U.N. Guiding Principles Reporting Framework Released by the Human Rights Reporting and Assurance Frameworks Initiative

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HiRes (2)In late February, after 18 months of research and consultation, a new Reporting Framework has been released to help companies report on their human rights performance in a manner aligned with the expectations set forth in the U.N. Guiding Principles on Business and Human Rights. The Reporting Framework is intended to enable companies of all sizes, and in all sectors, to report on their efforts to operate consistently with the corporate responsibility to respect human rights.

The Framework was released by the Human Rights Reporting and Assurance Frameworks Initiative (“RAFI”), which was led by Shift, an non-profit organization dedicated to business and human rights , and Mazars, an international accounting firm. The work was overseen by the U.N. Working Group on Business and Human Rights and an eminent persons group, including Professor John Ruggie, the former U.N. Special Representative on Business and Human Rights.

The Reporting Framework is structured as a series of questions, many of which seek to focus corporate attention on the human rights concerns most relevant to their operations.  The questions include:

  • What does the company say publicly about its commitment to respect human rights?
  • How does the company integrate its findings about each salient human rights issue into its decision-making processes and actions?
  • How does the company know if its efforts to address each salient human rights issue are effective in practice?

The Framework is intended to allow companies to demonstrate continuous improvement, while focusing disclosures on the most several actual and potential human rights impacts associated with their activities and business relationships.

Five companies are engaged in piloting the Reporting Framework, including Unilever, Ericsson, H&M, Nestlé, and Newmont Mining.

At the time the Framework was released, sixty-seven investors representing $3.91 trillion assets under management released a statement of support for the new guidance. Notably, the investor statement observed that “meaningful disclosure of human rights performance can play a significant role in reducing a company’s human rights risks, contributing to a company’s competitive advantage, and strengthening its long-term financial stability” by:

  • cultivating heightened internal attention to policies, processes, and practices to proactively manage and embed respect for human rights;
  • providing greater access to business opportunities with governments, business customers, and buyers who recognize the reduced risks to themselves;
  • improving relationships with key external stakeholders and securing a stronger license to operate;
  • improving the ability to preserve reputation when negative impacts occur; [and]
  • providing a comparative advantage, with a growing number of stock exchanges scrutinizing companies’ non-financial performance, including human rights performance.

Companies should expect key stakeholders, including investors and policymakers, to make reference to the U.N. Guiding Principles Reporting Framework in the context of discussions regarding human rights reporting. Companies should also be aware that, in 2016, RAFI is expected to release a companion Assurance Framework, which is expected to provide guidance to assurance providers and auditors on how best to assess corporate human rights reporting.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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