I have always believed that business has the power to help us solve society’s most pressing challenges. That’s why I worked in corporate responsibility functions in the private sector for more than 20 years. It’s also the reason I became the Chief Executive of the Global Reporting Initiative (GRI), developer of the world’s most widely used standards for sustainability reporting.

Over the past 20 years, corporate responsibility efforts have led to a tremendous amount of good. One particular focus in the effort is human rights. A few years ago, the United Nations issued the UN Guiding Principles on Business and Human Rights (UNGPs). When these were first released, I worked in the private sector and I remember that the business reaction to this was one of confusion. There was a strong sentiment that human rights issues are the concerns of governments, not companies.

Fast forward to today and it’s clear that companies of all types, from around the world, are stepping up to their responsibilities. They are identifying and addressing their human rights impacts following the three pillar framework of “Protect, Respect and Remedy.”

I recently spoke with Caroline Rees, President and Co-founder of Shift, a non-profit organization working to help governments and companies implement the UNGPs.

I started our chat by asking her to explain how Shift is working to change the world.

Caroline Rees: Shift is the leading center of expertise on the UN Guiding Principles on Business and Human Rights. Unanimously endorsed by the UN Human Rights Council in 2011, the UNGPs set expectations for how countries and companies can reduce the negative impacts of business on human rights. The 31 principles apply to all businesses, everywhere in the world, and they are being implemented by companies, governments and their various stakeholders all around the world.

At Shift, we facilitate dialogue within and across stakeholder groups, build capacity to implement the UNGPs and innovate new ways to improve outcomes for people affected by business. We put as many materials as we can into the public domain to support wider progress: from the practical guidance we developed with the UN Global Compact networks and Oxfam on doing business with respect for human rights, to the UNGP Reporting Frameworkand Assurance Guidance we developed with Mazars, to the report we produced with Professor John Ruggie on embedding respect for human rights at FIFA.

Why should companies be concerned about their human rights impacts?

Caroline Rees: For a growing number of companies these days, it’s just the right thing to do. But the business case is compelling for those who need it. Companies that don’t respect human rights face increasing operational risks – disrupted supply chains, operating shut-downs, lost business opportunities; reputational risks from campaigns and media critique; and an inability to recruit and retain the best employees. There is now a rapid increase in regulations requiring company action or disclosure on human rights. And investors are also honing in on human rights in response to demand from millennial clients, who want to see their earnings invested responsibly. Too often, accounting systems fail to capture the bottom line costs that come with poor human rights performance, but research demonstrates how significant they can be. Harder to measure, but also real, are the benefits of respect for human rights – being an employer, investment, partner and brand of choice.

What advice would you give to companies for assessing and managing their human rights impacts?

Caroline Rees: First, have an open and honest conversation with people, from across the business, whose work can affect human rights, to build a broad picture of what could be happening. Inform your analysis by talking directly with people whose rights may be affected, or with their representatives, from employees to supply chain workers, local communities or users of your products and services.

Then prioritize if necessary – but do so based on where the risks to people are greatest, not what’s easiest, nor assumptions about what matters most for the business. Analyses based on business risk can end up missing both risk to people and risk to the company. For example, many companies focus risk assessments on their largest-spend, first-tier suppliers and are shocked when reports emerge of forced or child labor, much further up their supply chains. If you adopt the lens of risk to people, you remove those blind spots.

Most companies that report on their sustainability performance use the GRI Standards to do so. The GRI Standards include the principle of ‘materiality’ to define the issues of most importance to a reporting organization.  Under the UN Guiding Principles, the similar concept is ‘salience.’ Are these concepts compatible with one another and if so how?

Caroline Rees: In principle, I see tremendous opportunity for compatibility: salience offers the method to prioritize human rights, and those can be integrated into broader materiality conclusions that retain a focus on risk to people.

In practice, salience and materiality processes may arrive at the same results, but often fail to do so. The discrepancies can emerge from poor understanding or implementation of the materiality process. For instance, reporting companies may look just at impacts that have already happened. Salience, importantly, is focused forward on potential impacts – or risks.  Risks are informed by, but not limited to, what has happened in the past.

Moreover, the UNGPs are clear that if companies need to prioritize among the human rights risks they find, they should focus first on those that would harm people the most. Those are the company’s salient human rights risks. In practice, many companies skew their materiality analyses towards impacts on business, which, as discussed, is often self-defeating.  And, too many companies ask stakeholders what they think is material without providing any context. So rather than gaining insights that stress-test their own analysis, they get a list of campaign priorities.

Looking at the UN Sustainable Development Goals (SDGs), we see that human rights concerns are embedded throughout the 17 goals and 169 targets. What advice do you have for companies, when it comes mapping their human rights programs to the achievement of the SDGs?

Caroline Rees: The SDGs rest upon respect for human rights – it’s the blood in their veins.  Companies need coherent strategies for how they contribute to the SDGs. They can’t do everything – so they need principled prioritization!

There are two entry points for achieving this – mirrored for both people and planet. The first is to identify the most severe potential impacts on people (and planet) associated with the company’s operations and value chains – their salient human rights and environmental risks, if you will. The company can then tackle those risks in ways that maximize positive outcomes in support of SDGs. Secondly, those companies whose products, services or other innovations can themselves contribute to SDGs need to ensure they are developed and delivered with respect for people and planet.

With this kind of integrated thinking, companies will make a transformative positive contribution to the SDGs.

Originally posted on 3BL Media