The foundation of the UNGP Reporting Framework lies in the globally recognized standard: the 2011 Un Guiding Principles On Business And Human Rights (UNGPs). For a concise introduction to the UNGPs, resources like this webpage from Shift are highly recommended, featuring insightful videos and primers. To delve deeper into the relationship between the UNGP Reporting Framework’s questions and the UNGPs, this graphical representation offers a clear visual explanation.
I. Business and Human Rights: Core Concepts
A. Defining Human Rights
(Sections A and B are adapted from The Corporate Responsibility to Respect Human Rights: An Interpretive Guide, published by the United Nations Office of the High Commissioner for Human Rights.)
At its heart, the concept of human rights is profoundly simple yet incredibly impactful: every individual deserves to be treated with dignity. Human rights are intrinsic to all people, regardless of their origin, location, gender, ethnicity, religion, language, or any other status. These rights are universal and apply to everyone, without exception. Crucially, they are interconnected, interdependent, and indivisible, meaning they cannot be ranked in importance or selectively applied.
Human rights are frequently articulated and protected through law, encompassing treaties, international customary law, general principles, and other instruments of international law. International human rights law establishes obligations for States to act or refrain from acting in specific ways to ensure the promotion and protection of fundamental human rights and freedoms for all individuals and groups.
The landmark 1948 Universal Declaration of Human Rights, drafted by representatives from diverse nations, emerged as a direct response to the horrors of World War II. It stands as the cornerstone of contemporary human rights law. In 1993, the Vienna World Conference on Human Rights saw 171 participating nations reaffirm their dedication to the principles enshrined in this foundational document.
The Universal Declaration’s principles are formalized in international law through two key covenants: the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights, both established in 1966. Each covenant has been ratified by over 150 states globally. These three documents collectively form the International Bill of Human Rights, a comprehensive framework for global human rights standards.
Specifically addressing workers’ rights, the International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work commits all member states to upholding four core categories of principles and rights. These include: freedom of association and the right to collective bargaining; the elimination of forced labor; the abolition of child labor; and the elimination of discrimination in employment and occupation. These principles are further detailed in the eight core conventions of the ILO.
Together, these documents serve as the essential benchmark for “internationally recognized human rights,” as referenced in the Guiding Principles. A comprehensive list of human rights from the International Bill of Human Rights and core ILO conventions is available in Annex A.
B. Why Human Rights Matter to Businesses
While international human rights treaties primarily place legal obligations on States, businesses are not directly bound by them in the same way. States are responsible for incorporating these international obligations into national law and ensuring their enforcement. Indeed, every country’s legal system includes various safeguards against human rights abuses by businesses, such as labor laws, anti-discrimination laws, workplace health and safety regulations, and environmental protection laws.
However, national laws may not comprehensively cover all internationally recognized human rights, may be weakly enforced, may not apply to all individuals, or may not be consistently upheld by governments and courts. The Guiding Principles emphasize that when national laws fall short of internationally recognized human rights standards, companies should adhere to the higher standard. Furthermore, in situations where national laws conflict with these international standards, businesses are urged to find ways to uphold the spirit of international principles within the boundaries of national law.
Therefore, internationally recognized human rights are relevant to businesses beyond mere legal compliance. Business operations can significantly impact people’s enjoyment of their human rights, both positively and negatively. Experience demonstrates that businesses can and do infringe upon human rights when they fail to adequately consider this risk.
Enterprises can affect the human rights of a wide range of individuals, including their own employees and contract workers, customers, workers throughout their supply chains, communities located near their operations, and the end-users of their products or services. The potential impact spans virtually the entire spectrum of internationally recognized human rights, as illustrated in Annex A.
In practice, some human rights issues will be more pertinent than others depending on the specific industry and operating context, leading companies to prioritize certain areas. However, in principle, any business has the potential to cause or contribute to negative impacts on any internationally recognized human right.
The Guiding Principles, therefore, clearly state:
- The International Bill of Human Rights and the core ILO conventions are the fundamental starting points for businesses to understand human rights. They provide a framework for assessing how business activities and relationships might affect these rights and for developing strategies to prevent or mitigate potential adverse impacts.
- Depending on their specific operational context, companies may need to consider additional human rights standards to ensure they adequately respect the rights of individuals who may be disadvantaged, marginalized, or excluded from society. These vulnerable groups, such as children, women, indigenous peoples, ethnic or other minorities, and persons with disabilities, are often at heightened risk of human rights impacts.
C. Business Advantages of Respecting Human Rights
Companies recognized for upholding human rights reap numerous benefits and opportunities, including:
- Enhanced Risk Management: Reduces the likelihood of operational disruptions, public criticism and campaigns, legal action, reputational damage, and difficulties in employee retention and recruitment.
- Improved Access to Business Opportunities: Opens doors to partnerships with governments, financial institutions, and business clients who increasingly prioritize working with companies that effectively manage human rights risks, recognizing the reduced risk for themselves.
- Positive Recognition and Reputation: Attracts positive attention from socially responsible investors and civil society organizations, acknowledging the company’s commitment to improving human rights performance and addressing related challenges.
- Stronger Stakeholder Relationships: Fosters improved relationships with employees, local communities, and other stakeholders, building trust and strengthening the company’s social license to operate.
- Reputational Resilience: Enhances the ability to protect reputation during negative incidents, as public understanding of the company’s proactive efforts to avoid such issues improves.
- Attracting Future Leaders: Improves appeal to the next generation of young leaders who are increasingly focused on companies’ social and ethical performance, including human rights.
- Competitive Advantage: Provides a competitive edge as more stock exchanges and public and private financial institutions scrutinize companies’ non-financial performance, with a growing emphasis on human rights considerations.
II. The UN Guiding Principles on Business and Human Rights (UNGPs)
The UN Human Rights Council unanimously endorsed the Guiding Principles in June 2011, demonstrating global governmental support from all regions.
A. The Three Pillars of the UNGPs
A key contribution of the UNGPs is their clear articulation of the respective duties of States and the responsibilities of businesses in ensuring business operations respect human rights.
The Guiding Principles are structured around three interconnected pillars:
- The State Duty to Protect Human Rights: States are obligated to protect against human rights abuses by third parties, including businesses. This is achieved through appropriate policies, legislation, regulations, and judicial mechanisms.
- The Corporate Responsibility to Respect Human Rights: Businesses have a responsibility to respect human rights. This means acting with due diligence to avoid infringing on the rights of others and addressing any adverse human rights impacts they are involved with.
- Access to Effective Remedy: There is a critical need for greater access to effective remedies, both judicial and non-judicial, for victims of business-related human rights abuses.
Since their endorsement, the UNGPs have fostered a convergence of standards on business and human rights internationally, solidifying their position as the definitive global standard in this field.
B. Understanding Corporate Responsibility to Respect Human Rights
Human rights impacts associated with business activities and relationships are rarely intentional. Most individuals working within companies assume their actions do not harm human rights. However, in practice, companies often become implicated in human rights issues because preventing such impacts requires focused attention and coordinated action across various departments and levels of the organization. Policies and processes designed to ensure respect for human rights are often weak or lacking.
The corporate responsibility to respect human rights, as defined in the second pillar of the UNGPs, is a fundamental standard of conduct for all businesses. According to the Guiding Principles, companies should establish and implement the following:
- A Policy Commitment to Respect Human Rights: A formal statement outlining the company’s commitment to respecting human rights.
- A Human Rights Due Diligence Process: A systematic process encompassing:
- Assessing actual and potential human rights impacts.
- Integrating findings and taking action to prevent or mitigate potential impacts.
- Tracking performance in addressing human rights.
- Communicating performance on human rights to relevant stakeholders.
- Processes to Provide or Enable Remedy: Mechanisms to provide or facilitate remedies for those who have been harmed in cases where the company has caused or contributed to negative human rights impacts.
KEY FEATURES OF THE CORPORATE RESPONSIBILITY TO RESPECT HUMAN RIGHTS
→ Focus on Human Rights Risks: The responsibility explicitly addresses the risks to human rights that may arise from a company’s activities and business relationships. Increasingly, evidence shows a convergence between human rights risks and business risks, such as operational disruptions, decreased productivity, and challenges in securing new business. However, the UNGPs and this Reporting Framework prioritize the risk to human rights as the primary concern.
→ Stakeholder Perspectives are Crucial: Effectively identifying and addressing human rights risks requires understanding the perspectives of those who may be affected. This necessitates engaging, whenever possible, with individuals whose human rights might be directly impacted or with their legitimate representatives. When direct engagement is not feasible, companies can gain insights through consultations with other stakeholders, including independent experts, human rights defenders, civil society organizations, and by reviewing relevant reports and resources.
→ Scope Across Activities and Relationships: The responsibility to respect human rights extends to a company’s own activities and its business relationships. Business relationships encompass business partners, entities within the company’s value chain (including those further removed in the supply chain), and any other business, government, or entity directly linked to its operations, products, or services. This responsibility therefore goes beyond impacts directly caused or contributed to by the company’s own actions. It also includes impacts that are directly linked to its operations, products, or services, even without direct causation or contribution from the company. However, the nature of the company’s responsibility varies in each situation. Further clarification on these distinctions can be found in the commentary to UN Guiding Principle 19.
→ Respect is a Baseline Expectation, Not Philanthropy: The responsibility to respect human rights is distinct from a company’s voluntary efforts to support or promote human rights. While projects and initiatives aimed at supporting or promoting human rights can be valuable contributions to society, they are voluntary undertakings. In contrast, the responsibility to respect human rights is a fundamental expectation for all companies, regardless of size, sector, or operating context. At a minimum, all companies are expected to avoid infringing on human rights and to address any harms they are involved in. This core responsibility cannot be offset by social investment or philanthropic activities.
C. Implementation is an Ongoing Process
Implementing the corporate responsibility to respect human rights is a journey that evolves over time. Furthermore, the nature of human rights risks associated with a company’s operations, products, or services will likely change as its operating environments, activities, and business relationships evolve. Therefore, implementation is not a one-time action but an ongoing process of adaptation and improvement.
The steps outlined in the Guiding Principles empower companies to demonstrate their progress in meeting this responsibility. The expectation that companies should transparently demonstrate their human rights performance has fueled the demand for more comprehensive and effective corporate reporting in this critical area.
