In the era of hyper-connectivity, businesses transcend borders like never before, creating the need to ensure human rights are respected and protected. With these new economic frontiers and strategic opportunities, however, the complexity and opacity of global supply chains make this a significant challenge.
What are Human Rights?
The basic idea of human rights states that people have a right to be treated with dignity. The UN states that human rights are those that are inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, or any other status. Specific to the responsibilities of businesses, the UN Guiding Principles on Business and Human Rights are a set of guidelines for both governments and corporations to prevent, address, and remedy violations. Official guidance for how businesses can implement the UN Guiding Principles is included here: The Corporate Responsibility to Respect Human Rights: An Interpretative Guide.
Why Integrate Human Rights into Your Business Practices?
Manage Risk
Prioritizing human rights not only builds trust among stakeholders, but it can also help to mitigate regulatory, reputational, and financial risks. For example, several brands have recently come under fire for failing to protect their workers from labor abuse in Myanmar (i.e. Inditex, Bestseller, Primark, H&M), creating scrutiny from regulators and investors whilst simultaneously damaging their own reputations among consumers. Investing in robust human rights procedures and due diligence processes, in addition to maintaining transparency through regular reporting, enables companies to adapt to evolving societal expectations and mitigate emerging risks as economies transform globally.
Build Trust
Proactivity to ensure adherence to human rights in supply chains also bodes well for companies as they seek to attract talent and prepare their organizational approach for a more informed and conscious consumer. On talent, a study from Edelman stated that an employee is 14.5 times more likely to work for a company that publicly supports human rights. From a customer standpoint, a 2021 survey of 27,000 global consumers found that 88% prioritize buying from companies with ethical sourcing strategies.
Case Study
Tony Chocolonely is a Dutch chocolate producer. The company's commitment to traceability is one of its core sourcing principles. Tony Chocolonely uses a software system called BeanTracker, which facilitates the digital logging of data collection throughout the entire cocoa supply chain, from the cooperative to chocolate production. It incorporates a monitoring tool that allows realtime tracking of bean movement. Supply chain members input data on bean volumes, both incoming and outgoing, providing insights into the origin, flow, and quantities of beans. This enables the company to establish a transparent and accountable supply chain. The company plans to integrate additional data sources, such as GPS mapping data, into the BeanTracker system to gain comprehensive insights into the origin and conditions for cocoa farmers. Their ultimate objective is to establish the BeanTracker as a scalable solution that sets an industry standard for bean-to-bar traceability, promoting full responsibility throughout the supply chain.
The company also has a Child Labor Monitoring and Remediation System (CLMRS) in place across 7 cocoa cooperatives that they source from in Ghana and Ivory Coast. In 2022, the company found 387 cases of illegal child labor and remediated 221. The company states: “Most big chocolate companies do not know how many cases of illegal labor there are in their cocoa supply chain, so they cannot work to remediate them. But because we have a 100% traceable supply chain (as validated by PwC in annual reports) we can take 100% accountability for eradicating the problem.”
Take Action
Beyond the sole consideration of human rights because it’s simply the right thing to do, incorporating these principles into corporate strategy will better position companies for a rapidly changing world that is increasingly demanding accountability and trustworthiness. With B Lab rolling out new standards relating to human rights, companies will need to:
Have a human rights policy in place
Ensure their entire workforce understands their respective human rights impacts
Establish a strategy and action plan to manage those human rights impacts
Promote traceability and human rights by working directly with supply chain partners.
The UN Guiding Principles provide official guidance and an effective starting point for companies to ensure human rights are respected and protected. If you would like even more support on your human rights initiatives, please feel free to reach out to Everoot – we are here to help!
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