How to Write a More Meaningful Update Report Under the French Duty of Vigilance Law

The countdown is on! If you handle reporting for a company covered by the French Loi relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre (the « Duty of Vigilance law »), you know it’s almost time to publish the first annual update on the implementation of your vigilance plan.  

Here are 5 things to keep in mind when preparing the report:

  1. You need to do better in 2019.

    Last year, Shift examined the human rights reporting of the top 20 largest companies in France, and concluded that, before the law came into force, the majority of those companies did not meet the expectations of the UN Guiding Principles on Business and Human Rights (the global authoritative standard). This raises questions about whether they meet the requirements of the Duty of Vigilance law.

    We have begun examining the vigilance plans of those same 20 companies, and early results are consistent with our previous conclusion: most vigilance plans still have a long way to go.

    To improve, encourage your company to align its reporting and actions with the UN Guiding Principles. This can help you meet the requirements of the French law, while positioning the company as a leader on future compliance concerns. You can use the UNGP Reporting Framework’s straightforward questions for guidance.

     (Learn more about how the UNGPs and the French Duty of Vigilance Law are aligned here.)
  2. Clearly identify the company’s salient issues.

    The first step of the human rights due diligence process is to identify the negative impacts a company and its business relationships can have on people. All companies are expected (and, under the French law, required) to disclose their salient (i.e., most severe) human rights impacts. (Learn more about salient issues and why they matter in this video.)

    Prioritizing salient issues allows companies to focus resources on managing risks to human rights, and related risks to the business. When it comes to reporting, it’s also what investors and other stakeholders ­– including directly affected people – want to see companies disclosing.

    If your company hasn’t identified its salient human rights issues, explain any steps taken so far, and offer a preview based on the company’s experience and due diligence to date. After all, nothing is set in stone. As some challenges are met, others arise, and a regular salient issues evaluation will keep you on track. 
  3. Be transparent about where you are doing well, and where you’re falling short.

    Be confident about sharing breakthroughs; everyone needs examples of what works! Be precise about your procedures, initiatives and strategies for ameliorating your most severe human rights risks, and be forthright about things that still need more work.

    As in any other risk management process, no company is ever “done” managing human rights issues. The idea is to deliver authentic reporting by being transparent, demonstrating diligence and improvement through lessons learned, and sharing implementation challenges to contextualize the company’s efforts.

    You may not yet be able to demonstrate robust implementation of the UN Guiding Principles, but you can certainly convey your seriousness to your stakeholders with your commitment to transparency and accountability on human rights.
  4. Get inspired and encouraged by other companies and their journeys.

    Moving forward on the UN Guiding Principles and the French law can take time, but you are certainly not the only company trying to do so. Many companies in and outside of France have already begun pushing the boundaries on meaningfully acting and reporting on human rights issues. Companies like Unilever, ABN AMRO, ING, Ford, Ericsson, Microsoft, H&M, Nestlé and Newmont have made great strides in their efforts to improve their disclosure, publishing generally stronger and more transparent sustainability reports.

    To highlight one example in France, our early research shows that Orange made a significant jump in maturity from previous years. Orange’s vigilance plan is much more comprehensive and transparent than most of its peers’, making clear the company’s process for identifying its salient human rights issues, and implementing its obligations under the Duty of Vigilance law and its responsibility to respect human rights under the UN Guiding Principles.

    If reporting processes spark the right kinds of conversations inside the company and glean meaningful information, they become an integral part of how the company identifies and manages human rights risks. 
  5. View reporting processes as a risk management investment.

    If reporting processes spark the right kinds of conversations inside the company and glean meaningful information, they become an integral part of how the company identifies and manages human rights risks. This process can illuminate potential gaps in management, providing an annual opportunity to assess, redress and improve.

For more guidance, check out Sherpa’s new Guide de Référence pour les Plans de Vigilance , Elsa Savourey’s “Trois Recommendations pour Avancer”, and our most recent report  Human Rights Reporting in France: A Baseline for Assessing the Impact of the Duty of Vigilance Law”.

Most Canadian Mining Companies are Lagging When It Comes to Human Rights Reporting. Here’s Why.

The global mining industry is a large, profitable sector, with a particularly strong presence in Canada. Revenue from the top 40 global mining companies, 15% of which are Canadian, amounted to more than $600 billion in 2017. Additionally, 57% of the world’s public mining companies are listed on the Toronto Stock Exchange (TSX).

In contrast to the global mining industry’s financial achievements, its activities across many regions are often criticized for negative impacts on human rights, including long-term health impacts, violations of indigenous peoples’ rights, forced displacement, and harm to local communities. Canada’s own mining sector has allegedly contributed to numerous human rights abuses around the world (such as increased violence near mining sites, threats to the rights of children, and environmental harms).

Promisingly, however, the Canadian government is increasingly focused on responsible international corporate activity. In January 2018, Canada’s Ministry of Trade announced a new independent function—the Canadian Ombudsperson for Responsible Enterprise (CORE)—to investigate human rights abuses connected to corporate activity abroad. (The Ombudsperson has yet to be appointed.) Additionally, the Ministry created a multi-stakeholder Advisory Body -with John Ruggie (who chairs Shift’s Board of Trustees) serving as Honorary Chair- to advise the government and the CORE on responsible international business conduct. Meanwhile, a proposed Modern Slavery Bill, currently up for discussion in the House of Commons, would require enhanced annual reporting by business, and impose fines on companies not engaging in due diligence on modern slavery and child labour.

The majority of the companies we analyzed are failing to communicate a comprehensive narrative around human rights, cherry-picking instead a limited set of issues.

Given the long history of human rights impacts associated with the mining industry and these changes in Canada’s regulatory framework, Shift has analyzed the human rights disclosure of 18 of the top TSX-listed Canadian mining companies.

Our aim is to highlight opportunities, as suggested by the companies’ own reporting, for improving how they address human rights risks and impacts.

Shift’s methodology is two-fold: first, our team maps companies’ human rights reporting against the expectation that companies know and show how they respect for human rights, as set out in the UN Guiding Principles on Business and Human Rights (UNGPs). We analyze this using the UNGP Reporting Framework, the world’s first comprehensive guidance for company reporting on respect for human rights. Next, we apply Shift’s unique maturity analysis, establishing indicators of mature reporting, and distinguishing laggards from leaders along a tiered maturity scale. While we recognize that reporting is not a mirror of companies’ actual performance in this area, it is an important window into the company’s approach and practices, giving insight into likely strengths, weaknesses, and gaps.

Our team identified notable trends in conducting this research, some of which were comparable to those in previous analyses of other industries available in the UNGP Reporting Database. However, Shift found that the overall maturity of reporting by Canadian mining companies is slightly lower than for other industries already assessed. The majority of the companies we analyzed are failing to communicate a comprehensive narrative around human rights, cherry-picking instead a limited set of human rights issues without justifying their selection, or reporting in general on sustainability and corporate social responsibility issues without acknowledging their specific responsibility to respect human rights.

Similarly, even though some disclosure may highlight policies in place around human rights, or even provide examples that demonstrate the company is addressing some human rights concerns, most disclosure in this group lacks a cohesive narrative, structure, and insight into how companies understand, prioritize, and address risks to human rights connected with their business. Of the 18 companies analyzed, only two solidly attained Mature levels (4 out of 5 on Shift’s tiered maturity scale). Both of these companies illustrated their strong human rights policy commitments, reported on operational-level grievance mechanisms and remedy provided for impacts, and provided robust information about stakeholder engagement practices.

Based on the detailed findings outlined in our report, we produced a set of recommendations, some of which are highlighted below, and most of which can be applied more broadly across industries:

Highlighted Recommendations:

  • Sharing a policy commitment is important, but only a first step: companies should also share how human rights policies are developed and communicated, and build on their policy commitments by identifying their specific salient human rights issues. Additionally, quality disclosure distinguishes between the management of human rights risks and philanthropic or charitable activities—and ensures the two are not conflated.
  • Meaningful reporting is key to gaining stakeholders’ trust in a company’s ability to provide effective remedy. Thus, companies should disclose specific processes employed to address grievances, information about complaint outcomes, and details about independent reviews or oversight of grievance mechanisms.
  • Insightful reporting requires frank and honest sharing of challenges faced by a company, and is bolstered by specific examples that shed light on a company’s approach to addressing them. Honest discussions can provide positive insights and confidence in a company’s ability and efforts to improve their performance, while a defensive narrative can decrease such confidence.

At Shift, we regularly see how reporting processes serve as a powerful driver of improved performance. We hope that these recommendations prove useful to Canadian mining companies, and in turn raise expectations for the sector as a whole, aiding mining companies in Canada and beyond in collectively improving their human rights reporting and performance. Read our full list of recommendations and analysis in, Human Rights Reporting in the Canadian Mining Sector: Maturity Trends and Insights

Gross inequality is the tragedy of the commons we must face up to in 2019

This article first appeared in the Ethical Corporation blog on December  18, 2018

As the year comes to an end, it is only natural to think back to the many business and human rights happenings of 2018: Facebook’s inaction as its platform was used to incite rape and murder in Myanmar; the continuing stories of displaced communities in Thailand and Indonesia, forced labour in nail salons in the UK and child labour in brick production in Uganda and Brazil. The appalling stories of sexual harassment across western workplaces, and gender-based discrimination in China. And the growth in attacks on human rights defenders who speak out against business abuses.

The easy formula would be, of course, to write yet another “top five issues in 2018 and what to expect in 2019” piece. But what do those articles achieve? Year after year, they all come down to the fact that while some issues linger, and some new ones emerge, the fundamental problems for society remain.

So perhaps the end of the year should steer us in a different direction. One that aims not to list out all the individual crises of respect for human rights – past or anticipated – nor the commendable responses from a growing number of companies, but instead to address social inequality as a whole.

I imagine that 15 years ago… (Continue reading…)