Fundamental HRDD Instruments: Integrating Human Rights and Labor Rights into Corporate Sustainability
The integration of human rights and labor rights into corporate sustainability agendas is increasing as regulations tighten, stakeholder demand action, and international norms shift. Businesses have an integral role in protecting, promoting, and respecting human rights and it is long past due that fulfillment of this role is expected of the private sector.
Key Instruments
When it comes to integrating human rights into business practice, there are three leading instruments that are key to successful and meaningful implementation. These instruments are formally recognized by the international community and are often referenced by policymakers and in global regulations: the Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework (UNGPs), the "the International Labor Organization (ILO), Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration) and the OECD Guidelines for Multinational Enterprises (OECD MNE Guidelines). While all of these instruments offer unique perspectives on business and human rights, they are aligned in approach and application. In this blog, we will explore these three integral instruments and explore their implications for corporate human rights initiatives.
Establishing Baseline Understanding
The UNGPs are a set of principles designed to address businesses’ responsibilities regarding human rights. They were formally adopted in 2011 and are founded on three pillars: (1) the State duty to respect, protect, and fulfill human rights, (2) corporate responsibility to respect human rights, and (3) access to remedy. In more detail, the UNGPs emphasize that first and foremost, governments are responsible for safeguarding against human rights abuses incurred by third parties, which includes the private sector. It is recommended that governments create and enforce appropriate laws, policies, and regulations that ensure the protection of essential human rights.
The UNGPs expand further and describe the responsibilities expected of businesses to respect human rights which includes avoiding the infringement on human rights and addressing adverse impacts in which the business is involved, either directly or indirectly. The ways in which businesses are expected to fulfill this responsibility is through human rights due diligence (HRDD) which is the process to identify, address, prevent, mitigate, and account for adverse impacts they may have caused. Finally, it is the role of both states and businesses to ensure that affected individuals of human rights abuses have access to effective remedy.
While the UNGPs are not legally binding, they are widely recognized and referenced as the authoritative global standard for addressing adverse human rights impacts linked, directly or indirectly, to business activity. They emphasize the importance of both voluntary actions implemented by companies as well as legal frameworks as established by states and governing bodies.
The MNE declaration was first adopted in 1977, most recently revised in 2017, with the intention of providing a set of guidelines for responsible business conduct related to human rights and decent work. The declaration offers unique recommendations to multinational enterprises (MNEs) including governments, employers, and workers on how to promote human rights and labor rights throughout the value chain. It focuses on five areas including (1) general policies, (2) employment, (3) training, (4) conditions of work and life, and (5) industrial relations.
The MNE declaration includes implementation tools and mechanisms including regional follow-up mechanisms, guidance for promotion at the national level, company-union dialogue guidance, and interpretation procedure into local languages. These mechanisms are designed to promote the uptake of the principles outlined in the declaration.
General policies: MNEs should operate in a manner that positively contributes to economic and social progress while respecting national and international regulations and standards. MNEs should also engage in dialogue with local communities and stakeholders to ensure that business activities are mutually beneficial.
Employment: Businesses should create quality jobs and promote equal opportunities for workers, with an emphasis on non-discrimination, fair wages, and safe working conditions for all employees within the value chain.
Training: MNEs are encouraged to invest in training and professional development of their workforce including upskilling and reskilling, career advancement opportunities, and the pursuit of further education.
Conditions of work and life: MNEs should advocate for the improvement of workers’ living and working conditions and ensure alignment with national and international regulations and standards, regarding international labor standards.
Industrial relations: Supporting the rights of workers to join and form trade unions, engage in collective bargaining, and participate in dialogue with management on issues that may be affecting them.
The OECD guidelines are a set of recommendations from governments to businesses on how to conduct business responsibly. These guidelines were first adopted in 1976 and have been updated several times since. Their main objective is to encourage positive contributions that MNEs can make to positive economic, environmental, and social progress while minimizing adverse impacts. They cover several areas related to responsible business conduct including human rights and labor rights, climate change, technology, business integrity, and supply chain due diligence. MNEs are encouraged to disclose information about their business activities to stakeholders including governance metrics (ownership, governance structures, financial performance).
Outlined in the guidelines is a standard procedure on how to conduct due diligence in order to identify and address adverse impacts. While these guidelines aren’t independently legally binding, they are referenced in mandatory due diligence regulation including, but not limited to, the EU CS3D and CSRD.
Overlaps & Common Themes
While each instrument brings its own approach to implementation, there are common elements that the three reference.
Most importantly, they are all centered around the assumption that business activities may impact people and the planet–both positively and negatively– and as a result, they are uniquely positioned to identify and address these impacts.
All three set out a framework in which businesses can interact with–regardless of size, sector, operational context, and structure–to avoid and address adverse impacts and contribute to general sustainable development.
These instruments agree that the way in which businesses meaningfully address adverse impacts is through full supply chain due diligence and that businesses should effectively provide remedy in cases of adverse impacts.
The ILO, OECD, and OHCHR continue to strengthen their collaboration and coordination to help governments, businesses, civil societies, and other stakeholders do their part in the implementation of responsible business conduct to contribute positively to society. The coherence and standardization between the instruments are integral in effective adoption throughout the international community.
Looking Forward
Integrating human rights and labor rights into corporate sustainability is no longer a mere option but an essential expectation. The UNGPs, MNE Declaration, and OECD Guidelines provide a robust framework for businesses to navigate this complex terrain, offering guidance on how to respect, protect, and promote human rights across their supply chains. These instruments offer detailed places to start, no matter the maturity of business sustainability initiatives. By embracing these instruments, companies not only fulfill their ethical and legal obligations but also contribute to a more just and equitable world where human rights are respected. As the global community continues to tighten regulations and stakeholders demand greater accountability, the integration of human rights into business practices will remain a critical component of corporate sustainability. The future of responsible business lies in this alignment, where profit and purpose coexist, fostering a more equitable global economy.
Need help building and implementing a well-designed and intentional HRDD governance structure and plan into your corporate sustainability strategy? Uplift’s experts are equipped to help you on your journey. Schedule a free consultation today.
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