Top 10 Emerging Challenges for 2010: Issue 3

Developing standards for human rights due diligence

Nearly 6,000 companies around the world have committed themselves to respecting human rights as part of their involvement in the UN Global Compact. But how much evidence do we have that these or other companies are actually turning voluntary commitments to respecting human rights into actions through due diligence processes?

Consider one aspect of due diligence – measuring impact. Despite the developments in this area as captured in reports like the Guide to Corporate Human Rights Impact Assessment Tools by Aim for Human Rights, work in this area continues to follow many diverse approaches to developing the actual methodologies for carrying out due diligence through human rights impact assessments.

Important initiatives such as the joint IFC, IBLF, UN Global Compact sponsored Guide to Human Rights Impact Assessment and Management are currently being road-tested with companies from various sectors and is due to be finalized in early 2010.

Equally important work by the Danish Institute for Human Rights on Compliance Assessment is helping companies detect human rights risks in their operations. These and other efforts are critical steps forward which build on progress in environmental and social impact assessment work.

Innovation and an element of competition in the development of such tools in the area of human rights are clearly desirable. But so too is an element of quality control. In 2010 and beyond, the need to define more precisely what might legitimately be called human rights impact assessments will become more urgent. Further progress in this area will require companies to be as transparent as possible about their findings (balancing the benefits and constraints of disclosure). More will need to be done to ensure the participation of relevant stakeholders with a particular emphasis on the marginalized or vulnerable groups, and future agreed methodologies will need to be practical and effective from a business perspective.

More and more business leaders and other stakeholders agree that rapid scaling up of progress on human rights due diligence is a key objective requiring concerted efforts. But the chances that this will occur through market forces alone seem remote. More likely is that renewed state interest in non-financial due diligence (partly as a result of the crisis in the financial sector) will extend to the business and human rights debate.

The issue of transparency and inclusion of human rights in sustainability reporting as discussed in two new reports by the Global Reporting Initiative, the Global Compact and Realizing Rights is likely to become increasingly dominant, with strong arguments for a presumption towards much greater disclosure of business impacts on human rights relevant issues.