New York, NY.– Shift is proud to be supporting the Finnish Presidency of the Council of the European Union in convening its flagship conference ‘Business and Human Rights: Towards a Common Agenda for Action’, to take place in Brussels on December 2, 2019. This is part of Shift’s broader support to the Ministry for Foreign Affairs on advancing business and human rights as part of the Finnish Presidency.
The Conference will bring together high-level EU Member State representatives, members of key EU institutions, senior representatives from business and civil society to discuss the present and future roles of different stakeholders in accelerating the implementation of the UN Guiding Principles at Member State and EU level.
Key topics will include state financing for doing business abroad, the role of regulatory measures as part of a mix of state measures, and the use of collective leverage and cooperation to enhance human rights outcomes for those most vulnerable to harm, especially human rights defenders.
The full draft program may be found here and will be updated as speakers are confirmed.
Shift looks forward to working with all the key stakeholders involved, in line with our commitment to advocate for the meaningful implementation of the UN Guiding Principles, in order to build a world where business gets done with respect for people’s dignity.
Shift is the leading center of expertise on the UN Guiding Principles on Business and Human Rights. Shift’s global team of experts works across all continents and sectors to challenge assumptions, push boundaries, and redefine corporate practice, in order to build a world where business gets done with respect for people’s dignity. Shift is a non-profit, mission-driven organization, headquartered in New York City. Visit shiftproject.org and follow us at @shiftproject.
About the Finnish Presidency of the Council of the European Union
Together with the European Parliament, the Council is the main decision-making body of the EU. Its presidency rotates among the EU member states every 6 months. Finland holds the Presidency of the Council from July 1 to December 31, 2019, with the motto ‘Sustainable Europe – Sustainable Future’. The Finnish Presidency will be the first to integrate the new priorities of the Strategic Agenda 2019 – 2024 into the Council’s work. Learn more at eu2019.fi
Tracking whether company efforts to prevent and mitigate risks to people from business activities are effective is an integral part of the Corporate Responsibility to Respect Human Rights. Many companies undertake a range of monitoring activities to this end, including assessment of human rights risks, impact assessments, audits and reviews of grievances. While these periodically-used instruments are sometimes successful in identifying abuses and violations, they do not help companies know which of their activities make a difference in the lives of communities, workers and consumers.
Evaluation moves away from just collecting data to examining practices in order to learn and improve. As affected stakeholders are at the center of companies’ responsibility to respect, incorporating the voices of people affected by companies’ actions is vital.
Incorporating the voices of affected stakeholders in this evaluative process has several benefits. First, using insights from stakeholders affected by companies’ efforts has proven to lead to more reliable, trusted and meaningful data. It can reveal which aspects of an intervention have desired impacts on stakeholders, which are the most valued and which need further improvement. Second, paying attention to stakeholder experiences can also contribute to improving a company’s relationship with its stakeholders, and facilitate building trust and respect. Additionally, assessing the value of an intervention from the affected stakeholders’ perspective can help companies make informed choices when designing and implementing programs in the future, preserving valuable company time and resources.
The Valuing Respect Project has mapped three standout examples of companies using affected stakeholder insights to improve their practices, all with positive results.
Active listening. Phillip Morris International, in cooperation with Verite, conducted interviews with smallholder farmers in Malawi to learn about what aspects of its extensive Agricultural Labour Practices program had made greatest impacts on their lives. Using an applied method called Most Significant Change, they collected farmers’ stories. The stories, told and interpreted by farmers themselves complemented an extensive field monitoring system, which relies on field technicians regularly visiting tobacco-growing farms to assess management practices, environmental conditions and labour issues. The combination of periodic assessments with a deep level inquiry into farmers’ experiences brought to life impacts of the program in the voice of real people, and revealed effects of the program on complex issues like child labor.
Taking actions to improve stakeholder relations. A challenging relationship with local communities adjacent to its mining operations has led global mining company Gold Fields to use findings from regular assessments of stakeholder relationships to improve its community engagement strategy. By tracking changes in the communites’ perceptions over time, Gold Fields is able to measure which aspects of its community-company relationships have improved, and which need additional attention. The company has also used the data to redesign its community programs, and to focus energy and resources on what matters to their communities.
Communicating the improvement. Ensuring that affected stakeholders stay informed about how their insights shape companies’ decision making can help companies continuously improve their programs and data. Constituent Voice, a methodology developed by Keystone Accountability builds a continuous feedback loop between a company and its stakeholders as a way to create quality company-stakeholder relationships. On the one hand, the “loop” (a cyclical process of data collection, analysis and reporting and finding solutions) increases stakeholder motivation to participate in the company’s evaluation process. On the other hand, the cyclical nature of the evaluation means that data is collected and analyzed in real time, allowing a company to predict if desired outcomes are likely to be achieved, or a course correction should be considered.
As you can see, well-designed evaluations generate knowledge around what works and what does not, which can then serve as a strong foundation for scaling up successful interventions.
To help expand available research around this concept, the Valuing Respect project team will be publishing a collection of case studies offering a spectrum of methods and lessons early next year. Furthermore, the Project is seeking to test new ways of using stakeholder voice with pioneering companies across different geographies and sectors. Identification, design and implementation of the pilots is currently under way. If you would like to become a part of this group of leading companies, please email me.
“SMEs lack the resources and expertise to manage human rights issues.”
“They’re too focused on small margins to invest in respecting people.”
“SMEs don’t have any leverage.”
“Without regulatory and reputational concerns, there’s no business case for small companies to care about human rights.”
“How can large multinational
companies possibly respect human rights when faced with so many
disinterested SMEs in their value chain?”
These refrains will be familiar to anyone with a passing interest in business and human rights. But our recent work with leading small and medium enterprises (SMEs) suggests they are wide of the mark. In fact, small and medium sized businesses can boast some significant advantages over their larger counterparts when it comes to realizing their responsibility to respect human rights. These include:
A focus on quality of relationships with business partners
SMEs tend to have fewer suppliers and customers, which enables deeper and better-quality relationships. Not only is it more feasible for SMEs to map the businesses in their supply chains, it is easier and more desirable to get to know them. From our discussions with SMEs interested in respecting human rights, we learned they tend to spend a lot more time selecting business partners that are the right fit, putting more up-front investment into finding those who share their values, and will rise with them to the standards they aspire to.
The preference for longer-term relationships tends to make them less transactional, and allows greater scope to integrate human rights issues. Because of their diversity, and often detailed knowledge of local contexts, SMEs may be better able to understand the idiosyncrasies of smaller business partners. Their smaller scale and inclination towards bespoke relationships can lead small businesses to engage directly with suppliers and their workers, in addition to their social audit and certification practices.
These stronger, more nuanced relationships can reap human rights rewards.
Some of the small businesses we talk to report that suppliers
proactively bring up (and seek to work together to address) issues like
child labor, rather than claiming full compliance with buyers’ standards
and hiding the problem.
Shift Advisor Anna Triponel presenting a workshop to SMEs, in collaboration with the International Organisation of Employers. Photo courtesy of IOE
A need to think creatively about leverage
SMEs often lack the cold, hard commercial leverage of larger multi-nationals, and must think more creatively. The business and human rights community talks frequently about moving from a policeman to partnership approach in supply chains. But for smaller retail businesses, partnership with suppliers is a necessity, not a choice, if business is to be done with respect for people.
One medium-sized business we know has rolled out programs on freedom
of association and worker voice in the most challenging contexts,
despite having less than 5% of the product buy from suppliers. They
achieved buy-in through explaining the benefits of the program, and
drawing on the trusted relationship they’d developed, rather than
requiring suppliers to participate.
For small businesses to get traction, prioritizing issues to address is crucial.
We have spoken to businesses in apparel, food, retail and cleaning
sectors that have made progress by focusing on low wages, believing this
will have knock-on effects on a host of other rights.
Sometimes, such commitment implies a willingness to take business
risks. One small commercial cleaning company successfully re-negotiated
client contracts at a higher cost after the owner met personally with
customers to explain that this was the only way to raise wages. Another
CEO of a medium-sized business explained to shareholders that, while
sourcing their key agricultural commodity with higher social standards
would result in a hit to short-term profits, it was still the right
thing to do. This is another clear lesson from SMEs: when top leadership is committed to respecting human rights, there are fewer obstacles to navigate.
A culture focused on people and their empowerment
The old adage that people are a business’s most important asset is even more pronounced for SMEs. The very lack of resources and stretch that skeptics cite as reasons they may find it difficult to respect human rights means that smaller businesses have to respect, trust, motivate and empower their employees to succeed. Committed leaders are able to instill values of empathy and empowerment through face-to-face interaction with employees, listening to them and modelling desirable behaviors. One small business CEO we spoke to claimed doing so boosted creativity and productivity, and gave people confidence to make decisions themselves – not only in their operational roles, but also when it came to human rights.
Another small business owner told us that when workers feel
respected, and identify with managers and others, they will raise issues
and concerns with them. But creating this culture depends on workers’
awareness of their rights. This business owner introduced WhatsApp
groups to disseminate information on worker rights, as well as
fortnightly employee dialogue meetings without management to encourage
peer-to-peer learning and to provide a forum for discussion.
As people are so important to small businesses’ efforts to respect human rights, there is little margin for error in hiring. A number of medium-sized businesses told us they took the unusual step of hiring vocal critics of their companies.
These critics, often younger and greener in business, but with
experience in human rights, became passionate drivers of the agenda
inside the company, and provided a counterweight to their more
Committed SMEs like these are able to approach human rights with the same authenticity they bring to doing business. This can be an asset when encouraging employees to treat each other with respect, or when communicating their values to business partners. But it does raise a challenge if larger clients expect SMEs to implement the UN Guiding Principles formulaically, with a rote policy statement referencing the appropriate international conventions, and a grievance mechanism that checks certain boxes. One SME we spoke to said that producing a policy statement on human rights felt stale and corporate, and was received with suspicion by employees and trusted suppliers. Likewise, interrogating the mother and daughter owners of a micro-business about whether their complaints procedure meets an expected template is hardly productive. Larger customers of SMEs need to enable their smaller business partners to build on their strengths in their own distinctive ways, whether it’s encouraging respect amongst workers, giving employees a voice, or building partnerships with suppliers. In short, we need them to reflect the spirit of the UNGPs.
This isn’t to suggest it’s always easy for SMEs to get it right. Lack
of resources can prove a problem; informality is an enduring conundrum.
Smaller businesses can easily fly under the radar of reputational risk,
and those outside of global supply chains have fewer incentives to act.
At scale, workers in small businesses face more challenging working
conditions and lower wages.
But respect for human rights is tough for all companies. It’s about
changing the way business gets done, and the way people interact in the
workplace and beyond. This isn’t straightforward for businesses of any
size, and those that claim it is are likely only scratching the surface
of what their responsibility implies. Respect for human rights
is not more or less difficult for SMEs than for larger businesses; it is
just difficult in different ways. It’s also easier in certain ways. SMEs should take advantage of that in their bid to respect human rights.