Whether from a legal perspective or a normative one, corporations are recognised as human rights ‘duty-bearers’ alongside states. The huge power, corporate influence and impact on the lives of workers, consumers and other communities has meant that attention is now being focused on the role of business in respecting human rights. How your business considers human rights will depend largely on what your organisation does and your motivations behind managing human rights risk. However all businesses, large or small, can take steps to reduce this risk and recognise the role of the wider private sector in respecting human rights. Ardea identifies three main incentives behind complying with human rights expectations:
The Moral Imperative
Corporate activity influences every aspect of our daily lives and is one argument for your business to take responsibility for mitigating any negative impacts. The shift towards privatisation and the increasing number of public-private partnerships providing public services also place a responsibility on corporations. It is especially important for businesses to recognise their negative obligations not to interfere with access to rights, but also that they have positive obligations to enable their enjoyment. Businesses are beginning to recognise that they can use their influence to impact positively on human rights, whether through internal initiatives or taking part in industry-wide collaboration to share best practice with peers. Businesses should recognise that they have a responsibility to protect and promote human rights simply because it is the morally right thing to do.
Reputational and business risk
Growing NGO, media and trade union scrutiny on business activity has contributed to increased awareness of negative corporate impacts on human and labour rights amongst all stakeholders. Buyers, suppliers and consumers all now expect certain labour standards to be upheld and for corporations to be proactive in addressing human rights risks. Respecting human rights therefore gives organisations a commercial advantage over those that don’t. For example, you could increase staff and consumer retention, and attract secure investment and client contracts as a result of reducing reputational risk and ensuring value chains are secure.
You also need to be aware that although you may take measures to avoid compromising human rights, your business could be linked to human rights violations and controversy through association. Association could be contractual, operational or sectoral, or through subsidiaries and suppliers. You must appreciate the human rights records of associated corporations and engage with them positively on the issue. Corporations have reported losing significant funding and investment over allegations of human rights abuses in both their own and in suppliers’ operations.
Finally, respecting human rights in your operations may open up exclusive opportunities. For example, to be a member of some indices such as the FTSE4Good and Dow Jones Sustainability Index, businesses are required to adhere to strict human rights criteria and standards. Obtaining certification-standards or belonging to industry-specific multi-stakeholder initiatives is also something that may give you a competitive edge – many of these have internally set expectations on their membership and take steps to improve members’ performance and ensure compliance.
Finally, and perhaps most importantly, the number of domestic, regional and international regulatory requirements for businesses to comply with human rights standards is growing. Domestic legislation across the world is proliferating amid discussion of a forthcoming binding international instrument. This signals a shift from voluntary business compliance to mandatory regulations. There is also increased emphasis on responsible business approaches to managing human rights impacts. These are peer-reviewed by businesses and monitored by states who may apply reputational or financial sanctions.
It is important to recognise that all businesses can have both positive and negative effects on the enjoyment of human rights and labour rights all over the world. Companies should explore how their corporate power can be harnessed to achieve equal access to human rights for all employees. The next blog in this series will provide you with an insight on actions to embed principles and respect for human rights and normative standards apply to all business activities regardless of size, location, function, industry or management structure.
To learn more, you might like to attend our NEW Business and Human Rights- Online Training and Support Programme
This online training and support programme will provide you with the information you need to understand human rights and business issues and gives you a practical guide on how to be compliant with the relevant laws and guidelines, including adherence to the UNGPs and reference to relevant international law.
We are also able to offer this workshop on a bespoke basis to companies. If you are interested in discussing this option, please emailus.
We also have a range of free and paid resources on our website and we hope that you will enjoy browsing!
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You may also be interested in our autumn and winter 2021 series of webinars on business and human rights.