Build a Just and Inclusive Economy

Human Rights

Respect human rights and proactively avoid causing or contributing to adverse human rights impacts through a company’s own business activities or business relationships. Use a lens of saliency to inventory the intersection between company operations and sustainable business priorities to identify opportunities that advance social progress for women, people of color, and other historically disadvantaged and underrepresented groups.

Companies will align activities to the United Nations Guiding Principles on Business and Human Rights by establishing formal policies and management systems that are designed to prevent or mitigate adverse human rights impacts linked to business activities and relationships across the value chain. Specifically, companies will:
 

  • Establish a formal policy commitment to respect the human rights of direct and indirect workers that is aligned to internationally recognized human rights standards and embed that commitment across the company and value chain (e.g. employee training, supplier engagement, etc.)

  • Implement a human rights due diligence (HRDD) process, which includes: 

    • A Human Rights Impact Assessment (HRIA)

    • Performance tracking through key indicators

    • Communication of the HRDD process and company performance

    • Engagement of stakeholders at each stage of the HRIA process

    • Integration of the results in the prioritization of action, business decision-making and resource allocation

  • Formalize and make accessible to all potential impacted stakeholders independently run grievance mechanisms for reporting human rights violations

  • Establish systems of remedy and immediately address any existing adverse impacts to human rights linked to business activities and partnerships across the value chain 

  • Examine the intersection between company operations and sustainable business priorities to identify opportunities to move the company beyond an approach solely focused on “do no harm,”  including through active investment in the advancement of social progress for women, people of color and other historically disadvantaged and underrepresented groups

Companies expand and evolve the application of material and salient human rights risks by integrating findings from Human Rights Impact Assessments (HRIAs) into strategic planning, risks management and identification of business priorities. Specifically, companies will:
 

  • Regularly review, reassess and publicly disclose the results of periodic HRIAs 

  • Leverage the results of the HRIA to inform priority actions, business decision-making and resource allocation

  • Demonstrate ongoing action via robust human rights management systems to remediate identified salient human rights impacts

  • Integrate the results of periodic HRIAs into enterprise risk management and human capital management strategies, taking steps to eliminate or adjust business activities and partnerships across the value chain to avoid adverse impacts to human rights

  • In addition to policies and systems focused on respecting human rights of all impacted stakeholders, increase investment in programs that advance social progress for women, people of color and other historically disadvantaged and underrepresented groups

Companies continue to expand the application of human rights management systems into relevant parts of the business and across the value chain as the company’s business impacts shift and evolve over time. Companies conduct strategic planning and decision-making across the business proactively and consistently consider and avoid business practices and partnerships across the value chain that may increase the likelihood of adverse human rights impacts to people. Companies regularly disclose actions taken to remediate adverse human rights impacts and the systems in place to reassess existing or potential salient human rights concerns on an ongoing basis. The company has transitioned from a human rights strategy focused solely on “do no harm” to one that actively respects human rights and values and invests in the well-being of individuals and communities impacted by corporate operations and decision-making, with particular focus on women, people of color and other historically disadvantaged and underrepresented groups. 

Getting to Root Cause

The results of a comprehensive Human Rights Impact Assessment (HRIA) can often identify a diversity of existing and potential impacts to people across a company’s operations and value chain. A company’s response to those impacts will be similarly diverse. It will almost always require a deeper analysis of root causes to understand underlying factors that may be contributing to or exacerbating negative impacts to the human rights of workers or the community. Root cause analysis can often unearth systemic issues (e.g. historical culture of sexism or racism, government corruption, unfair land tenure regimes, etc.) or human rights abuses that are so widespread (e.g. modern slavery) that the actions or investment of a single company is not enough to realize lasting and systems-level change. In these instances, companies must leverage these findings to prioritize opportunities for multi-stakeholder collaboration, policy advocacy and broader community investment. Additionally, companies must examine the effectiveness of their individual program investments to identify opportunities for achieving multiple-benefits. 

For example, according to the World Bank, nearly 2 billion people are still unable to access and participate in the formal financial system--most of whom are women. Social stigma and systemic discrimination against women are among the root causes of financial system exclusion. Limited access to formal financial systems can contribute to higher rates of poverty, violence against women and dependence of female workers upon their male supervisors and family members. Working with peers, suppliers, unions, local government and community organizations, companies can shift this dynamic through collaborative advocacy to achieve policy change—but also via seemingly simple solutions. The Better Than Cash Alliance is a collaboration of governments, companies and international organizations seeking to underscore both economic and social benefits of moving toward electronic payments. Digital wage payment methods offer benefits of increased efficiency and cost savings for suppliers, while simultaneously drawing women into the formal financial system in a way that ensures greater financial independence, improved safety and the ability to save and invest for their future and that of their family. 

Getting Started

This section of the Ceres Roadmap 2030 identifies the foundational steps companies can take to begin implementing the actions needed to build a just and inclusive economy.
 

✓ Engage Role Players

To capture the full breadth and depth of the risks and opportunities related to building a just and inclusive economy, companies should consider the role of various business units across the value chain and regularly engage with business unit leaders to analyze the intersection between human rights and human capital risks and opportunities and their processes.  Upstream, human rights and human capital related opportunities may take the form of engaging tier 1 and tier 2 suppliers to evaluate and remedy human rights impacts. Within operations, these opportunities may take the form of addressing the wage gap or providing unconscious bias training for employees. Engaging business unit leaders will uncover better solutions and make the process of establishing workforce accountability easier. Concurrently, business unit leaders and senior management need to establish fluid lines of communication and disseminate key risks and opportunities into clear messaging that will engage board members. Complementary board oversight and accountability from the top down will support the integration of sustainability priorities across the business, informing strategic and annual planning and ensuring the proper allocation of resources for achieving stated goals. 
 

✓ Connect the Dots

Building a just and inclusive economy starts by understanding the business’ fundamental relationship between people, labor and human rights.  Using the lens of saliency, which helps to identify those issues with the greatest potential for adverse impacts on people, and applying it to business strategy and decision-making, reinforces a company’s values and strengthens the fabric that holds the company together.  
 

✓ Establish Policies

Companies just getting started will want to first establish company wide policies that support the intention to respect fundamental human rights, applying the same commitment to both direct and indirect employees across the value chain. Corporate policies should align to the fundamental human rights as identified in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and the Universal Declaration of Human Rights. These policies and commitments should then be made part of human rights and human capital management systems aligned with the guidelines set forth by the UN Guiding Principles on Business and Human Rights. 
 

✓ Build a Management System Designed for Evolution

While the policies and management systems are intended to be permanent, the reality is that human rights and the potential for impact to people across the value chain is constantly changing. Integrating salient issues into the risk assessment and decision-making processes is essential. However, decisions made outside of the company, by other parties and in other regions can have downstream impacts on the company and its people.  Therefore, specific processes, assessments and key performance indicators require periodic review to ensure there is accurate management and monitoring on what is most salient and an ongoing understanding of how impacts may evolve over time.
 

✓ Pay Taxes

To improve the foundation of our economic and social systems, companies should pay their fair share in taxes to make sure that funds are available to support equitable programs.  As disruptions impact the global economy, it is critical for governments to have the funds available to absorb shocks and invest in a sustainable path towards recovery.  When companies deliberately reduce their tax obligation, it helps their bottom line, but contributes to the fragility of the system as a whole.
 

Disclosing Progress

Disclosure establishes accountability, provides a foundation for engagement and serves as a platform for demonstrating priorities, process and progress. See the Transparency and Disclosure section of Ceres Roadmap 2030 on how to make all of your disclosures complete, credible and decision-useful.

The Global Reporting Initiative (GRI) Standards and the Sustainable Accounting Standards Board (SASB) are two disclosure tools widely recognized as standards for comparable sustainability disclosure. Disclosure related to corporate efforts to build a just and inclusive economy should also be guided by an additional disclosure framework that helps to strengthen corporate disclosure and meet the expectations of stakeholders, in particular investors: the United Nations Guiding Principles (UNGP) Reporting Framework. 

The UNGP Reporting Framework, published in 2015, provides comprehensive guidance for companies reporting on management approaches and systems for respecting human rights in direct operations and across value chains. Most significantly, the reporting framework introduces the concept of saliency, calling on companies to first assess priorities through the lens of risks to people (rightsholders) versus risks to the business. Through this change in perspective, companies are able to identify and act on the human rights challenges that present the most severe risks to people.

Supported by investor interest, companies should prioritize disclosure of the following specific metrics:
 

  • Equal Employment Opportunity Data - Year-over-year data collected on equal employment opportunity (EEO-1 Form for U.S. employees) disaggregated by gender, race, ethnicity and job category 
  • Wage Data - Data detailing wages, benefits and pay ratios, disaggregated by gender, race, ethnicity and job category
  • Tax Payments - How the approach to tax is embedded within the organization and country-by-country reporting of tax-related information for each jurisdiction in which the organization operates. For more information go to GRI 207: Tax Guidance.


Additional Disclosure Resources

Ceres: Disclose What Matters -  Analyzes the sustainability disclosures of the world's largest companies and can help companies bridge the gap and provide executable, relevant information to investors.

Workforce Disclosure Initiative - Provides a common set of questions through an annual survey for companies from all sectors to disclose their management of human rights and human capital issues across the value chain. The WDI platform allows companies to demonstrate to their investors, clients and other stakeholders how their approach to workforce management is aligned with their business strategy.

Resources

With respect to human rights, there are many programs, resources and materials available to help guide companies. Below is a list of some key resources:

Universal Declaration of Human Rights - A milestone document in the history of human rights. Drafted by representatives with different legal and cultural backgrounds from all regions of the world, the Declaration was proclaimed by the United Nations General Assembly in Paris on December 10, 1948.

International Labour Organization’s Declaration on Fundamental Principles and Rights at Work - Adopted in 1998, the Declaration commits member states to respect and promote principles and rights in four categories: freedom of association and the effective recognition of the right to collective bargaining, the elimination of forced or compulsory labour, the abolition of child labour and the elimination of discrimination in respect of employment and occupation.

United Nations Guiding Principles on Business and Human Rights - Provides an authoritative global standard for preventing and addressing the risk of adverse human rights impacts linked to business activity.

OECD Guidelines for Multinational Enterprises - Provides non-binding principles and standards for responsible business conduct in a global context consistent with applicable laws and internationally recognised standards.

OECD Due Diligence Guidance for Responsible Business Conduct - Provides support to enterprises on the implementation of the OECD Guidelines for Multinational Enterprises by providing plain language explanations of its due diligence recommendations and associated provisions. 

Human Rights Business Dilemma Forum -  Provides case studies about key risks so that companies are better equipped to prevent adverse human rights and support efforts made by companies to respect human rights in their operations and supply chains.

Corporate Human Rights Benchmark - A collaboration led by investors and civil society organisations to assess 200 of the largest publicly traded companies in the world on a set of human rights indicators.

Companies in Action

Citigroup conducts human rights due diligence assessment and extends commitment to client transactions. Since the launch of its statement on human rights in 2007, Citi has made subsequent updates, engaging with stakeholders, conducting human risks analysis and due diligence and aligning with leading guidance, such as the UN Guiding Principles on Business and Human Rights. The company is committed to respecting human rights across its operations and supply chain partners and extends this commitment into its financing and client transactions. The company uses its environmental and social risks management (ESRM) policy, launched in 2003, to assess and manage risks consistently and evaluate client projects against environmental and social standards, including human rights issues. The ESRM team screens transactions during the initial marketing phase—when the viability of deals is first being explored—to identify any potential risks. Since its development, Citi has updated its ESRM policy to include “Areas of High Caution”—Citi’s salient human rights risks—that require a closer due diligence approach.  These include conflict risk, indigenous people, resettlements and critical habitats. Citi’s due diligence approach prioritizes addressing risks based on their severity relative to other human rights risks, in alignment with the UN Guiding Principles. The ESRM policy prohibits financing to any projects where the due diligence process has indicated a risk of harmful or exploitative forms of forced labor or child labor. Once an issue has been identified, Citi conducts a thorough review to understand the client’s commitment and capabilities to mitigate or avoid the impact. In 2019, the ESRM team screened a total of 557 transactions. Of those, 58 were flagged for additional due diligence for potential human rights risks. Going forward, Citi commits to identifying salient human rights risks in sectors beyond those usually reviewed through its ESRM policy.

HP Inc. establishes human rights council and strong due diligence process. Leading companies conduct regular human rights due diligence assessments to identify, measure and mitigate risks across the value chain and also actively disclose the details of management systems in place for responding to the issues identified. To strengthen the management of human rights issues across the company, in 2017 HP established a human rights council that is chaired by the head of HP's Human Rights Office and includes key members from the senior management team. The council meets twice a year to coordinate on due diligence and performance improvements relating to respecting human rights, along with approving the annual human rights assessment, which includes identification of salient risks and impacts. The company’s due diligence process looks to identify and address actual and potential issues across the value chain, following a risk-based approach commensurate to the severity and likelihood of the impact. As an example, in response to reports highlighting impacts with migrant workers, HP in 2014 developed the Foreign Migrant Worker Standard in partnership with nonprofit Verité to address the issue of forced labor among migrant workers, becoming the first company within the industry with such expectations. 

Ford leads the auto industry in becoming the first company to conduct a human rights saliency assessment. Leading companies are realizing the importance of examining impact and risk from both the perspective of materiality (starting from a point of risk to business) and saliency (starting from a point of risk to people). Ford has long analyzed and reported on its human rights performance, conducting around 50 assessments since 2004. Responding to the growing calls for a focus on saliency, the company conducted its first saliency assessment in line with the UN Guiding Principles Reporting Framework in 2018. Building on this best practice, the company outlined the results of this assessment in its annual sustainability report, highlighting the 10 most salient human rights issues for the company and disclosing its action plans for addressing them.

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