Why is a corporate human rights policy important? 

Corporate responsibility to respect human rights is enshrined in Pillar II of the UN Guiding Principles (UNGPs). The UNGPs state that business enterprises should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved. 

More specifically, Guiding Principle 16 states the following: “As the basis for embedding their responsibility to respect human rights, business enterprises should express their commitment to meet this responsibility through a statement of policy”. 

Developing a human rights policy is therefore the first step that a company should look to take to demonstrate that it respects human rights. A properly implemented human rights policy will shape a company’s human rights approach and guide effective Human Rights Due Diligence (HRDD). 

Beyond demonstrating leadership, the development of a human rights policy is also important to: 

• prepare for increasing legal requirements around business and human rights; 
• identify policy gaps and start a process that alerts the company to new areas of risk, within its own operations and in the supply chain; 
• develop good and effective internal business practices; 
• gain commercial benefits associated with good human rights practice, including attracting investment, improving the procurement process and supplier relations, and attracting talent; and 
• respond to the expectations of, and build trust with, both internal and external stakeholders. 

In recent years, there has been an increase in benchmarks on corporate human rights policies and practices. Benchmarks, such as the Corporate Human Rights Benchmark (CHRB), seek to drive transparency and accountability to encourage companies to enhance their efforts. To avoid scoring poorly, which could affect reputation and financial performance, companies should take steps to continuously improve their policies and practices. This includes conducting thorough human rights due diligence, engaging with stakeholders, implementing robust grievance mechanisms, and regularly reviewing and updating their policies to align with international standards and best practices. 

Does your company have a human rights policy in place? Are you confident that it’s aligned with international standards and best practice? 

At Ardea, we have developed an approach to policy strengthening and development that incorporates the law, best practice, and stakeholder engagement. This ensures that the policies we develop are fit for purpose and sufficiently embedded. We can support organisations to: 

• Conduct a detailed review of current policies to identify policies to be strengthened and policies that need to be developed. 
• Ensure policy alignment with international standards such as the UNGPs and OECD Guidance. 
• Strengthen policies to ensure they appropriately address human rights issues. 
• Develop new policies.  
• Align narrative and tone. 

If you’re concerned about how to identify and manage the risk of potential liability as a director or non executive director, then our Masterclass on Managing Director’s Liability: Climate Change and Human Rights may be for you. Read more here.

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