Author: admin_shift

The complete letter is published on the Business & Human Rights Resource Centre website and is signed by the Business & Human Rights Resource Centre, the Danish Institute for Human Rights, the Institute for Human Rights and Business, the International Corporate Accountability Roundtable, Oxfam International and Shift.

Also see: Our short framework for action for any company seeking to contribute to sustainable development

September 13, 2017

An open letter to United Nations Secretary-General António Guterres and United Nations Private Sector Forum 2017 Participants:

As global business, government and civil society leaders convene for next week’s United Nations Private Sector Forum to discuss financing the 2030 Agenda, it is difficult to overstate the challenge that has brought them together. Ensuring the eradication of poverty through sustainable, climate conscious, and rights-respecting global development is an ambitious universal agenda. We urge participants to ensure that respect for human rights is an integral part of all actions towards achieving the Sustainable Development Goals (SDGs).

The SDGs “seek to realize the human rights of all” and the 2030 Agenda for Sustainable Development is explicitly grounded in the Universal Declaration of Human Rights and international human rights treaties, among other instruments. The Agenda emphasizes the critical role that human rights play in the achievement of sustainable development in all its three dimensions – economic, social and environmental.

To put this in context, between 21 and 48 million people are estimated to work in forms of modern slavery; around 85 million of the estimated 168 million child laborers are in hazardous forms of work; and more than 2.3 million people die annually as a result of occupational accidents or work-related diseases. Poor communities lose livelihoods, access to healthcare and clean water when land is taken or used without respect for their rights in the name of agriculture, construction, mining and other activities. Ending such abuses would enable these people to live their lives with dignity, with improved access to education, medical care, food, and many other SDG targets.

Businesses must put these realities at the heart of how they define their contribution to Agenda 2030. Doing so represents the private sector’s single biggest opportunity to advance human development today…

Read the complete letter here.

Also see this Viewpoint as a PDF.

What’s the current problem with the way some organizations are talking about business contributions to sustainable development – and what’s a better path forward?

1. The problem: misunderstanding the nature of respect for human rights

The Sustainable Development Goals (SDGs) are setting a new and increasingly accepted basis for companies to stake out a position on how they are responsible and sustainable.

Yet with 17 Sustainable Development Goals and 169 related targets, there is a risk that companies simply repackage what they already do in the wrapping of the SDGs, or focus on certain SDGs based on the ease, rather than the impact, of those choices. This is not to suggest that businesses should address all goals. Rather, we believe they need a principled process, that reflects international standards, to identify the SDGs through which they can maximize their contribution.

Human rights are embedded throughout the SDGs. Yet many organizations that are telling business how to think about this – and many leaders in business itself – are failing to understand the place of respect for human rights in this broader framework. 

Respect for human rights tends to be seen as something necessary but basic, from which leading companies have already moved on to more innovative, leadership-oriented, collaborative initiatives. (This vastly overestimates progress on human rights within the business community.) Moreover, because respect for human rights is an expectation of all companies, it is often seen as merely a matter of compliance and risk management, and distinct from initiatives that are characterized as transformative.

These pervasive assumptions fail to understand:

• that implementing respect for human rights is an integral part of doing business, not something you do and then move on from;
• that implementing respect for human rights is not just a matter of compliance to be achieved simply through audit and data tracking, but instead requires capacity building, innovation, collaboration and leadership;
• that respect for human rights is not just a “do no harm” proposition, but drives positive change in people’s lives, with many positive outcomes for sustainable development;
• that this positive impact of respecting human rights can drive transformative change at scale, in particular through collaborative uses of leverage across value chains that have the power to improve the lives of millions of workers and community members*;
• that respect for human rights must also permeate any and all other initiatives a company undertakes to contribute to the SDGs, from philanthropy to shared value initiatives, environmental projects to innovative financing, and workforce engagement to anti-corruption efforts;
• that respect for human rights by business is the essential key to unlock achievement of many SDGs, and without which they cannot be achieved. 

2. The answer: a true understanding of the power of respect for human rights

In fact, when companies address negative impacts on human rights they can achieve resoundingly positive outcomes. Companies and states that view business respect for human rights in a compliance/risk/do no harm box will therefore miss its relevance and power as part of an SDG strategy.

Instead, companies should see it in a similar way to their environmental contributions to the SDGs, which typically have two parts:

1. every company can contribute positively to sustainable development by reducing the negative impacts on the environment associated with its business – including across its value chain;
2. some companies will also be able to develop new and innovative products, services and ways of doing business that can further contribute to improving the environment and combating climate change, and should do so wherever they can.

This logic works equally well for the “people part” of the SDGs:

1. every company can contribute positively to sustainable development by reducing the negative impacts on people’s human rights associated with its business – including across its value chain;
2. some companies will also be able to develop new and innovative products, services and ways of doing business that can further contribute to improving people’s lives, including their enjoyment of human rights, and should do so wherever they can.

Implementation of the UN Guiding Principles on Business and Human Rights – the global standard in this field – is the basis for addressing part (a). It must also inform any initiatives a company undertakes for part (b) – in relation to both planet and people – so they too are carried out with respect for human rights. 

3. The way forward: a holistic framework for contributing meaningfully to the SDGs

By adopting the same two-part approach to how they address the “people part” of sustainable development as they do to addressing the “planet part,” companies now have a holistic vision for how they can develop strategies to support the SDGs, which embeds the right understanding of the role and the power of respect for human rights. This view is illustrated in the graphic to the right.

This framework offers a straightforward way for any company to work out how it should and can contribute to the SDGs:

1. Analysis: The company maps its most severe actual and potential negative impacts on people and on the planet across its operations and value chain – that is, its salient issues in each dimension;
2. Delivery: The company then maps those priorities to the SDGs and identifies how it can maximize positive outcomes for people and planet by reducing these impacts, including through innovation and collaboration;
3. Analysis: The company maps the ways in which the nature of its business, skill sets and market position may enable it to innovate additional positive contributions to the SDGs;
4. Delivery: The company identifies how it can deliver on that potential, alone or in partnership with others, through processes that respect human rights and the environment.

Read more: Our November 2016 position paper to the Business and Sustainable Development Commission on business, human rights and the Sustainable Development Goals

*[1] The International Labour Organization estimates that in just 40 countries representing 85 percent of world gross domestic product there are 453 million formal sector jobs related to global supply chains. Realizing the rights of these workers would constitute a transformative change. This is relevant not only to SDG 8 on decent work and economic growth; the opportunities unlocked for people when they have decent jobs with living wages include a route out of poverty (SDG1) with improved access to food (SDG 2), to health (SDG 3), to education (SDG 4), and to equality of opportunity (SDGs 5 and 10).

On February 15, 2017, Shift Chair and author of the UN Guiding Principles John Ruggie delivered a keynote address to the G20 Labour and Employment Meeting in Hamburg. He was accompanied by Shift’s President, Caroline Rees. The complete text of Professor Ruggie’s address is below.

Also see: Shift position paper on the connection between the UN Guiding Principles and the Sustainable Development Goals | Our short framework for action that any company should and can follow to contribute to the SDGs

I am deeply honored to have been asked to join you here this morning. And I wish you every success on your critical mission to promote socially sustainable supply chains. 

This subject could not be more important – for individual countries that participate extensively in global supply chains, and for the future of the open global economy itself. These vast and complex networks crisscrossing the world are the nexus between investment and trade. They are vulnerable today, and the global economy along with them. However, their effective management can turn them into significant leverage points to make globalization work better for all. Addressing this challenge requires the kind of collective leadership that only the G20 can provide.

As in a volcano, a potential rupture has been building up steam for quite some time. As far back as January 1999, then UN Secretary-General Kofi Annan warned, in a World Economic Forum address, that unless globalization has strong social pillars it will be fragile: “vulnerable to backlash from all the ‘isms’ of our post-cold war world: protectionism; populism; nationalism; ethnic chauvinism; fanaticism; and terrorism.” He added that if we cannot make globalization work for all, in the end it will work for none. Today we neither need, nor should we want, any additional evidence of Annan’s prophetic insight. We see it all around us.

I propose to do three things this morning. The first is to describe briefly some key dimensions of global supply chains. Second, while acknowledging the enormous economic contributions they have made, I also flag several fundamental problems. Third, I explain how the UN Guiding Principles for Business and Human Rights contribute to achieving socially sustainable supply chains.

Here is an example of a global supply chain network. Like some of you, I have an iPhone 6. It was designed by Apple in the United States, and assembled by Foxconn, a Taiwan based company at its operations in China. Along the way, the components were produced by 785 suppliers in 31 countries. Some are multinationals in their own right, with their own supply chains. It turns out that this is at the smaller and simpler end of the global supply chains spectrum.

It should be stressed that global supply chains are rapidly ceasing to fit the traditional profile of suppliers in the Global South and buyers in the North. One of the most profound global geo-economic shifts today is the rapid increase of transnational corporations based in emerging markets and developing countries. In the year 2000 they numbered just 12 on the Fortune Global 500 list. In 2010 the number had risen to 85. By 2025 their number is expected to reach 230, or nearly half of the entire FG 500.

One consequence of the global fragmentation of production processes is that world trade in intermediate goods is now greater than all other non-oil traded goods combined. This is due to the multiple times intermediate goods are imported, a step or two is taken in their processing, and then they get exported again as intermediate goods to the next stop, where the cycle is repeated until final assembly. Even more striking, about 80 percent of global trade (in terms of gross exports) is now linked to the production networks of multinational firms. Thus, trade is no longer simply arms length exchange between countries, governed by international trade law and policy. Much of it takes place among corporate entities, determined by their optimization strategies.

On the employment side, according to an ILO report one out of seven jobs worldwide is related to global supply chains. That number does not encompass so-called non-standard forms of work, which can range from casual and temporary employment to forced and bonded labor, nor does it include informal work at the bottom of supply chains, often done by women and children in the home. In the 17 G20 countries for which there is data, the percentage of the labor force in global supply chains is even higher: more than one job in five.

When we add up these numbers and recognize that those workers may have families who depend on them, we may well be talking about one billion people worldwide involved in and directly affected by global supply chains. So in terms of orders of magnitude, the challenge of securing socially sustainable supply chains ranks high on the must-do list.

This model of distributed production and service provision has transformed the world for the better. In developing countries, it has helped pull more countries and people of poverty, and faster, than in any other era of history. It has provided work opportunities for women that they lacked previously. In the industrialized countries, it has kept consumer prices low and helped keep inflation in check. And it has generated extraordinary technological innovations across all spheres of the human experience.

So why is there such concern today about the sustainability of this system? What’s the problem? The answer is that an enormous governance gap has been created: between the scope and impact of economic forces and actors, and the capacity of societies to manage the adverse consequences. The gap will be narrowed one way or another: either through more effective cooperation or through rollback, otherwise known as protectionism. I vote for cooperation, and I hope you will as well.

One corrosive consequence of this governance gap has been rapidly escalating income inequality within countries, even as income inequality among countries has declined.

Another such consequence is what the G20 and the OECD call “base erosion and profit shifting,” or BEPS. This refers to the highly sophisticated means whereby many multinationals are able to keep their effective corporate tax rates as low as the single digits through a combination of transfer pricing and booking foreign direct investments in tax havens, where the bulk of the profits then reside.

Former US Treasury Secretary Lawrence Summer, once a vigorous advocate of unfettered globalization, now writes that this is “a significant problem for the revenue capacity of states” —and he means all states. As a result, tax burdens increasingly fall on small businesses that cannot avail themselves of such strategies, and on individual households, while governments are strapped for resources to provide sufficient levels of public goods.

Neither the income inequality nor the base erosion and profit shifting associated with the current structure of corporate globalization are socially sustainable.

Other significant risks exist. In some developing countries, the further down the layers of suppliers one moves the more precarious work can be. Risks are worsened where governance is weak or poor: health and safety, inadequate wages, the worst forms of child labor, bonded labor and in some sectors slave labor. Multinationals are reasonably good at monitoring top tier suppliers, but in many cases no one really knows where the bottom is. That is not sustainable either.

At the same time, in some industrialized countries recent developments demonstrate what happens when the needs of people who have been left behind by offshoring and rapid technological change are ignored, on the assumption that somehow the magic of the marketplace will self correct. Wrong. It is the global marketplace that becomes the target of their animus. This too poses a serious risk to sustainable global supply chains, indeed to globalization writ large.

So where do we go from here? What opportunities exist to generate positive change? One promising scenario is sketched out in the report of the Business and Sustainable Development Commission, launched at Davos last month. The Commission includes CEOs of leading companies headquartered in China, India, Saudi Arabia, South Africa, Turkey, as well as the US and Europe.

The Commission’s research suggests that achieving the UN Sustainable Development Goals (SDGs) could add $12 trillion a year to business savings and revenue in just four economic areas alone: food and agriculture, energy and materials, health and wellbeing, and sustainable cities. The Commission estimates that the economic prize from fully implementing the SDGs could be two to three times bigger, if the benefits are captured across the whole economy and are accompanied by higher labor and resource productivity. I’m not a mathematician, but those seem like big numbers!

The Commission lays out six action paths, one of which is to “Rebuild the Social Contract.” Where does this rebuilding begin? Here is what the Commission says:

Treating workers with respect and paying them a decent wage would go a long way to building a more inclusive society and expanding consumer markets. Investing in their training, enabling men and women to fulfill their potential, would deliver further returns through higher labor productivity. And ensuring that the social contract extends from the formal to the informal sector, through full implementation of the UN Guiding Principles on Business and Human Rights, should be non-negotiable.

This brings me to my final point. What are these Guiding Principles, and where did they come from? I had the honor to develop them over a six year mandate as the UN Secretary-General’s Special Representative for Business and Human Rights. They comprise three sets of mutually reinforcing principles: the state duty to protect against human rights abuses by third parties, including business; the corporate responsibility to respect human rights; and the need for greater access to effective remedy by those who have been adversely affected by business conduct.

The UN Human Rights Council unanimously endorsed the Guiding Principles in June 2011. They constitute the only official guidance the Council and its predecessor, the Commission on Human Rights, have issued for states and business enterprises on their respective obligations in relation to business and human rights. The five core sponsors of the resolution to endorse the Guiding Principles were Argentina, India, Nigeria, Norway and the Russian Federation.

UN High Commissioner for Human Rights, Zeid Ra’ad Al Hussein, describes the Guiding Principles as “the global authoritative standard, providing a blueprint for the steps all states and businesses should take to uphold human rights.” They have been widely drawn upon in standard setting by other international organizations, governments, businesses, law societies including the International Bar Association, and even FIFA, the global governing body of football. The China Chamber of Commerce of Metals, Minerals & Chemical Importers & Exporters has issued detailed recommendations for the overseas conduct of Chinese mining companies based on the UN Guiding Principles. The Indian government’s Voluntary National Guidelines embrace key elements of the UN Principles, and its top 500 listed companies must report against how they respect human rights. Among the G20, Germany, Italy, the UK and the US have issued National Action Plans to implement the Guiding Principles. Argentina, Brazil, Indonesia, Japan and Mexico have committed to do so or already have begun the processes.

These examples demonstrate that a growing number of governments, businesses and other actors recognize how the UN Guiding Principles can play a central role in achieving socially sustainable business – and by extension – sustainable development.

First, the Guiding Principles help companies to identify human rights risks along their entire supply chains, through an approach that reduces harm and creates social value. They do so by outlining the components of a human rights due diligence process enabling companies to manage the adverse impacts on people of their own conduct and their business relationships. The components include companies assessing potential and actual impacts, and acting on that information.

Second, the Guiding Principles highlight the many ways in which governments can incentivize responsible business conduct and protect people from human rights abuse by business. This requires a smart mix of policies at the legislative and regulatory levels, as well as governments taking these factors into account when they support or otherwise do business with business.

Third, the Guiding Principles identify key means through which both business and governments need to ensure access to effective grievance procedures and remedy for the inevitable scenarios where people – typically the poorest and most vulnerable – suffer the results of abusive business practices. This involves judicial and non-judicial state-based processes, as well as operational level grievance mechanisms companies can establish or participate in.

In short, the Guiding Principles provide a roadmap for helping to bridge the governance gaps and imbalances that must be addressed for global supply chains and globalization itself to become socially sustainable.

Much is at stake for countries and people. But we can make globalization work for all by putting human dignity at its center. And you, as member states of the G20, have a unique opportunity to take the lead by supporting action on the important agenda that is before you at today’s session, and urging businesses and governments to advance the further implementation of the Guiding Principles.

Thank you, and once again the very best wishes for success.

The following is the full text of the keynote address delivered by Shift Chair and author of the Guiding Principles John Ruggie on November 14, 2016 to the UN Forum on Business and Human Rights in Geneva, Switzerland.

Also see: Our short framework for action that any company should and can follow to contribute to sustainable development

I suspect that many of you here today were surprised, as I was, by the results of the US presidential election. I also suspect that many of you were surprised, as I was, by the results of the Brexit referendum. Perhaps we should not have been.

As far back as January 1999 former UN Secretary-General Kofi Annan warned, in a World Economic Forum speech, that unless globalization has strong social pillars it will be fragile and vulnerable —“vulnerable to backlash from all the ‘isms’ of our post-cold war world: protectionism; populism; nationalism; ethnic chauvinism; fanaticism; and terrorism.” He specifically appealed to the business community to step up and play its role in achieving a socially sustainable globalization.

Clearly, we must redouble our efforts. Equally important, we have to maximize the effectiveness of our efforts to make globalization work for all because, as Annan has also said, if it doesn’t, “in the end it will work for none.”

We neither need, nor do we want, additional evidence of his prophetic insight.

In keeping with the urgency of this challenge, my focus today is on the relationship between the Sustainable Development Goals and the UN Guiding Principles on Business and Human Rights. And my message is that for business to fully realize its contribution to sustainable development, it must put efforts to advance respect for human rights at the heart of the people part of sustainable development.

The Guiding Principles set out the global standard of what businesses must do to embed respect for human rights throughout their operations and business relationships. The SDGs, in turn, are a vision statement and action plan for achieving social and environmental sustainability on our planet. Logically and in practice the two should be inextricably linked, with the Guiding Principles setting the tone for the social components of the SDGs to which business is expected to contribute.

Given the sheer ambition of the SDGs and the pressing need for all sectors of society to contribute to their realization, I urge businesses everywhere to help meet our common existential challenge.

At the same time, I want to flag an emerging risk I see in some of the SDG narratives within the business community that may weaken the link between the Guiding Principles and the SDGs, or possibly sever it altogether. This can occur when businesses are encouraged to believe that advancing respect for human rights involves merely doing no harm, and that to do positive good they need to go beyond respecting rights. This view misses one of the most important features of respecting human rights. When companies drive respect for human rights across their own operations and their global value chains, they generate an unprecedented large-scale positive impact on the lives of people who may be most in need of the benefits of sustainable development.

Is there a risk of weakening the link between the Guiding Principles and SDGs? And if there is, how should it be dealt with? Let me begin by summarizing some of the emerging narratives that are the source of my concern.

First, the General Assembly resolution adopting the SDGs in its operative part makes only a passing reference to relevant standards and agreements that address corporate accountability for human rights harm, including the Guiding Principles. This may be misread by some to imply that these standards matter less than getting business to engage in the SDGs on any terms. Of course that was not the intent, as the Resolution’s section on implementation makes abundantly clear. But it is an impression that we are starting to see gaining ground.

Second, quite a number of business strategies for contributing to the SDGs draw on the Creating Shared Value paradigm, made famous by my Harvard colleague Professor Michael Porter. In a Harvard Business Review article Porter defines creating shared value as “the policies and operational practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates.” It stands to reason that any such win-win situation should be prized and seized upon, and the more of them that can be created, the better.

However, Porter clearly stipulates that “creating shared value presumes compliance with the law and ethical standards, as well as mitigating any harm caused by the business.” But isn’t the business and human rights challenge precisely about the fact that this presumption fails to hold in far too many circumstances? Why else would we have needed the Guiding Principles? Why else is there a move in several countries, including France and Switzerland, to make human rights due diligence mandatory? Why else are some governments and many advocacy groups pushing for the adoption of an international business and human rights treaty? In short, business strategies drawing on this paradigm need to take into account that its underlying presumption is problematic in practice.

My third concern stems from findings in early consultancy reports. Most companies surveyed indicate that they are not planning to assess their possible contributions against all 17 SDGs but, in the words of one report, that they will “cherry-pick.” On what basis will they pick? The answer is: materiality, or put simply, business risks and opportunities. But business and human rights in the first instance is not about what is material to the firm: it is about the salient risks, or most severe potential harms, that business activities and relationships pose to people. Salient risks may turn out to be material to the business if they are left unattended. But a traditional materiality test will often miss them. Nor can business initiatives to promote social goods substitute for failing to address salient risks. This is a fundamental difference between human rights and climate change: in human rights there is no equivalent to buying carbon offsets.

A fourth and related reason for my concern stems from the way in which strategies for contributing to the SDGs are being framed by some who are advising business. The claim is made that these strategies are so novel that they will generate “transformative” and even “disruptive” business models. Indeed, one report suggests that the SDGs invite a shift “from responsibility to opportunity.” It posits what it calls a “maturity continuum,” with responsibility at one end, and transformative opportunity at the other. Now, who would not prefer to be considered “mature” and leave behind the irksome task of being responsible for one’s own negative externalities in the quest for new business opportunities? Of course, no such maturity continuum exists. In fact, getting respect for human rights right is itself radically transformative and disruptive.

My fifth and perhaps most critical concern is the assumption embedded in this whole discourse that respecting human rights is merely about stopping a negative practice, lacking the more inspirational virtue of making a positive contribution. This rests on a false dichotomy, between compliance-based views of ‘respect’ on the one hand, and voluntary efforts to ‘promote’ human rights on the other. Ironically, this is the same false dichotomy on which the old CSR model was based—a dichotomy the Guiding Principles left behind long ago.

Consider this example. Companies have learned that non-discrimination in their personnel practices involves much more than adopting a few rules to regulate unacceptable behavior. It involves instituting a positive culture of inclusion and diversity, of empowering people whose potential previously might have been discounted, of providing equal pay for equal work and equal opportunity for advancement. It requires extensive training and other support systems that did not exist before. These are not negative acts. They are powerfully affirmative, transformative and even disruptive of traditional practices.

One of the Guiding Principles’ most transformative contributions is the requirement that companies’ responsibility to respect human rights is not limited to their own operations, but extends to human rights impacts connected to their products and services throughout their network of suppliers and other business relationships. The GPs recognize that companies do not control every dimension of these relationships, so they introduce the concept of leverage. Where people’s human rights are adversely affected by activities in a company’s value chain, the company’s responsibility is to use its leverage to try to improve those people’s situation. Where the leverage is insufficient the company is expected to try and increase it, perhaps in collaboration with other companies or different stakeholders. I venture to predict that this is where business can make its single biggest contribution to the people part of the sustainable development agenda.

Why? Because the labor of roughly one in six workers in the world today is part of multinational value chains. This doesn’t count those in “informal” work, which may include in-home subcontractors. It does not count non-standard work, such as temporary work or forced labor. Also reflect on the fact that many of the workers in multinational value chains have families and live in communities, which suffer the ill effects or reap the benefits from how those workers are treated. The numbers add up very quickly to reach perhaps two billion people or more — out of the total world population of 7.4 billion. Now that is scale.

A concerted effort by business to respect the human rights of workers in their global value chains would have two transformative effects. First, by helping to ensure that people are paid a living wage, that men and women workers are treated with equal dignity and provided equal opportunity, that their rights to organize and bargain collectively are respected, their health and safety on the job and in their communities protected, and so on, business would uplift those people’s situation significantly. It would enable them to lead decent lives and contribute to their own wellbeing as well as their country’s development — while also increasing the global consumer base of business.

I hasten to add that this focus involves not only SDG 8 (decent work and economic growth). It would also have positive effects on SDG 1 (poverty), 2 (hunger), 3 (health), 4 (education), 5 (gender equality), 6 (water and sanitation), 10 (reduced inequalities), 11 (sustainable communities), and in some respects even SDGs 14 and 15 (life below water and on land). I strongly suspect that the scope and scale of the positive impacts this would unleash significantly outstrip many of the initiatives that currently dominate business attention and resources.

A second benefit of focusing laser-like on respect for human rights in global value chains would be to help manage the growing threat that globalization itself faces from populist forces in industrialized countries. Whether on the political left or right, these populist forces involve people who have been left behind by the liberalization and technological innovations that have made it possible to slice and dice production processes into the most minute of parts, each located where labor costs are cheapest or the regulatory context is the most malleable. Surely a more level playing field is a better answer to this challenge than more Brexits and other such electoral surprises.

So to conclude, of course businesses should look for every opportunity to create shared value and find other ways to contribute to the SDGs. So much hangs in the balance. My concern is that the greatest potential contribution business can make risks getting discounted in the minds of too many, as they slide along an imaginary continuum from responsibility to opportunity.

In contrast, my proposition to business — and to you all — is that far from being at the “immature” end of a transformative trajectory of business models, respect for human rights, respect for the dignity of every person, is at the very core of the people part of sustainable development. And as if that alone were not enough, it is also the key to ensuring a socially sustainable globalization, from which business stands to be a major beneficiary.

Also see: Our short framework for action that any company should and can follow to contribute to the SDGs

Update: In January 2017 the Business and Sustainable Development Commission published a position paper on business’s role in sustainable development, Better Business, Better World. That position paper draws on a report authored by Shift and strongly supports our message that respect for human rights must be at the heart of any company’s efforts to contribute to the Sustainable Development Goals.

The UN Sustainable Development Goals (SDGs) are currently a big feature on global agendas — and they include a call to business to play a role in their implementation. Since the establishment of the SDGs, however, many companies have asked us what their connection is to the UN Guiding Principles on Business and Human Rights. Are the SDGs an alternative to or substitute for the Guiding Principles? Are they separate ideas with separate implementation needs?

The simple answer is no: contributing to the SDGs is neither a substitute for, nor unrelated to, implementation of the Guiding Principles. In fact, the two are interwoven in the same fabric. For business to realize its full contribution to sustainable development, it must put efforts to advance respect for human rights at the heart of its strategy.

More clarification on the connection between the SDGs and the Guiding Principles is available in a November 2016 paper published by the Business and Sustainable Development Commission and authored by Shift. Its key points include:

1. When talking about the “planet” part of sustainable development, companies focus above all on how they can reduce their negative impact on the environment, and the important positive outcomes that will generate. But when it comes to the “people” part, most companies dismiss discussions about reducing negative impacts as mere “compliance” and focus their energies on strategic philanthropy, social investment, shared value and similar efforts. 
2. This misses the point about respect for human rights. When companies drive respect for human rights across their operations and value chains, they can have a sustained and large-scale positive impact on the lives of the people most desperately in need of development. “Diversity and inclusion” programs address problems of discrimination, yet we recognize the positive outcomes they bring for so many groups in the workplace and broader society. It’s no different when it comes to other human rights.
3. Moreover, under the Guiding Principles all companies have a responsibility to use their influence to drive respect for human rights through their value chains. When we consider the millions of people working in and affected by those global supply chains, for whom abuses of their human rights are a barrier to even basic opportunities, we start to see the true potential for how every company, large and small, can make a major contribution to sustainable development.

In September 2016, I gave a webinar to the World Business Council for Sustainable Development about the connection between the SDGs and the Guiding Principles. See my explanation below.

by David W. Rivkin, President IBA

Also see: News announcement of publication of IBA Practical Guide | Practical Guide in our resource library 

New! On November 1, 2016, the IBA published a reference annex to the Practical Guide for business lawyers.

On May 28, 2016, the International Bar Association (IBA) adopted the IBA Practical Guide on Business and Human Rights for Business Lawyers. The Practical Guide is the product of extensive research; its insights are founded on consultations with lawyers across practices and bar associations spanning the globe. As IBA President, it has been my distinct privilege to support John Sherman and his dedicated IBA Working Group in their tireless efforts.

I firmly believe that the Practical Guide marks a watershed in the disciplines of human rights and corporate law – disciplines we now recognize as related and interwoven.

In the Practical Guide, we sought to, “enable lawyers around the world to understand how best they can serve their clients,” at a time when successful businesses must navigate a multitude of risks grounded not only in government regulations, statutes and judicial decisions, but also in ethics, public expectations and international norms. Faced with this rapidly evolving business environment, it seemed only natural that the role of lawyers should evolve accordingly.

The Practical Guide considers this evolution in terms that are clear and reasonable. The widespread endorsement of the UN Guiding Principles on Business and Human Rights has practical implications for business lawyers across disciplines. These implications are neither revolutionary nor vague. Corporate governance may include systems to manage human rights risks; non-financial reporting may include disclosure on well such systems work; resolving disputes effectively may turn on non-judicial grievance mechanisms and a more holistic consideration of business interests; and, contracts may be drafted to bring precision and certainty throughout global value chains. The IBA will shortly publish a Reference Annex, also being prepared by the Working Group headed by John Sherman, which explores these and other implications of the Guiding Principles in more detail.

The overarching message for lawyers as business advisors is straightforward and powerful. We cannot now – if we ever could – conceive of our role exclusively as technical specialists in black-letter law. Rather, our clients need us to be wise counselors, who integrate legal, ethical and business concerns in all our advice. Embracing that role should not, of course, come at the expense of our entrenched and unique professional obligations to our clients. But we serve our clients best by ensuring that we are able to advise them on what is legal and what is right.

The Practical Guide also sheds light on the responsibilities of law firms as business enterprises in their own right. The issue is complex. While the Practical Guide emphasizes the importance of clients’ right to counsel and the independence of lawyers, it also properly speaks about law firms’ responsibility to consider the Guiding Principles in their own operations and value chains. Integrating respect for human rights across legal advice and law firm operations – all the while balancing our professional ethical obligations – will take time and effort. The Practical Guide marks the crucial first step of the journey.

I hope and expect that the Practical Guide will serve as a beacon for lawyers across disciplines and across the world. I, for one, am committed to building on its lessons at the IBA and integrating them in my practice. At Debevoise & Plimpton, we have already begun to implement the Practical Guide with the launch of a dedicated Business Integrity Group, which integrates human rights, environmental and anti-corruption advice across our practice areas. I have been delighted by our clients’ enthusiastic response to this effort to reduce the legal and financial risk that arises from the leading integrity standards like the Guiding Principles, the US Foreign Corrupt Practices Act and the UK Modern Slavery Act.

As a practitioner and policy maker, I am very optimistic about the future of business and human rights as a legal discipline. It will not be long, I suspect, before all lawyers strive to be the wise counselor to our clients. Our profession will long be indebted to the Practical Guide as we forge ahead to become more than technical specialists and endeavor always to be guardians of our clients’ integrity.

David W. Rivkin is President of the International Bar Association and Partner at Debevoise & Plimpton. | Read David’s full bio