Recently we have focused on legislation concerning companies’ responsibilities to their supply chains, and jurisdictions where comparable laws are being discussed. The UK Equality and Human Rights Commission, a public body charged with promoting equality and diversity and safeguarding human rights, has just published guidance to help UK company boards assert human rights leadership from the top-down. The guide lays out five practical steps boards can take to identify, mitigate, remedy, and report on the human rights impacts of their operations, and meet the UK government-supported UN Guiding Principles on Business and Human Rights (UNGPs). The steps are as follows:
First, boards must “embed” the responsibility to respect human rights within a company’s business practices. They must understand the unique and sector-specific human rights challenges their companies’ face and how their companies manage them. This requires, among other things, having someone with human rights related know-how on board, even a “human rights champion,” and ensuring consistent narratives and messaging on the company’s commitment to human rights – specifically, that committing to human rights is fundamental to operating a successful enterprise.
Second, companies must detect, grasp, and periodically review their most “salient” or serious human rights-related risks, the guide clarifying that due diligence in this context refers to capturing “risks to people, not…the business.” The guidance acknowledges that human rights risks may sit at the heart of what a company does and arise from the company’s business model, business relationships, operating context, the composition of its workforce, or even its efforts to influence public policy (i.e., lobbying efforts potentially conducted against laws and regulations that protect human rights).
Third, companies must systematically respond to their most serious human rights risks and extend remedies where warranted. The guide notes that this may be effected through a number of channels: a company’s commercial influence (setting out human rights standards in tenders, contracts or JV agreements, and where relevant conducting supply chain audits); business influence (providing training to and employing appropriate standards and messaging with business partners); industry action (developing peer-based solutions to shared human rights challenges); engaging with local and international organizations (ranging from capacity building at the local level to encouraging better enforcement at the national level, or even the emergence of new human rights related laws); and finally via multi-stakeholder initiatives.
Fourth, companies should not proceed in a bubble but gather knowledge and inputs from a wide range of stakeholders when developing their responses to address their human rights risks. This list includes company staff, supply chain workers and union representatives, indigenous communities and leaders, and experts at the local, national, and international level.
Fifth and finally, companies should report on their relevant or most serious human rights risks and satisfy regulatory requirements, which may include the UK Modern Slavery Act, Companies Act 2006 and EU Non-Financial Reporting Directive 2014. Noting that the UNGPs offer an effective framework to do this, the guide articulates that regardless of the approach taken (providing information in an annual report, sustainability report, or standalone documents), reporting should be easy to locate on a company’s website and written in an accessible manner.