and managing material risks to the company itself, to include risks to rights-holders

Assessing impacts

UN Guiding Principle 18 and its commentary, UN Guiding Principles on Business and Human Rights (2011)