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Opinion

UN Guiding Principles on Business and Human Rights at 10 – A vision for the future

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This blog is part of a portal on the UNGPs10+ project.

As with many transformative concepts, the UN Guiding Principles (UNGPs) came at the right hour – they were negotiated straight after the debacle of the global economic crisis in 2008. In a similar way this reflection on the first ten years of the UNGPs hits precisely at another time of crisis, this time created by COVID-19. The pandemic melds with other convergent crises in our economies and business models: unsustainable inequality of power and wealth, and climate breakdown. The challenge of the pandemic will inevitably provide a key lens through which the tenth anniversary review of the UNGPs will be undertaken, alongside a renewed sense of urgency to transform our economies from civil society demanding justice, to the rise and rise of ESG investment, responsible business leaders advocating regulation, and politicians nervous that the old orthodoxies of ‘free markets and deregulation’ are now driving authoritarian populism. To remain powerful, the UNGPs will need to demonstrate they can contribute to system-wide solutions to these challenges.

Adopted in 2011 unanimously by the UN Human Rights Council, the UNGPs have had a wild decade, simultaneously lambasted for falling short of ambition and strength by many, while hailed as path-breaking and essential by many others. In reality both camps have valid arguments. Compared to previous decades, it’s undeniable the last ten years have seen a significant expansion of the business and human rights movement and discourse, and it would be fair to give the UNGPs great credit for that. What is harder to establish is whether the impact on business models and behaviour has been sufficiently transformative. From the perspective of more responsible companies it has, but from the perspective of workers, communities and victims it certainly hasn’t. The UNGPs have helped move the needle, but there’s a long dial still to traverse.

The pandemic has already brought tragedy to the lives of workers and communities. In contradiction to the UNGPs, too many companies’ - and especially brands’ - reflex was to protect their shareholders and executives rather than consider the long-term resilience of their supply chains, and the welfare of their workers and suppliers. The pandemic and its aftermath will be with us for years. But this crisis provides an urgent opportunity to employ a ‘Just Recovery’ approach to deliver the transformational shifts essential to tackling inequality and climate breakdown. The UNGPs10+ agenda must be used to create a New Social Contract and Green New Deals to direct markets and business to deliver far greater shared prosperity and shared security in the next decade. Without fundamental reforms to guarantee greater welfare, dignity and freedoms for workers and communities, we can expect further polarisation in our societies as people lose faith in building common ground.

Two fundamental components of this agenda for the next decade might be:

The New Social Contract will need to embrace a rebalancing of power and wealth away from shareholders and towards workers and communities. The last decade demonstrates this will not happen voluntarily, hence the new appetite of centre right and left politicians for better regulation and business incentives. Europe’s mandatory human rights and environmental due diligence initiative chimes with the UNGP’s ‘Smart Mix’ of regulation and voluntary action, and the draft UN Binding Treaty’s approach. This approach seeks to change the calculus of risk in boardrooms of companies which can externalise environmental and social costs through pollution (including carbon), and abuse of workers or communities. And beyond this, the business components of a New Social Contract will have to embrace issues such as worker’s rights and empowerment, and business contribution to social protections for people’s human security.

The Fast and Fair Transition to Zero Carbon Economies is now urgent. Business has played a central role in creating this existential threat and now must become part of the solution. To take one example – the energy sector: as dirty industry closes, workers will need retraining, social protection and new jobs. Concurrently, as cleaner industries open up they must create decent work and co-benefit for communities. This will not be automatic. Our latest Renewable Energy Benchmark shows most companies lack essential human rights due diligence – which explains the fast rise in the allegations of abuse we receive from grassroots organisations. And our Transition Minerals Tracker reveals that the 37 largest companies mining the top six minerals have 167 allegations of abuse against them. The UNGPs can help guide governments to insist the transition to zero carbon is fair. Otherwise it will not be fast as communities’ opposition at dispossession and exploitation grows.

There isn’t a silver bullet to solve all business and human rights problems. But in the next decade, in the face of multiple crises, our movement needs to value the complementarity of our diverse approaches to making change happen. These must include:

  • a ‘smart-mix’ of regulation with teeth alongside business incentives;
  • state action to rethink the social purpose of the corporation, end abusive business models, including in supply chains, and empower workers and communities;
  • access to justice and remedy for abuse, alongside expanded company-level grievance mechanisms;
  • solid ESG criteria and indicators to guide better investors’ decisions;
  • complementarity between ‘soft law’ instruments like the UNGPs and ‘hard law’ initiatives like the Binding Treaty;
  • voluntary action and sharing of positive approaches by more responsible companies.

None of these approaches are exclusive of one another or come at the expense of new ideas that will surely emerge. But this latest crisis has shown the urgent need for a new social contract and green new deals to deliver a truly global, shared prosperity. In the next ten years, companies and governments will have to play a far more constructive role towards a better future.