Fundamentals of ESG: Understanding Human Rights (Part 3)
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July 21, 2022 - In part 1 of this series, we discussed how human rights plays a role in the social aspect of environmental, social, and governance (ESG) planning initiatives. In part 2 we examined some of the human rights risks in terms of your organization’s supply chain and how effective management and protection of human rights in the workplace positively impacts business. In this final installment, we’ll cover how to develop a clear human rights policy and how to put those concepts into practice.
Developing a Human Rights Policy
Begin with one of the foundational guidance documents mentioned in part 1, the UN Guiding Principles on Business & Human Rights. You’ll recall that these principles describe three parts to operationalizing human rights into business activity. The first is a policy commitment to meet the responsibility to respect human rights. It’s here where we’ll focus, but it’s important to note that the policy must be supported by a human rights due diligence process to identify, prevent, mitigate, and account for human rights impacts, and a process to remedy any adverse human rights impacts that a company causes or contributes to.
Remember that a policy statement is a significant undertaking, as it is a clear, direct statement of company values and must be endorsed by executive leadership. This is also an opportunity to reflect on exactly what those values are, and how they may have evolved over time. Also refer to other policy statements and management systems to identify where there may already be intersections with human rights, so that the human rights policy dovetails with how leadership has already articulated company values.
Policy statements require direct engagement with leadership. Unlike a detailed procedure, a policy is the simplest, most concise way that an organization defines required or prohibited behavior. When developing any policy, its essential that there is Executive-level sponsorship, endorsement, and advocacy. It’s also important that there is function- or department-level leadership input and participation since many departments may be impacted or may have unique insights to contribute to policy development. This is also a great opportunity to educate people on human rights who may otherwise not be as aware of requirements and impacts.
As a next step, take stock of human rights policies that are considered best practice guidance such as UN Guiding Principles on Business and Human Rights, the ILO Conventions described earlier, and industry-specific Codes like the Pharmaceutical Supply Chain Initiative that your organization may already be exposed to.
ID and Engage Stakeholders
Stakeholder identification and engagement is a very important part of developing a human rights policy. After all, these are the individuals who will be impacted in a variety of ways and who can bring a range of perspectives. Think about:
- Who is impacted
- How they are impacted
- Who can contribute
Stakeholders should include employees and worker representatives, but also consider workers who may be uniquely vulnerable or who are less able to advocate for themselves. Power dynamics in any workplace manifest themselves in ways that those who may be less empowered are more sensitive to. This may be based on race, age, gender, or other characteristics. This can also include migrant workers, who may lack protections under local laws, or who may be subject to subtle forms of forced labor, which can be due to retention of passports or accumulation of debts via complex recruitment practices.
Others can include shareholders, customers, leadership, civil-society organizations, etc. These individuals can be engaged via interviews, workshops, surveys, or indirect research. It’s also important to consider which human rights impacts may be uniquely relevant to your sector, region, or business.
Once you’ve gotten the right input, it’s time to develop your policy. This is likely to be an iterative process that should also include ongoing feedback from impacted stakeholders, subject-matter experts, functional leaders, and ultimately an endorsement from the executive sponsor.
Ensure the policy doesn’t conflict with applicable laws and consider operational impacts and stakeholder perceptions. It’s also important to understand the difference between a policy versus detailed procedures or work instructions. A policy is a formal statement outlining the company’s expectations and requirements, while Operational Procedures are detailed work instructions for managers and staff that provide guidance on how to carry out their work in line with that policy.
Once the policy is developed and endorsed by leadership, make sure you communicate it to all impacted stakeholders. That can include distribution through employee handbooks, standard operating procedures, training, contracts, websites, and postings at the worksite.
Remember, a policy by itself is only the starting point and needs to be supported by broader management systems. This should include systems that enable cross-functional communication and submission of grievances when workers identify policies are not being upheld. It requires skills development, goal setting, and reporting to leadership to support continuous program improvement.
Empowering Your Organization
Development and adoption of a Human Rights Policy enables companies to:
- Get ahead of evolving regulations.
- Identify and act upon real risks AND opportunities to the business and to your workforce.
- Communicate organizational values to your most important stakeholders like employees, shareholders, and customers.
- Engage your workforce and understand the things that are important to them.
- Improve scoring on the ways your customers evaluate you.
Follow along with more Thought Leadership content from Sustainability Director Ryan Lynch and other BSI experts here.