Using Information on Human Rights Impacts to Drive Social Performance

New legislative requirements and stakeholder concerns have driven many companies to implement systems to identify address the potential human rights impacts of their operations. Companies increasingly realize the responsible management of human rights impacts helps mitigate legal, operational, and reputational risks.

That said, as companies begin to assess human rights impacts, they need to avoid the trap of treating these assessments as box-checking exercises. A large volume of information can be gathered through human rights due diligence, but it will be of little utility unless there is a commitment to use the information for more than a single report-writing exercise. Companies like tools, but should be wary of the temptation to feel secure in the utility of information-gathering exercises that are not integrated effectively into management decision-making.

Ultimately, effective consideration of human rights issues needs to be more than a compliance exercise and it cannot be something that is done once a year. It also cannot be the role of a single individual. Companies need to find ways to ensure that the right people across the company feel ownership over and responsibility for the management of human rights considerations.

How can companies begin to address this challenge? Thinking through what types of information are relevant to which types of business decisions and processes is a critical first step. In order to be useful, information regarding the human rights implications of particular business decisions should be: up to date; made available to appropriate internal audiences in a timely fashion; and capable of being integrated into relevant business decision-making.

Not all information will be relevant to each potential decision-maker. For example, an information gathering exercise regarding suppliers’ policies and practices with regard to human trafficking may generate lots of interesting data, but that data will need to be processed in different ways to be useful. Personnel responsible for generating public disclosures regarding human trafficking will need the data delivered in one format, while a regional manager overseeing supplier-related risks may only need to know which suppliers in his/her area of responsibility require immediate engagement. For one exercise, a spreadsheet of information may be useful, but that delivery format may undermine the utility of the information for someone who needs to take quick action on one specific issue.

There are resource requirements associated with ensuring that human rights-related information is appropriately formatted for each relevant internal audience. But the time and funds necessary to ensure that the right information can be effectively integrated into management decision-making will ultimately pay dividends through effective risk management.

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