Human Rights
Human rights are defined in a series of UN conventions and agreements, including the International Bill of Human Rights and in the International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work. Human Rights aim to secure dignity and equality for all.
Human rights risks and impacts are not a separate class of E&S risks or impacts, entirely distinct from the more familiar types of E&S impacts fund managers already include in their due diligence. Rather, E&S impacts can become human rights impacts when their impact on individuals or groups reaches a level that negatively affects the ability of those individuals or groups to enjoy their basic human rights, as defined by internationally accepted standards. The UN Guiding Principles Reporting Framework website provides a list of internationally recognised human rights, offers a brief explanation of each, and provides examples of how a business might be connected to negative impacts on these rights.
The UN Guiding Principles on Business and Human Rights (UNGPs) are the authoritative global framework on how to prevent and address impacts by business on people. The UNGPs are based on the UN ‘Protect, Respect and Remedy’ framework and are structured around the three pillars of that framework. Importantly, this structure recognises that both governments and businesses have essential but distinctive roles and responsibilities to prevent harm to people that could arise from business activities. The UNGPs identify specific steps that both states and businesses should take to meet those responsibilities.
The UNGPs have brought clarity to both the scope of responsibility for businesses in managing their human rights impacts (‘what’ human rights impacts to look for, and ‘where’ to look) and the practical steps companies should take to ensure that they are respecting human rights (‘how’ companies should assess and address these issues). Leading international frameworks, such as the IFC Performance Standards and the OECD Guidelines for Multinational Enterprises, have aligned their expectations of companies with those of the UNGPs. The UNGPs include the following core concepts:
Businesses should prevent and address negative impacts on people that they are, or may be, connected to through their own activities and through their business relationships (e.g., supply chains, security providers, government actions to acquire land for private sector actors).
The UNGPs apply to all businesses, regardless of size, geography or industry; no ‘sign-up’ mechanism is required.
Businesses could be connected to an impact on any internationally recognised human right, through their own activities, or through those of their business relationships.
Compliance with local law may not be sufficient, if local law (or its enforcement) falls short of international human rights standards.
While many businesses may also have positive impacts on people, these cannot ‘offset’ business’ responsibility to address any negative impacts it may be involved with.
Companies should undertake human rights due diligence (key features of which are described in the sections that follow) to identify and address negative impacts they may be connected to and should provide remedy for impacts that they cause or contribute to.
