Why Human Rights Are Important for Business

Governments have the primary responsibility for human rights. However, individuals and organizations also have important roles to play in supporting and respecting human rights. The business community has a responsibility to respect human rights, that is, not to infringe human rights. Operating context, company activities and relationships can pose risks that the company might negatively impact human rights, but they also present opportunities to support or promote the enjoyment of human rights while also advancing one‘s business.

Promoting the rule of law

Societies where human rights are respected are more stable and provide a better environment for business. Businesses whether operating outside their country of origin or at home may have the opportunity to promote and help raise standards in countries where protection of human rights issues is insufficient, especially in ways that are strategically relevant to its core business.

Addressing consumer concerns

Access to global information means that consumers are increasingly aware of where their goods come from and the conditions under which they are made.

Value chain management

Global sourcing and distribution means that companies need to be aware of potential human rights issues both upstream and downstream.

Increasing worker productivity and retention

Workers who are treated with dignity and given fair and just remuneration for their work are more likely to be productive and remain loyal to an employer. New recruits increasingly consider the social, environmental and governance record of companies when making their choice of employer.

Building good community relationships

Companies that operate on a global basis are visible to a large audience world-wide as a result of advances in communications technologies. Addressing human rights issues positively can bring rewards at site level, within local communities, as well as in the broader global commons in which companies operate.

Respecting Human Rights

Respect for human rights is part of Principle 1 of the United Nations Global Compact. In 2008, the UN Human Rights Council adopted the UN Protect, Respect, Remedy Framework, the second pillar of which is that business everywhere has the responsibility to respect human rights. To respect rights essentially means not to infringe on the rights of others — put in other words — to refrain from having a negative impact on the enjoyment of human rights. For information regarding the SRSG’s framework and how it is relevant to the UN Global Compact please visit the SRSG on Business and Human Rights webpage.

Business has the potential to impact — positively and negatively — virtually all human rights. Accordingly, business should consider their potential impact on all rights. However, some actual or potential impacts will require special consideration, for example, where the actual or potential impacts are very serious and/or there is a strong connection between the company and the abuse.

For the content of human rights, at a minimum, companies should look to the International Bill of Human Rights and the core International Labour Organization (ILO) Conventions. The publication Human Rights Translated elaborates the main internationally proclaimed human rights from a business perspective and offers practical examples of how companies have infringed on human rights and, as a result, ended up in trouble, as well as examples of how businesses have supported the enjoyment of the rights. Although some rights will be more relevant than others in particular circumstances, situations change, so broader periodic reassessment is necessary.

Business must ensure that its operations are consistent with the legal principles applicable in the country of operation. If national law falls short of international standards, companies should strive to meet international standards and not infringe on human rights. In the rare situation that national law directly conflicts with international standards, companies are not expected to violate national laws. Instead, there may be other ways to support the spirit of international human rights standards.

Importantly, the corporate responsibility to respect exists independently of States’ human rights duties. Among other things, this means that businesses have a responsibility to respect human rights whether they are operating in an area of weak governance or in a more stable context. In areas where there is weak governance, the risks of infringing human rights may be greater because of the context. For information on how to use conflict sensitive business practices in such contexts, see Guidance on Responsible Business in Conflict-Affected & High-Risk Areas: A Resource for Companies & Investors.

Because the responsibility to respect is a baseline expectation, a company cannot compensate for infringing human rights in one aspect of their business by performing good deeds elsewhere, such as through philanthropic acts, supporting human rights in other areas or by good performance on other issues, such as the environment.

Determining the scope of responsibility

Companies should consider three sets of factors in determining the scope of their responsibility to respect human rights or, in other words, the risk of potential negative impacts on human rights in connection with the conduct of their business.

1. The first is to consider the country and local context in which it is operating for any human rights challenges that context might pose. Information about these is available from NGOs, Government, international trade unions and international organizations. There are also services that seek to bring such context specific risks together in formats more easily digested for business, for example, Danish Institute Country Risk assessments and Maplecroft Maps of Human Rights risks. These and other guidance material can be accessed from our human rights guidance webpage. Pay particular attention to the context in countries where laws are widely known to fall short of international standards and where enforcement may be inadequate.
2. The second set of factors involves considering actual or potential human rights impacts the business’ own activities may have within that context — for example, in their capacity as producers, service providers, employers and neighbours. Companies should determine which policies and practices might infringe human rights and adjust those actions to prevent the infringement from occurring. An illustrative list of activities with direct impact might include the production process itself; the products or services the company provides; labour and employment practices; the provision of security for personnel and assets; and the company’s lobbying or other political activities.
3. The third set of factors is an analysis of the company’s relationships with Government, business partners, suppliers and other non-State actors to consider whether they might pose a risk for the company in terms of implicating it in human rights abuse. Look particularly at the provision or contracting of goods, services and even non-business activities, such as lending equipment or vehicles. Consider the track records of those entities your company deals with to assess whether the company might contribute to or be associated with abuse caused by those entities.

Due diligence

In order to ensure and demonstrate (i.e. to know and show) that a company is meeting its responsibility to respect human rights it should undertake due diligence. Human rights due diligence is the ongoing process taken to identify, prevent and mitigate negative human rights impacts. By undertaking due diligence, companies not only ensure compliance with national laws but also manage the risk of infringing human rights with a view to identifying, preventing and mitigating it. Tools and guidance materials are very helpful in this process. Comparable processes are typically already embedded in companies to assess and manage financial and related risks.

The poster A Human Rights Management Framework — available in all six official UN languages at the UN Global Compact's tools and guidance page — shows the elements of a comprehensive management approach to human rights. Particularly important elements are:

1. A statement of policy (integrated or stand alone): Companies should adopt a statement of policy as a public commitment to fulfill their responsibility to respect human rights, approved by their board or equivalent. It can be a stand-alone statement or integrated into a broader corporate sustainability policy or code of conduct. Broad inspirational language may be used to describe respect for human rights, but more detailed guidance in specific functional areas is necessary to give those commitments practical meaning. The policy should give meaningful guidance to those within the organization and those significantly linked to the organization. Developing a human rights policy can be an important opportunity for stakeholder engagement on the topic of human rights, which can be almost as important as the policy that results from the process. Sample human rights policies can be found at http://www.business-humanrights.org/Documents/Policies.
2. Assessing human rights impacts: Many corporate human rights issues arise because companies do not consider the potential implications of their activities and relationships within their operating context. Companies should take proactive steps to understand how existing and proposed activities may affect human rights. The scale of the review will depend on the industry, company size and national and local context and should be commensurate with the level of risk. Based on the information uncovered, companies should refine their plans to address and avoid potential negative human rights impacts on an ongoing basis.
3. Integration of human rights policies throughout a company: The integration of human rights policies throughout a company may be the biggest challenge in respecting human rights. If awareness of human rights issues and their importance is not fully integrated within the company’s management practices, inconsistent or contradictory actions can result. For example, product developers may not consider human rights implications; sales or procurement teams may not know the risks of entering into relationships with certain parties; and company lobbying may contradict commitments to human rights. Leadership from the top is essential to embed respect for human rights throughout a company, as is training to ensure consistency, as well as having the capacity to respond appropriately when unforeseen situations arise.
4. Tracking and reporting performance: Monitoring and auditing processes permit a company to track ongoing developments. The procedures may vary across sectors and even among company departments, but regular reviews of human rights impact and performance are crucial. Tracking generates information needed to create appropriate incentives and disincentives for employees, ensure continuous improvement and to make necessary adjustments in priorities and approaches. Confidential means to report non-compliance, such as hotlines, can also provide useful feedback. Reporting is a driver for change, externally as well as internally: It shapes stakeholders’ perceptions of a company and helps to build trust; and it is increasingly acknowledged that reporting also acts as a stimulus for internal development with a positive impact on business decisions and outcomes. Global Compact participants are required to communicate their progress (COP) on an annual basis.

Another key element of due diligence is having in place effective company-level grievance mechanisms so that employees, contractors, local communities and others can raise their concerns and have them be considered. This can help companies to identify risks of negative impacts and avoid escalation of disputes. 

Supporting Human Rights

In practice, respect and support for human rights are often closely interlinked in terms of the management steps that are taken to enable and ensure respect and support for human rights. For example, corporate policies on human rights often make positive commitments to support human rights, especially rights that may be strategically relevant to their business. Analyses of context, activities and relationships are likely to yield opportunities to promote human rights as well as possible risks of infringing rights. And companies often include in their reports information about the positive contribution they are making to human rights.

Supporting human rights involves making a positive contribution to human rights, to promote or advance human rights. Socially responsible organizations will typically have a broader capability and often desire to support the promotion of human rights within their sphere of influence especially in ways that link strategically to their core business activities. The business case for supporting human rights can be as strong as the business case for respecting human rights. Likewise, stakeholder expectations often extend to the belief that organizations can and should make a positive contribution to the realization of human rights where they are in a position to do so.

There are at least four ways business can support or promote human rights:

• Through their core business activities in support of UN goals and issues
• Strategic social investment and philanthropy
• Advocacy and public policy engagement
• Partnership and collective action.

These are elaborated in the Blueprint for Corporate Sustainability Leadership, which was adopted by the Global Compact participants at the Leaders Summit in June 2010. It makes clear that to be a corporate leaders on sustainability, business must not just avoid negative impacts, along with all other actors, but also make a positive contribution to society and do its part especially in ways relevant to its business in helping to overcome the most acute and chronic challenges.

Some examples of how companies are supporting and respecting human rights through their daily activities

• In the workplace:
  
  • by providing safe and healthy working conditions,
  • by guaranteeing freedom of association,
  • by ensuring non-discrimination in personnel practices,
  • by ensuring that they do not use directly or indirectly forced labour or child labour,
  • by providing access to basic health, education and housing for the workers and their families, if these are not provided elsewhere,
  • by having an affirmative action programme to hire victims of domestic violence, and
  • by making reasonable accommodations for all employees' religious observance and practices.
• In the community:
  
  • by preventing the forcible displacement of individuals, groups or communities,
  • by working to protect the economic livelihood of local communities,
  • by contributing to the public debate. Companies interact with all levels of government in the countries where they operate. They therefore have the right and responsibility to express their views on matters that affect their operations, employees, customers and the communities of which they are a part,
  • through differential pricing or small product packages create new markets that also enable the poor to gain access to goods and services that they otherwise could not afford.
  • by fostering opportunities for girls to be educated to empower them and also helps a company to have a broader and more skilled pool of workers in the future, and
  • perhaps most importantly, a successful business which provides decent work, produces quality goods or services that improve lives, especially for the poor or other vulnerable groups, is an important contribution to sustainable development, including human rights.
• If companies use security services to protect their operations, they must ensure that existing international guidelines and standards for the use of force are respected.

Addressing Human Rights

The topic of human rights can sometimes be challenging for a company to talk about with its managers and employees and/or those outside the company. However, promoting understanding about what human rights are, their relevance to business and what, in practical terms, business can do to address human rights issues can help to make action to respect human rights easier.

Some businesses find that looking at opportunities to support human rights as well as the risks of infringing human rights helps to motivate managers and staff to address risks too. Another approach some businesses find helpful is to start by looking at what the business is already doing to respect and support human rights, such as by having good human resources policies and practices, implementing policies on non discrimination and promoting diversity in the workforce, respecting the privacy of customers and workers, undertaking efforts to make essential products more accessible to the poor and implementing effective occupational health and safety policies and practices. This helps to demystify human rights by showing that respecting human rights does not require starting from the very beginning. Nor does it need a whole new management system. Human rights can be integrated into existing business processes and procedures. Some companies find it helpful to look for the right entry point and language to discuss risks and opportunities with managers and staff. Sometimes it might be easier to begin the discussion by talking about familiar concepts like respect, dignity, fairness and equality, and specific scenarios with which managers and employees may be confronted.