What We Should Expect from the UN’s Next Ten Years
By Richard Howitt, Skytop Contributor / September 7th, 2021
Richard’s background celebrates three decades as a strategic thinker who integrates innovation into organizational practice. A 22-year member of the European Parliament Rapporteur on Corporate Social Responsibility, he led the EU’s Non-Financial Reporting Directive. This initiative, recognized as the world’s foremost legislation on Corporate Transparency, brought him to new challenges.
This includes his work as CEO of the International Integrated Reporting Council, the Task Force on Climate-Related Financial Disclosure, Advisor to the UN Global Compact, Member of the European Commission SDG Platform, and the UN Guiding Principles for Business and Human Rights Reporting Framework Eminent Persons’ Group.
Richard is recognized as a Sage Top 100 Global Business Influencer, Thomson Reuters ‘Top 30’ Influencer in Risk, Compliance and Regtech. He is a Member of the B20 International Business Leaders’ Group and its Climate and Resource Efficiency Task Force. He currently serves as Strategic Advisor on Corporate Responsibility and Sustainability, and Senior Associate at the law firm Frank Bold LLC.
There is a danger that ‘business and human rights’ is seen as yet another demand on business, to add to a checklist including environmental sustainability, anti-corruption and business purpose – to which companies of a certain size have to pay at least lip service, but perhaps sometimes do little more.
There are often functions within the business which do a lot more on all these issues, but there remains a nagging doubt of how far this is owned, understood and led in the c-suite or the Board?
The UN Guiding Principles
The UN Guiding Principles on Business and Human Rights (UNGPs) remain the key touchstone for action, developed over a six year period within a United Nations process and have reached their tenth anniversary this year. Their prime author was visionary UN Special Representative, Professor John Ruggie.
I had the privilege of being personally involved throughout this period, in my role at the time on behalf of the European Union. This work remains inspirational to all of us who took part and relates to questions of potential responsibility or complicity in violations of fundamental rights of decency and humanity, which should concern everyone in business.
The achievements of the last ten years are well documented. There is now a single source on how businesses can respect human rights with a common language which companies can understand. Many companies now have human rights policies and specialists. Investors use the UNGPs as a reference in their stewardship duties. Governments have developed national action plans for UNGP implementation and international institutions have incorporated them in their own standard-setting.
The existing UN Working Group on Business and Human Rights has undertaken an extensive stocktaking exercise of all the progress made. However, they are still to publish a roadmap for the next decade of action on business and human rights, due before the end of the year.
This is what will inform business decisions going forward. What will and should be in it?
Looking to the future
Analogous to efforts to combat climate change, businesses will have to become more comfortable in becoming forward-looking in identifying human rights risks – and thus able to be successful in preventing violations.
Already this is necessary for extractive industries, using tools such as scenario planning and trend analysis, as well as action within the communities concerned. This will become routine in all businesses.
The future has to be about the future.
Next, there needs to be a major leap forward in data and analysis of actual human rights outcomes. Research in Europe shows that whilst the majority of larger companies have adopted human rights policies, just 4% report on the outcomes of their efforts to manage salient human rights issues.
Getting the data right
Whilst human interactions must always be the first priority in addressing human rights, there is now sufficient progress in developing and testing social indicators, to enable companies to build these in to their planning, decision-making and reporting.
Without this happening, human rights responses will exist, but may remain marginalised in too many businesses.
Labor issues are already largely recognised in this respect, but expect issues such as the Living Wage, equality (not simply diversity) in the workforce and freedom of association to go beyond Human Resources and move in to finance.
In the next decade, companies will have to become much better too in measuring their impacts on affected communities, on efforts to protect and enhance civic space where they operate and on redressing power imbalances with stakeholder groups.
These are difficult issues but protestations about difficulties in measuring them, betray a lack of will to do so.
The whole movement towards sustainable finance, will also intensify the demand from investors for quantifiable, outcomes-based human rights reporting from companies.
People have rights
Meanwhile, just as stakeholder capitalism has become the vogue, watch out for a switch from the stakeholder to the rightsholder.
The concept that people have a right to wellbeing which is protected from harm by corporations or by any other actor, is commonplace in human rights discourse.
But as companies are still struggling with moving from what a risk to the business to what is the risk to people from their activities, the rightsholder approach may well become the mantle which enables the business perspective to genuinely start to put people first.
Of course, many of those people are in the company’s supply or value chain, where corporate responsibility was fully addressed in the UNGPs from the start and about which, there has already been a huge focus during the past decade. The sectoral ‘due diligence’ guidelines developed in the Organisation for Economic Cooperation and Development have been a leader on this critical question.
In the next decade, expect two significant developments in relation to this.
First, the UNGPs derive from a normative approach, one which is based on expectations for behavior forged through general acceptability; rather than on regulation which requires the behavior and which is subject to legal sanction.
Although I hope this will not lead businesses to move from a proactive to a defensive approach on business and human rights, expect a gradual acceleration in legislation towards mandatory human rights due diligence for companies on their supply chains, building on existing initiatives in California, Australia and Europe.
The recurring question of how far the pillar three ‘access to remedy’ in the UNGPs can finally embrace judicial as well as administrative mechanisms, may also come in whether such legislative initiatives encompass the ability for victims to bring civil liability claims.
This is a sensitive question for business, but may finally to bring to an end longstanding debates about extraterritorial jurisdiction, where parent companies can or cannot be held to account for human rights violations outside the country in which they are headquartered, intended only for the most egregious cases.
Second, this focus on supply chain responsibility in the next decade, must find a new way of addressing how most violations occur far down the chain, typically in small and medium sized enterprises and in the informal sector. These are far removed from the world of human rights policies, impact assessments and reporting.
The answer, to extend the current debates about ‘cancel culture’, is not for companies to issue threats or cancel contracts, but to redouble their efforts to work with their suppliers across the tiers, to address the most severe human rights impacts and risks.
Instead of imposing boundaries and retreating behind them, the best definition of due diligence is one in which companies move outward in a spirit of exploration and discovery, to engage where it is most needed and to deliver the best real world human rights outcomes wherever they are found.
Collaboration
Indeed, when we look back in a further ten years, my prediction is that this aspect of collaborative and collective action may be the hallmark of the second decade of the UN Guiding Principles.
The root causes of corporate human rights violations are not in individual behaviors within the business. They are in unsustainable business models and in systemic failures, which fracture the drive for lower costs and ever leaner methods of production and delivery, from any consideration on standards of conduct for business ethics and values.
The drive on corporate purpose is one response from within business to address this gap and one in which respect for human rights must be prominent.
But if problems of modern day slavery, land grabs, sweatshop working, child and forced labor are the cumulative product of multiple company behaviors in complex supply chains – combined with the failures of governance which allow them to occur – then the answer can only be in engendering system-wide reform.
Companies will increasingly address their role in shaping these systems, working with competitors within their own sectors, with governments and as advocates within civil society, to take meaningful action to combat human rights failures.
That must not be a substitute for accountability for their own actions, but an extension of what the scope for action entails.
For Governments themselves, it should also spur a move from rhetoric to action, in embedding human rights in the sustainable development agenda and in achievement of the Paris goals.
‘Climate justice’ and ‘Just transition’ are terms which must address human rights or they are meaningless.
Put all this together and what will be the difference between the first and second decades of the UNGPs?
Systemic change
In the first decade, perhaps the most emblematic failure was in the Rana Plaza factory fire in Bangladesh in 2013, just one week after the factory had passed a social audit from some of its buyers and in which more than a thousand people died.
Big names including Wal-Mart, Primark, Bonmarche and Joe Fresh/Loblaws were all reported to have the factory amongst their suppliers.
However, the silver lining which emerged from the tragedy, albeit imperfect, was in the collective response of retailers working in partnership with governments and local stakeholders, for a combined effort to measurably improve factory standards in the country overall.
Perhaps the next ten years of the UN Guiding Principles will be the decade in which companies shed inhibitions about working with competitors or in resisting sensible legislative change, towards one in which they assume collective responsibility to change the system overall to focus on outcomes.
This system will be one in which the true objective – country-by-country, market-by-market – will be in measurable improvements to freedoms, security and well-being for all peoples touched by global business.
That really is what respect for human rights can achieve.