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Corporate Human Rights – Further Standards Needed?

By Alex Hughes

The United Nations Global Compact is an initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies. It was officially launched in 2000, with nine principles.  Since 2004, the UNGC has ten principles in the areas of human rights, labour, the environment and anti-corruption. In this series of blogs, we consider each respective principle and discuss corporate progress today. This blog considers Principle 1: “Businesses should support and respect the protection of internationally proclaimed human rights”, and leads to Principle 2, covered next week.

The Universal Declaration of Human Rights was adopted by the General Assembly of the United Nations in 1948. The key tenet is that all human beings are born with equal and inalienable rights and fundamental freedoms.

Unfortunately such freedoms, even in today’s era of radical transparency, are breached. The International Labour Organisation recently estimated that $150 billion is generated through illegal forced labour annually. They estimate the number of persons in forced labour, trafficked and in modern slavery to be 21 million.

News of large corporates being embroiled in abuse is not uncommon. There are catastrophic cases such as that at Rana Plaza, to the lesser reported cases of land grabs and workplace harassment.

It is clear that there is a risk of human rights abuse through any supply chain. The Ruggie Principles, a UN framework, is targeted at governments and companies to better manage human rights risk. The Corporate Responsibility to Respect Human Rights offers a framework for companies to know and show they are respecting such rights. The Ruggie Principles development provides a useful global human rights standard for business, and encourages companies to assess actual and potential human rights impact, create a statement of commitment to protect these rights and integrate them into core functions and processes.


But with some corporates lacking transparency, how are concerned stakeholders to know who is breaching these commitments?

2015 sees the launch of the Corporate Human Rights Index. This will rank 500 of the world’s largest firms in agriculture, IT, clothing and extractive sectors. Its intention is to make it easy for people to understand corporate human rights performance. Its success will pend on how well received (and followed) it is. But, it heralds the potential for regulators, investors and interested stakeholders to take note of the findings and act. Importantly it is backed by a group of investors led by Aviva, and so capital and financial implications could arise if they are not seen to be doing enough. Assuming this success, it could see an ambition and clear drive to improve among corporates.

Is this progress? As alluded to, such metrics and indexes rely on their use to maintain their success, otherwise it may lose momentum and the attention of corporates. But it is a drive in the right direction. As human rights continues to rise on the agenda, more companies would be wise to consider their own impacts. In our next blog we will examine some ways in which they might choose to do so.

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