The UN Protect, Respect and Remedy Framework is seen as 'soft law' in international terms, strengthened by the support it receives from organisations such as the OECD and the European Union.
Meanwhile, many businesses recognise that managing risk and securing and maintaining a licence to operate depend on:
Human rights extend into many areas where businesses have responsibility or influence. A business can contribute in a positive way - for example through its approach to:
A company which has operations in regions where human rights abuses are widespread may find that its conduct is subject to scrutiny by regulators, governmental agencies, non-governmental organisations (NGOs), socially responsible investors (SRI) and its own employees and customers.
Any actual or perceived association with human rights abuses may give rise to material risks:
In some cases a multi-national company may experience strong pressure to withdraw from a region altogether.
A positive stance on human rights can:
In summary, human rights can have material reputational, operational, financial, and legal implications for a company.
At the same time, the UN Guiding Principles indicate that human rights due diligence can be included in the company' risk management systems, provided that it goes beyond identifying only material risks to the company itself, and thus should include risks to the rights-holders.
December 2014 United Nations Environment Programme Finance Initiative