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BLIHR | Step 4

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STEP 4: Build the business case for your company

When building a business case for human rights within your own company, you might like to consider the following factors, some of which will be relevant to your business:

Meeting Expectations of Buyers or Customers

Few companies can prosper whilst knowingly abusing human rights. Customers expect reasonable steps are taken to avoid any such abuses. Increasingly, such stakeholders expect not just minimum compliance but evidence of positive behaviour.

Reputational Risk Management

Mismanagement of human rights issues can tarnish a reputation for many years and harm business operations. Reputational damage can make it harder to attract customers, secure the necessary investment for growth, attract and retain the best and most committed employees or enter into business partnerships.

Operational Risk – Social Licence to Operate

It is hard for any business to operate against the will of a local population. While the permission of a national government is needed to trade, local authority permission or community approval is also necessary even if not a legal requirement. For example, a mine that pollutes a local environment or exploits a local workforce will soon provoke anger and resentment within the local community. A social licence to operate is not a written document, but without it a company may face anything from demonstrations outside its gates to a material loss in trade.

Legal and Financial Risk

Although human rights law and its relationship to business is still evolving, it is increasingly used in both criminal cases (against companies as well as individual employees) and civil cases (such as compensation claims from workers or customers). The risk of being found guilty of not respecting human rights or being complicit in an abuse perpetrated by others is now a reality in many parts of the world.

Pressure from Government

National governments can play a key role in encouraging businesses to act on human rights. An increasing number of countries around the world have launched national initiatives on corporate responsibility to encourage excellence among their own industries and through this encourage responsible overseas investment. Companies not respecting human rights can have a negative effect upon both home and host country reputation and can undermine their ability to trade freely.

Pressure from Investors

Many institutional investors now actively screen for allegations of human rights abuses by a company they are considering for investment. This is also the case for the major public lending institutions and the major private banks.

Staff Retention and Motivation 

The best companies attract and keep the best employees, and good employees contribute to success. A relationship built on respect for human dignity is likely to be more sustainable and productive for both employer and employee.

Leadership 

Ethical leadership is a key element of sustainable success in business. A corporate governance framework which takes account of human rights sets the tone for business behavior, contributes to the success of the company and helps meet stakeholder expectations.


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