In 2018, the World Business Council for Sustainable Development declared that we are “entering a new era of human rights transparency.” The last decade has seen a rapidly evolving regulatory environment and a growing number of initiatives designed, in whole or in part, to uphold human rights. However, across the corporate sector there is a sense of initiative fatigue that leads us to question whether these programs are proving to be a distraction from the task at hand and how effective they are at driving true change.
With limited resources and time available, it can be extremely challenging to meet the requirements of different initiatives, from both a disclosure and action perspective. WBCSD provides a useful map of developments since the launch of the UN Guiding Principles on Business and Human Rights. Looking beyond legislation and national action plans, it names:
- Nine benchmarks, databases and indexes, such as the Corporate Human Rights benchmark through to the Dow Jones Sustainability Index launching its standalone criterion on human rights.
- Eight joint action platforms such as the Swiss Platform for Sustainable Cocoa and the Dutch Banking Sector Agreement on Human Rights.
- Thirteen sets of guidelines, including the European Commission’s guidelines on non-financial reporting and the Danish Institute for Human Rights’ Impact Assessment Guidance and Toolbox.
And this is just in regard to human rights. The average company will face a range of issues, each with their own ecosystem of initiatives. It’s not surprising that there’s a growing sense of overload.
Are they a distraction from real change?
If a company’s efforts are focused on responding to the newest questionnaire, sitting on the advisory panel of the latest cross-sector collaboration and attending the launch of the most recent report, then what time does it actually have to help improve human rights?
That being said, one can assume that these initiatives and frameworks are not just built for the sake of it; they’re filling a gap that the world believes corporates need to step into, be it through their actions, disclosures or both. Organizations are investing their time, money and goodwill into these initiatives specifically to drive change.
Organizations are investing their time, money and goodwill into these initiatives specifically to drive change.
They’re also voluntary, and if an organization has a good reason not to be involved or comply with them, they don’t need to. These frameworks can only be a distraction from real change if one allows them to be.
There are ways to be strategic about approaching these various initiatives. Companies can and should:
- Focus on and prioritize the initiatives that best fit with their business, risk and opportunity profiles, and ability to act on the commitments involved in the initiatives.
- Review the different requests for information they’re receiving and make one easily accessible disclosure of data, policies and commitments for stakeholders to scrutinize.
- Based upon the above, have the confidence in their disclosures to not spend hours filling out another questionnaire and instead point researchers and analysts to what’s publicly available.
While the variety and number of initiatives might be overwhelming, and they have the potential to be a distraction and burden on corporate resources, the most important thing to try and understand is whether these initiatives are achieving their intended aims.
How effective are they at driving change?
There is a clear theory of change behind these initiatives. Pushing for greater disclosure will lead to more pressure on companies to understand and improve performance. It will also create evidence which stakeholders can use to push companies in the right direction. This rewards leaders and punishes laggards, creating competition and raising standards across the board. The virtuous cycle then restarts as new best practices emerge.
This rewards leaders and punishes laggards, creating competition and raising standards across the board.
That being said, it is much harder to substantiate whether this is really happening.
The Corporate Human Rights Benchmark (CHRB), which has now merged with the World Benchmarking Alliance, seeks to: “tap into the competitive nature of the market as a powerful driver for change in confronting this challenge [Preventing adverse impacts on workers, communities and consumers].”
Its 2018 report compared results with its initial pilot and found improvements in both company performance and disclosure. The anecdotal evidence they have gathered shows that providing an effective framework, backed up by the fact that the results will go public, has given some companies the impetus to make improvements. Eni, Adidas and Vale have all found the benchmark as helpful in driving improvements in the disclosure and reporting of human rights, as well as driving improved internal decision-making.
The CHRB has further anecdotal evidence to suggest that increased pressures around disclosure are leading to increased performance and change: “Companies, consultancies and leading law firms have all confirmed that initiatives such as the CHRB are driving changes within some companies.”
RobecoSAM, the company behind the Dow Jones Sustainability Indices, in providing commentary on the introduction of specific questions on human rights due diligence processes says it has seen a growth in companies tackling their human rights issues over time. This has led to increased performance against the RobecoSAM assessment.
Whilst the theory of change may be correct, and there is some evidence to support it, there are challenges that companies and the organisations behind these initiatives need to work on together to make further progress towards improving performance on human rights.
Attributing change to one particular initiative and not the myriad other factors that can lead to change will always be difficult. Increased dialogue between companies and initiatives will help both sides better understand the impacts and limitations of their programs.
Attributing change to one particular initiative and not the myriad other factors that can lead to change will always be difficult.
These initiatives deal with very sensitive issues for corporations. It takes a level of humility and transparency from an organization to be open and honest about the challenges it has faced and how external drivers have helped push it in certain directions. Both sides, those creating initiatives and those utilizing them, need to work together to create safe spaces in which to have these conversations.
Improving disclosure and performance on human rights is an important way for businesses to help achieve the vision of peaceful and inclusive societies as set out by the Sustainable Development Goals. Using the various initiatives and regulatory frameworks as a guide to more strategically focus and prioritize disclosures will help corporates concentrate efforts on the actions that will drive long-term change.