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22 Dec 2022

Phil Bloomer, Executive Director

Business & human rights in 2023: Signals for hope during hard times

Accelerated climate breakdown, unsustainable inequality, open attacks on democracy, global economic slowdown, and heightened geopolitical conflict are enough to make us question if humans have the wit to build a better future, possibly any future.

But as Paul Gilroy said regarding the anti-racist struggle in the UK: “I don’t think we can afford the luxury of pessimism”. Here are five optimistic signals from 2022 for what our movement for human rights in business can do in 2023 to help drive urgent and necessary transformations in business and markets.

First, rapid transformations will depend on our politicians and business leaders knowing there is public hunger for change. Our diverse movement is gaining strength and voice that can shift the mind-set of lawmakers and business leaders of good faith. Our movement has sought and achieved better alignment with global justice movements that see business change as imperative: trade unions, Black Lives Matter, #MeToo, Fridays for the Future, and the Indigenous rights movement, to name a few. Unusual collaborations have grown with more responsible business and investor voices calling in unison for better enforced regulation, in alliance with civil society. In 2023, our movement’s drumbeat must grow louder to create space for enlightened politicians to move decisively to reshape markets to deliver shared prosperity, and climate security.

Secondly, there were major regulatory advances throughout 2022 seeking to put human rights at the heart of business and fundamentally change the calculus of risk in board rooms across the globe. The struggle to land an effective EU Corporate Sustainability Due Diligence Directive (CSDDD) is iconic and will continue throughout 2023. This is complemented by other EU-wide initiatives alongside national regulatory advances in Germany, Netherlands, and Norway. Beyond Europe, examples are as plentiful: the Colombian Ombudsman, a proposal in the Korean Congress on due diligence reporting in conflict, Japan’s new due diligence guidelines, a draft Mexican Corporate Responsibility and Due Diligence Law and major Inter-American Court rulings.

A third reason for optimism is the growing pressure on investors to demonstrate responsibility for environment, society, and governance (ESG). With smart regulation and public pressure we have an opportunity to re-purpose finance so it delivers on its emancipatory potential to drive a just energy transition and insist on living wages for women workers in global supply chains, for example. The French-led proposal in the EU Council to leave financial sector inclusion in the CSDDD to the discretion of Member States would be a blow to workers, communities and the environment suffering the harm of irresponsible investment. In this $40tn sector, marketing claims of many funds to be ‘ESG-compliant’ are rightly met with public scepticism. This is especially true when these portfolios contain companies, like Prada and Glencore, that our KnowTheChain benchmark and Transition Mineral Tracker indicate have little regard for risk of egregious abuse.

Fourth, 2022 saw human rights gains in some key sectors, even as there remains room for considerable improvement. In 2023 our movement has a critical opportunity to hold together on climate change and the urgent energy transition. We all recognise that rapid shutdown of fossil fuels is an existential challenge, but divisions arise on how to achieve speed. Some activists advocate the inclusion of human rights ‘as long as it does not slow the transition’. But growing evidence shows we will only achieve a fast transition if it respects human rights and delivers real benefits to communities and workers. More responsible renewable energy companies are moving to adopt this effective business model by including shared ownership to build the stake of communities and workers in these projects. More troubling is the transition minerals sector, on which new renewable installations depend, where even the more responsible mining companies appear committed to ‘business as usual’ models – and that’s despite expensive permit suspensions and community protests against abuses.

Another sector for tempered optimism is technology. For decades, tech companies have avoided ‘adult supervision’ to stop their algorithms, designed to maximise advertising revenues, from undermining public trust in democracy, or promoting hate speech and conspiracy theories. In 2023 our movement must ensure ICT is included in the high risk sectors of the CSDDD and its harmful impacts wholly covered through a full value chain approach to strengthen the Artificial Intelligence Act; and to press for stricter licensing of the sale of surveillance software.

Finally, the Russian invasion of Ukraine provoked widespread and welcome international sanctions, but over 120 major companies stayed and continue to operate there. Our own Human Rights Due Diligence Tracker indicates they show scant regard for the international UNGP standard of performing ‘heightened due diligence’ to ensure their activities are not contributing to the conflict. Putin’s mobilisation law of 21 September has exploded their scale of risk. The law demands domestic and international companies play an active role in drafting recruits to an army that independent observers demonstrate is involved in systematic war crimes. These companies are now exposed to the charge of being criminally complicit in direct harm. In 2023, our movement can build strategic litigation that challenges companies involved in the Russian draft to consider the very real risks of remaining in Russia.

All of these are signals for tempered optimism – and decisive action this new year. As we look to 2023, we can still cleave to the words of Martin Luther King: "The arc of the moral universe is long, but it bends towards justice". It is our collective effort that creates that bend.

Phil Bloomer, Executive Director, BHRRC