Companies say they support human rights but a new sustainability report suggests that few have detailed policies
While the relationship between business and human rights will always be a journey, not a destination, for many companies it seems that the hurdles are just getting higher.
Years of consultation with human rights experts, global corporations, local communities and government officials finally led to the development of the UN Guiding Principles on Business and Human Rights (UNGPs). Thousands of stakeholders worldwide agree: human rights due diligence and providing access to remedies are core responsibilities of businesses. Great. Now what?
The Tomorrow's Value Rating 2013 (TVR) an annual study conducted by DNV Two Tomorrows, underlines the difficulties of moving from agreement to execution. Over half of the assessed companies support the UNGPs, but they are unclear about how they actually implement them.
The report's results confirm findings of an earlier survey undertaken by DNV Two Tomorrows which found that over two thirds of companies are familiar with the UN GPs, but only one third have a devoted human rights policy in place. And even fewer can report with evidence that these policies are having an effect on the ground. Why is this? Maybe they just don't know where to start.
Implemeting the UNGPs
One difficulty in moving the agenda forward is the challenge of agreeing what constitutes good human rights performance, and how this is understood at a collective or industry level. This discussion is a crucial next step in understanding the practical applicability of the UNGPs. The TVR found that progress is slow, and we are still far from where we want to be.
For example, in the oil and gas sector only three of the 10 companies covered have a standalone human rights policy and management of human rights appears to be often reactive rather than proactive. Whereas the UN was a good facilitator for defining the interface between business and human rights, perhaps we should look at other structures to enable the execution of the next, practical steps? The TVR identified two challenges that companies struggle with: sector-specific implementation, and local specificities.
In seeking to identify practical ways to implement the UNGPs, companies are finding ways to collaborate, often on a sector and industry level. Multi-stakeholder industry collaboration around human rights is now starting to shape up. For example, several European energy utilities, including EDF, E.ON and Swedish-based Vattenfall, have united to share knowledge about respecting human rights in the coal mines they purchase from.
As a result, they jointly set up a multi-stakeholder not-for-profit, called the Bettercoal initiative. The initiative promotes transparency of coal mine performance, with the hope of allowing coal buyers to make better-informed purchasing decisions. Its multi-stakeholder approach invites a wide range of parties around the discussion table to achieve its purpose. While the Bettercoal initiative undeniably has good intentions, it is still too early to tell whether it will be able to generate practical results. Industry collaborations are not a guarantee to success.
ICT companies, for example, set up the Global Network Initiative in 2008, with the intention of protecting freedom of expression and securing the right to privacy. Nonetheless, the industry recently came under scrutiny for exactly these two issues. The Arab Spring taught us that some governments are willing to suppress freedom of expression by coercing ICT companies into darkening entire national networks. Moreover, the recent spying by some western governments on their own citizens, with the involvement of ICT companies, has damaged the sector's reputation – even if companies are often compelled by law to comply with government requests.
Industry collaboration therefore, may not be effective enough. Respecting human rights is subject to many more dynamics. An inherent challenge is that understanding and implementing human rights management is relative to the local operating environments of specific businesses.
Companies become exposed to the risk that the solution created at a sector level does not take into account the issues that are of specific relevance to an individual company at a local level. Only very few companies, such as Daimler, are trying to tackle this issue by rolling out country-specific human rights due diligence processes and are encouraging local business partners to do the same. The automobile manufacturer collaborated with the Danish Institute for Human Rights, to develop a human rights compliance assessment tool. This is developed separately for each country of operation, including countries where it only has operations through a minority shareholding. So far, the tool has only been developed for three countries, though tools for at least 15 other countries are in the pipeline to be completed before 2015.
Next steps
Collaboration and shared learning within industries and on local levels can help move us forward. However, they are only part of the picture. Practical experience and understanding of how human rights practices can be transferable between different industries, remain limited.
A key challenge lies in identifying cross-sector commonalities. What can different industries operating in the same area or country learn from each other? Could local level multi-stakeholder initiatives be a next step? This type of cross-fertilisation could potentially catalyse more widespread practical implementation of the UNGPs.
Companies are still trying to work out how to shape these collaborations. The TVR 2013 report shows that some companies have approached these challenges, providing a much needed springboard to get over those high hurdles, but there's still much to be done.
Anna Turrell is senior consultant and Jon Woodhead is divisional sustainability manager, North-West Europe at DNV Two Tomorrows
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