New Report from The Economist Provides Insights into Corporate Leaders’ Perspectives on Human Rights
There is no doubt that business and human rights has gone mainstream when The Economist Intelligence Unit writes a report on the subject. The Road from Principles to Practice: Today’s Challenges for Business in Respecting Human Rights – sponsored by a number of governments, business groups, non-governmental organizations, multinational companies, and law and auditing firms – explores businesses’ perspectives on their human rights responsibilities and the steps being taken to implement them. Based on a survey of 853 senior corporate executive from companies around the world as well as nine in-depth interviews of thought leaders, the report provides interesting insights into the state of the art in the field of business and human rights in terms of thinking and practice.
Some of the outcomes are somewhat unexpected. The “business case” for companies to respect human rights, in other words the economic benefits to the corporate bottom-line, has been the primary selling point through which the business world has been lobbied to take up its responsibilities. Eight three percent of the executives surveyed agreed that human rights are a matter for business as well as governments. Furthermore, and naturally with some sector specificity, most executives recognize that their corporate activities can impact on myriad human rights categories. But when asked about the biggest drivers for their companies’ commitment to respect human rights, the top driver (48%) was “building sustainable relationships with local communities.” The other top three answers were “protect company’s brand and reputation” and tying for third place “moral-ethical considerations” and “employees’ expectations about company values and actions.” Coming in at seventh place (21%) was “there is a clear business case for doing so.” While no doubt some of the top responses can be read as economic justifications for respecting human rights, i.e. mitigating risks linked to dissatisfied local communities, protecting the value of the brand, and attracting and retaining top employees, the survey seems to indicate that we may be starting to see a shift away from purely instrumental, short term thinking, to more holistic, mid- to long-term considerations of human rights responsibilities and impacts.
But is this recognition of human rights responsibilities also translating into action? Here the survey results are less satisfactory. Pillar two of the UN Guiding Principles on Business on Business and Human Rights lays out the corporate responsibility to respect human rights. (For an introduction, see Human Analytics Business and Human Rights 101 Prezi.) Looking at two key requirements in pillar two, the survey results evidence that there is still work to be done.
Guiding Principle 16 details the need to develop a publicly available statement of policy committing to respect human rights, which stipulates the expectations of personnel, business partners, and other parties linked to a company’s operations. Only 22% of corporate executives state that their firms have a publicly available human rights policy in some form. Of those, only 37% consulted with external stakeholders, although the Guiding Principles recommend that relevant external expertise inform human rights policies. On the upside, 66% of companies with a public human rights policy train and provide guidance to their employees on it, and 62% communicate the policy across all business relationships.
Guiding Principle 21 states that companies must “know and show” that they address their human rights impacts in practice through formal communications. While 42% of respondents communicate to internal stakeholders on human rights issues, only 27% communicate to external stakeholders. Only 11% publish an annual report on human rights related issues, and a mere 10% report on assessments of human rights impacts for parts of their operations.
The survey did not attempt to tackle two other key requirements of the corporate responsibility to respect human rights, namely a due diligence process to identify, mitigate, and account for how human rights impacts are addressed and a process to remedy adverse human rights impacts. Clearly, questions posed on those matters likely would have made the road ahead seem much longer.
So what is to learn from industry leaders in terms of best practices on that journey? First and foremost, the commitment to respect human rights has to come from the C-suite. Leading companies are much more likely to have their CEOs involved in developing and implementing their human rights policy commitment (59% of the leaders compared with 39% among the rest). Second, leaders display a shift in corporate culture, where the driver for respecting human rights is as much a moral/ethical one as a business one. Finally, leaders integrate human rights throughout their operations. Seventy eight percent of leaders have at least one department tasked with leading on human rights issues, and on average leaders have nine functional teams that are either leading or actively involved on human rights policy and practice.
What are the most common barriers – both among leaders and the rest – in understanding and implementing the requirement to respect human rights? Thirty two percent cite a lack of understanding of the company’s human rights responsibilities, 27% point to the lack of available company resources, and 25% note the lack of training and education for employees. Seeking dialogue and advice from external stakeholders is key to overcoming these barriers. From non-governmental organizations, local communities, government actors, to consultancies and law firms, a range of interlocutors are emerging who can help educate companies and their personnel, raise awareness on human rights issues, develop policies, and create tools to operationalize and implement them into management practices.