Building from firm foundations

Guest contributor:Susan Mizrahi is Sustainability Executive and Non-Executive Director at the UN Global Compact Network Australia

The ubiquitous nature of ‘human rights’ can overwhelm businesses and teams. What does it actually mean? And how can we have confidence that we’re doing the right thing?

It’s oddly common to see a business’ materiality assessment rate ‘employee labour conditions’ as a high priority but ‘addressing human rights’ as one that is low. While this phenomenon may be more pronounced in certain industries and countries, it occurs due to a low understanding of human rights within the business environment and historically patchy regulatory requirements for businesses

In recent years, however, human rights frameworks from UN and regional bodies to national governments have placed proactive measures and greater accountability on businesses in relation to human rights. Of foundational significance was the UN Guiding Principles on Business and Human Rights – also known as the Protect, Respect, Remedy framework – which came into effect just over 10 years ago. This framework was notable for establishing a global consensus that while states have the duty to protect human rights, businesses also have a responsibility to respect them. So, today, businesses must seek to prevent or mitigate any negative impacts their business may have on human rights, and remedy harms that occur.

Not unlike many environmental, social and governance issues, most businesses are already doing more than they realise when it comes to human rights. An easy way to conceptualise human rights from a business perspective is through the lens of employment law and conditions – ensuring a workplace that is free of discrimination, that has physically and mentally safe working conditions, and one that has appropriate wage and leave entitlements.

But just because a business may already be active in this space, doesn’t necessarily mean they’re doing enough – especially in light of these new and evolving regulations worldwide. For example, the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) will create mandatory human rights and environmental due diligence obligations for companies operating in the EU, whether they are based there or not.

Similarly, the German, Australian, Canadian and other modern slavery laws warrant a level of supply chain examination, transparency and traceability that procurement, risk, legal or sustainability teams are likely ill-equipped to manage and disclose.

The regulatory changes happening globally mean that understanding, managing, and disclosing your business’ human rights impacts is the new norm.

To ready your business or strengthen your practices, businesses should:

Establish a human rights policy, potentially supported by a suite of policies or standards (i.e. Modern Slavery Policy or Code of Conduct). Beyond tokenism, this commitment needs to be supported by adequate processes to avoid risk exposure to claims of social washing or misleading and deceptive conduct.

Conduct due diligence: Assess your human rights risks and impacts, integrate and act upon the findings, track responses and communicate how you’re addressing these. Giving sufficient time and resources to this process – and repeating it periodically – can help ensure your business is not causing or contributing to human rights abuses, andis able to use the leverage of its business relationships if it is directly linked to human rights issues.

Remedy: Establish clear and accessible grievance mechanisms for individuals and communities potentially affected by your operations.

Capacity build your teams and suppliers to help identify and mitigate risks related to human rights violations and protect the business from legal, financial and reputational damage. This is important even if human rights rank low in your materiality assessment because this is likely due to a lack of understanding about human rights terminology and risk factors. Additionally, human rights training can both foster ethical and responsible operations, and build trust with customers, investors, and other stakeholders.