11

Dec 2014

Human Rights: The Key to Changing Business as Usual?

As we celebrate Human Rights Day and 64 years since the UN adopted the Universal Declaration of Human Rights, I believe that now is an ideal moment to reflect upon both the achievements of the past and the future path of human rights.

To many people business and human rights do not sound like natural companions. In part this stems from the legacy of the argument made famous by Milton Friedman that the only responsibility of a business is to maximize profits. Thankfully however, measures such as the adoption of the 2011 UN Guiding Principles on Business and Human Rights have done much to alter perceptions and offer guidance to companies.

Last week, the UN hosted the 3rd Forum on Business and Human Rights, gathering government, industry and civil society representatives in Geneva to analyze, discuss and influence the policies and practices used by companies to improve their human rights impacts and manage their commercial risks.

Going further, I believe that commitment to human rights has the potential to be the key to changing both how corporations do business and how their operations affect the lives of billions. Take a moment to consider what matters most to a multinational company. You may suggest that besides profit, what they really value is their license to operate, employee relations, customer loyalty, investor confidence and brand reputation. It may then surprise you that human rights have a growing influence over all these factors. Understanding how your business affects human rights and using that knowledge to shape appropriate policies and practices is crucial to achieving what should be the goal of all corporations — sustainable growth.

The challenge then becomes what practical steps can be taken to address human rights issues in order to make a difference and gain a competitive advantage?

My advice to organizations I work with is always to be proactive rather than simply reactive when it comes to human rights issues. After all, the important process of improving company policies and practices must be carried out without having to be prompted by a labour strike, factory collapse or other crisis. Furthermore, if something does go wrong, you will be able to deal with the issue much more efficiently if you are prepared. All too often companies express their support for promoting human rights without actually adapting their corporate strategies or policies accordingly.

Avoiding this business as usual approach, where human rights become a useful PR buzzword, requires a new commercial approach to risk and growth. This is known as impact assessment. This methodology involves a company assessing their actual and potential impact on human rights through their business activities, adopting appropriate policies and reporting on progress. This sounds simple enough but in practice embedding human rights requires commitment at the highest levels and effective communications with all stakeholders.

Some pioneering companies are already innovating by integrating human rights into their overall business strategies and leading the way with inspiring campaigns and employee engagement programs. Unilever’s CEO Paul Polman has backed up his call for a new model of sustainable capitalism with the company’s Sustainable Living Plan. What strikes me most about this policy is that it not only seeks to improve Unilever’s impact across its operations and extended supply chain but that it also aims to double turnover within ten years. I believe that promoting human rights helps break the cycle of short-termism, which is always good business. As the Unilever example shows, this approach can have far-reaching consequences for both a company’s overall business strategy and corporate identity.

There are of course many other measures that a proactive company can and should take, for instance developing and utilizing industry-level guidelines, like the Equator Principles for finance. However, ultimately there is no substitute for stakeholder engagement with local communities and business partners through a mixture of dialogue and due diligence.

Crucially I would urge business leaders that this call to address human rights is not a passing fad. In fact, a 2013 report by Deloitte found that 36% of millennials believe improving society should be the primary purpose of a business. This means that by ignoring human rights, companies risk alienating the emerging generation of consumers. On the other hand, engaging in the development of innovative solutions promises sustained growth and long-term success. When confronted with this stark choice, there is only one option that makes sense.

Ultimately, businesses are best placed to address human rights matters efficiently as no one can know their environment, employees and challenges better than them. By doing so, they will not only improve their legacy and increase their long term potential but also create a new and better “business as usual” that would ensure a promising future for human rights.

Source: Huffington Post