Five years ago, on June 16, 2011, the way we view the human rights responsibilities of companies changed. On that day, the United Nations Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights (the “Guiding Principles”). This endorsement could have gone unnoticed except by those in the room at the time, a limited number of UN-watchers, and a select few academics. This is decidedly not the case. Instead, the Council’s endorsement helped usher in a new era of both private and public action intended to address the human rights impacts of corporate activity.
As an attorney in private practice, my job for more than 10 years has been to advise corporate clients on how to manage the human rights impacts of their operations in a responsible manner. In recent years, as I answer queries from companies that range significantly in both size and sector, I have seen countless examples of how our collective expectations of companies have shifted since 2011. Simply put, and as has been said by others before me, the Guiding Principles are a game-changer.
So, what are the Guiding Principles? Drafted by Professor John Ruggie, the UN Special Representative on Business and Human Rights, the Guiding Principles are built around the fundamental expectation that companies should operate with respect for human rights. The Principles provide detailed guidance to companies seeking to operate consistently with that expectation. Specifically, the Guiding Principles state that companies should carry out “human rights due diligence,” a process that includes:
assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed. (Principle 17)
Why are the Guiding Principles such a big deal? The Principles could have joined the annals of international guidelines that are drafted, approved, and have no lasting impact. Over the last five years, however, public and private institutions ranging from the European Commission to the American Bar Association have adopted or endorsed core elements of the Principles and used them to drive shifts in business behavior. It may be hard to remember, but at the time Professor Ruggie started his work in 2005, there was no consensus on the human rights responsibilities of companies. Today, as stated in the recently revised OECD Guidelines for Multinational Enterprises, “respect for human rights is the global standard of expected conduct” for business.
What are the practical impacts of these changes? Increasing numbers of companies are drafting and implementing robust human rights policies and new corporate standards are emerging on human rights reporting and assurance. Most notably, the expectations set forth in the Guiding Principles are applicable to all companies, not just large multinationals that may be motivated to address human rights concerns by reputational concerns.
I know that we are living in a different world when I get calls from small- and medium-sized companies that are confronting expectations regarding their human rights performance for the very first time. Many of these pressures are coming from governments. Governments around the world are drafting National Action Plans on business and human rights and, consistent with those plans, are drafting legislation and regulations that reinforce the expectation of human rights due diligence.
Many new or contemplated legislative provisions impose transparency requirements on companies. Examples include the California Transparency in Supply Chains Act and the U.K. Modern Slavery Act, both of which call for public disclosures on corporate due diligence efforts to address the risks for forced labor in their supply chains. These requirements are consistent with the expectation set forth in the Guiding Principles that companies should be transparent about their efforts to address the human rights impacts of their activities.
Increased levels of transparency have supported the development of new initiatives like the Corporate Human Rights Benchmark, which will rank companies on their efforts to manage their human impacts. Notably, a recent survey of 853 corporate executives conducted by the Economist Intelligence Unit found that, of all possible interventions that could enable companies to meet their human rights responsibilities, “a public benchmark” of corporate human rights performance was the top choice. Such benchmarking is not possible without the type of transparency called for by the Guiding Principles.
To be sure, there is a long way left to go. None of the observations made above are intended to minimize the fact that there is much left to do to ensure that those whose rights are negatively impacted by corporate activity have access to appropriate remedies. The Guiding Principles call for the development of public and private grievance mechanisms for victims of human rights harms, but this is an area that has not yet been sufficiently addressed.
It is also true that, within many companies, efforts to internalize the Guiding Principles remain nascent at best. Translating a concept like “respect for human rights” into effective and credible management plans is a difficult challenge even for those companies that are deeply committed to the exercise. There is no one-size-fits-all approach and the nature and complexity of a company’s human rights impacts may vary widely depending on the company’s size and sector, as well as the locations of its business operations.
That said, it is undeniable that the game has changed. We will, and should, continue to debate what needs to be done in order to ensure that companies meet their human rights responsibilities, but we are now speaking with a common set of terms and referencing an established framework. The professional space in which I work — business and human rights — has emerged as a new field of practice. It was not that long ago that the notion that companies had human rights responsibilities was hugely controversial; today, the U.S. Government has referenced the Guiding Principles as providing a “floor” for business conduct with regard to human rights. Whether a floor, or a solid foundation, it is worth taking a moment to reflect on the ways in which the events of June 16, 2011 altered the world of business.
This post was originally published on The Huffington Post.