HRDD 101: Responsible Business Conduct: Where Human Rights Fit In
The world is changing and the way businesses operate is too. Consumers are becoming increasingly aware of the impact their purchases have on the world, and human rights are a growing concern. The practice of making choices on what we buy based on the impact those products have refers to the trend of Conscious Consumerism which continues to grow, as shown by current market trends. Simultaneously, laws and regulations that promote more responsible business conduct are also on the rise. These factors contribute to the reality that businesses need to be more responsible and sustainable to maintain their market access. This is where Human Rights Due Diligence (HRDD) comes in.
But what exactly is HRDD? It's a process and framework businesses can employ in order to identify, assess, and mitigate potential human rights risks within their own operations and supply chains. The graphic below describes the six components of HRDD, in alignment with the OECD guidelines. It’s important to note that HRDD isn’t a one-time thing–it is an iterative process that relies on continuous improvement. It is also not a one-size-fits-all approach, HRDD is intended to be designed to meet the unique needs of your business depending on what human rights issues are most relevant.
The Business Case for HRDD
Workers' Rights: The true objective of HRDD is to protect and advance workers rights. Businesses are uniquely positioned to address this issue and can have a large impact on the livelihood of workers in their value chain.
Conscious Consumption: People today want to buy from companies they trust, and that includes trust in their ethical conduct. Businesses that participate in HRDD demonstrate their commitment to human rights signals to consumers. .
Supply Chain Resilience: HRDD provides visibility into potential supply chain disruptions and can help maximize the efficiency and efficacy of the supply chain. HRDD allows businesses to identify differences in their supply chains and create culturally relevant stakeholder engagement depending on where they operate.
Legal Compliance: Human rights law is increasingly requiring companies to have human rights due diligence in place. Governments around the world are starting to hold businesses accountable for human rights violations in their supply chains. Being proactive with HRDD demonstrates your commitment to ethical practices before regulations become stricter.
The Regulatory Landscape:
Regulations like the recently passed EU Corporate Sustainability Due Diligence Directive (CS3D) mandate companies to have HRDD programs in alignment with the OECD guidelines (see figure above). The scope applies to both internal operations and throughout their supply chain. Similar regulations are being passed in other countries, such as Germany and Canada. Additionally, the U.S. already has in place human rights regulations such as the Uyghur Forced Labor Prevention Act (UFLPA) and the California Transparency in Supply Chains Act (CTISA). HRDD is a global imperative.
What Businesses Need to Know:
Here's the key takeaway: Don't wait for non-compliance. Implementing HRDD goes beyond a moral imperative and is required to continue to conduct business.
Taking Action:
Embed Responsible Business Conduct into Policies and Management Systems: establishing a clear company policy on human rights that aligns with the UN Guiding Principles on Business and Human Rights (UNGPs).
Figure Out What's Important: Identify what human rights issues are relevant and salient to your unique business.
Identify & Assess Potential Risks: Evaluate the potential human rights impacts associated with your operations and suppliers by conducting a Human Rights Impact Assessment (HRIA)
Develop a Plan: Create a concrete action plan for supplier engagement to address identified risks and prevent future ones.
Communicate your Progress: Regularly assess the effectiveness of your HRDD efforts and transparently communicate results publically.
Preparing for the Future:
By implementing HRDD, businesses can mitigate risks, build stronger reputations, and contribute to a more sustainable future where workers’ rights are protected. Remember, HRDD isn't a one-time event; it's an ongoing process that requires continuous monitoring and improvement.
Think of HRDD as a Win-win:
Workers' rights: Workers’ human and labor rights are protected throughout the supply chain leading to lower levels of turnover and higher employee engagement.
Stronger reputation: Stakeholders–including consumers, investors, and employees–want to do business with companies that prioritize human rights.
Reduced risk: Identifying and addressing risks proactively saves workers from experiencing negative human rights impacts from your business which can in turn protect your company from legal and reputational issues.
Smoother operations: By ensuring ethical practices throughout your supply chain, you can avoid disruptions and delays.
A positive impact: You're contributing to a world where workers’ rights are fulfilled and protected.
Here's the Bottom Line:
HRDD isn't just about ticking boxes. It's about building a responsible business that contributes to a better future. It may seem daunting at first, but Uplift’s team of experts are equipped to help businesses of all sizes implement HRDD practices.
Stay tuned for an upcoming blog post where we'll dive deeper into the HRDD framework and how your business can get started on this important journey!
Learn more about our Human Rights Services.
The Uplift Agency
Uplift builds strategies, programs, and communication campaigns that advance ESG in workplaces, supply chains and communities.
We know how to navigate the road ahead because we’ve already been down it – 90 percent of our team has led environmental or social programs in corporations or nonprofits. Because ESG is all we do, our services are more comprehensive and integrated than most firms.
