The business case for human rights; moving past CSR

This piece was written by Aarti Maharaj and originally appeared on ethisphere.com

No matter how you dice it, human rights issues have been, and will always remain, a critical element of a good CSR program. Increasingly, companies are in a position to take a leading global stance; working with local governments to better serve and commit resources to communities in need through robust CSR initiatives. The reality is, while some companies see human rights issues as a “journey” others think of it as a “path.” In essence, having a solid understanding of the human rights issue at hand is one of the pillars of a successful program.

“Having an external view of CSR helps, tremendously when designing strategies to address human rights,” said Ron Popper, head of Corporate Responsibility at the electrical engineering giant ABB, during a roundtable event at NYU Stern’s Center for Business and Human Rights. “You need to consider expectations such as what do all the different stakeholders expect— the government expects companies to pay their taxes while investors want to see a robust risk management framework and civil society wants to make sure the company is not doing any harm.”

Creating a strong message and maintaining a coherent approach to addressing human rights issues across all areas of the business can contribute to a company’s longevity and success. “When it comes to messaging, there is a clear business case and there’s a very clear moral case,” Popper said. “There’s a moral duty of every human being to get a right. If you get it wrong you may face legal, financial and reputational risks.”

Yet, support is needed. Long-term CSR strategies should include human rights policies that are consistently reinforced by leadership and middle management. This concerted effort, which should also include human resources and legal, drives good corporate citizenship and awareness. “You need that commitment— the commitment to walk away from business and explain to investors why you walked away from a million-dollar deal,” added Popper.

On the regulatory front, there’s still much work to be done. U.K. focused legislations for example have started to gain traction with the Modern Slavery Act; the EU non-financial reporting directive, which is slated to go into effect by 2017; and The Companies Act 2006 was amended to encourage companies to report on their human rights performance “to the extent necessary for an understanding” of the company’s overall performance, added Popper.

“Companies need more guidance on this issue,” added Popper. “Translating the U.K. Slavery Act into company policies means that a sensible mix should be created and implemented.”

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Click here for a detailed overview of ABB’s performance and work on human rights.