- This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.
- Author: Dorothée Baumann-Pauly, Director, Geneva Center for Business and Human Rights, Geneva School of Economics and Management, University of Geneva, Priya Vithani, Platform Curator, Data Policy, Centre for the Fourth Industrial Revolution, World Economic Forum
- Amid economic uncertainty, there is a danger that businesses will place human rights on the back burner.
- Businesses that adopt human rights as their central operating principle manage resilience more effectively.
- Businesses should set standards, influence their supply chains and have clear standards internally.
Human rights are in danger of being placed on a back burner by businesses, amid an array of seemingly more pressing concerns: warnings of a global recession, geopolitical shifts and a climate emergency. On Human Rights Day, it’s a good time to remember how businesses benefit from having human rights as their central operating principle. Clarity about this helps them to navigate an increasingly complex global business environment in which managing business resilience has become essential. It also helps to identify opportunities to innovate.
Stakeholders and shareholders increasingly expect companies to respect human rights. Establishing lasting human rights and sustainability policies and practices will be key to the longer term survival and success of any business. It is also increasingly apparent that social and environmental issues cannot be viewed separately. Businesses need to take a holistic approach to implementing Environmental, Social and Governance (ESG) targets. As was made evident most recently at the 11thUN Business and Human Rights Forum, robust and fully integrated human rights policies are critical to ensuring that businesses can reach their broader impact targets.
Integrating human rights into business resilience
For over a decade, the UN Guiding Principles on Business and Human Rights have guided companies and governments seeking to enhance business resilience in the face of disruption. The following cases highlight three innovative ways to promote both human rights principles and business resilience.
1. Setting standards that can be replicated
Dutch bank ABN AMRO revised its lending practices with Indonesian palm oil producers after poor working conditions on plantations made headlines. To set incentives that palm oil producers work on improving these conditions, the bank made its lending conditional on the company’s participation in the Roundtable for Sustainable Palm Oil (RSPO) and required progress reports on improved labor practices on plantations. It also set economic incentives by offering better interest rates for improved practices. These steps allowed ABN AMRO to bring about operational and corporate behavioural changes with its clients across the palm oil industry, and to create conditional lending practices that could be replicated by other banks.
2. Addressing human rights throughout supply chains
The Swiss-based commodity trading firm Trafigura revised its trading practices in the Democratic Republic of Congo (DRC) for cobalt to address human rights challenges related to artisanal mining (ASM). In ASM, miners dig with basic tools and their bare hands to extract ore. In the DRC, this practice is an integral part of the cobalt supply chain and it provides a lifeline for millions. By creating an exclusive offtake agreement with the mine operating company, Trafigura was able to use its influence to help integrate this informal mining activity on the industrial concession. This meant that standards for working conditions were set and enforced by Trafigura, the mine operating company and an NGO to ensure safe working conditions for artisanal miners. Trafigura was able to effectively address two salient human rights concerns: mine safety and child labor.
3. Integrating human rights internally
As big tech faces a steady decline in earnings and tech companies make difficult resourcing decisions, it is important to ensure that vulnerable users are protected. For example, companies with regular human rights reporting and metrics, such as Microsoft, have built in a consistent approach towards integrating human rights in line with the UN’s guiding principles. Microsoft has also benchmarked employee performance (particularly product and engineering teams) against the reduction of bias and protection of vulnerable populations. This sets a lasting precedent to uphold and respect human rights despite economic and political uncertainty. It is clear that human rights policies must be fully integrated into business models rather than relying on just human rights and policy teams, or on leadership.
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What’s the World Economic Forum doing about diversity, equity and inclusion?
The COVID-19 pandemic and recent social and political unrest have created a profound sense of urgency for companies to actively work to tackle inequity.
The Forum’s work on Diversity, Equality, Inclusion and Social Justice is driven by the New Economy and Society Platform, which is focused on building prosperous, inclusive and just economies and societies. In addition to its work on economic growth, revival and transformation, work, wages and job creation, and education, skills and learning, the Platform takes an integrated and holistic approach to diversity, equity, inclusion and social justice, and aims to tackle exclusion, bias and discrimination related to race, gender, ability, sexual orientation and all other forms of human diversity.
The Platform produces data, standards and insights, such as the Global Gender Gap Report and the Diversity, Equity and Inclusion 4.0 Toolkit, and drives or supports action initiatives, such as Partnering for Racial Justice in Business, The Valuable 500 – Closing the Disability Inclusion Gap, Hardwiring Gender Parity in the Future of Work, Closing the Gender Gap Country Accelerators, the Partnership for Global LGBTI Equality, the Community of Chief Diversity and Inclusion Officers and the Global Future Council on Equity and Social Justice.
Ultimately, businesses that are able to build human rights into the core of their operating models and across supply chains will protect these rights even in turbulent times. This will, in turn, promote greater resilience in business, allowing companies to thrive in the long-term as they shift and adapt to disruption while still remaining responsive to their stakeholders.
Since the release of shocking investigative reports on Dutch bank ABN AMRO’s involvement in palm oil plantation slavery, the bank has revised its lending practices with Indonesian palm oil producers. The reports detailed appalling working conditions on plantations, including children as young as six working 14-hour days, with no days off. The revised lending practices require that Indonesian palm oil producers become certified by the RSPO, the world’s leading sustainable palm oil certification program.