This article does not cover the issues or sectors companies and organizations need to look out for in 2024; it provides insight and suggestions on actions to be adopted to ensure businesses establish a robust human rights lens in understanding, addressing, and mitigating such issues.
1. Implementing and monitoring regulation – think about a shift in risk management practices, not legal compliance
Businesses will have to comply with the existing and emerging mandatory human rights due diligence and reporting frameworks (CSRD, SFRD, CSDDD, and others such as the Canadian fighting against forced labor and child labor in supply chains act which entered into force in 2024). The aim of these regulations is the same – they seek to identify risks to people, including vulnerable and at-risk groups, rather than risks to the business. In practice, this requires businesses to shift focus in their analysis and responses instead of adopting a mere legal compliance approach. How?
- Conduct legal monitoring and briefing sessions covering regulatory and developing legal cases.
- Conduct the necessary assessments in the run-up to the new reporting requirements, such as living wage under the CSRD.
2. Better understand the risks and their causes
The regulatory approaches propelling businesses to map and understand their assessment in a more robust manner. How?
- Conduct risk analysis and human rights impact assessments.
- Conducting gap analysis by reviewing existing processes and ensuring they are aligned with expectations.
3. Develop people-centered strategies and prioritize action
Consider how the company may be involved in these issues through its operations and broader value chain. While companies should address all their human rights risks, the UNGP advises companies to prioritize their most salient (severity + likelihood of occurrence) human rights issues. Analysis needs to be ongoing, taking into account changing contexts (e.g., Escalating conflict situations or other significant events). Once identified, companies can:
- Frame their human rights disclosure around their salient issues.
- Develop action plans based on these priorities.
- Develop policies and effective governance structures, breaking the internal silos within the organizations and engaging top management.
4. Take effective and impactful action by going beyond audit
Developing more effective, people-centred mitigation and adaptation responses sensitive to possible unintended consequences is imperative.It has been widely reported that social audits and certifications are ineffective and fail to detect and remedy human rights risks. Companies and investors should not treat audits as sufficient proof of due diligence. An extra level of scrutiny and verification is required where it is incorporated into existing practices. How?
- Implement beyond-audit solutions (Ksapa’s Sutti digital solution) to measure and support reporting on human rights performance in alignment with existing and upcoming legal requirements, standards, and best practices.
- Engage in capacity building and training for the company’s workforce and suppliers. This is the most effective approach to enhance alignment on expectations and practices and mitigate related risks accordingly.
5. Integrate human rights into company climate action
With climate change being one of the most significant risks to human rights, meeting this challenge needs to go beyond carbon emissions. This green transition should be rights-based and consider risks to people and affected communities. How?
- Conduct enhanced due diligence in the green transition supply chain, especially in areas reported to be risky, to better identify and understand those risks.
- Develop an approach that will integrate into company processes to address and mitigate salient issues such as forced labor in the green transition.
- Capacity building and training for the company’s own workforce and suppliers
6. To investors – ESG assessments and social considerations are no longer “trends”
The financial sector has to also operate in a way that does not cause or contribute to actual or potential human rights impacts, which are connected to many stages of the investment and in all sectors. How?
- Adopt a strategic approach to human rights.
- Conduct ESG due diligence, assess their impact, risks, and opportunities, and incorporate findings in investment decision-making.
- Place relevant human rights due diligence and access to remedy requirements on portfolio companies.
- Undertake your own human rights due diligence in specific high-risk sectors or operations.
- Moving beyond audits – Broaden engagement with stakeholders to be better informed on identifying, assessing, and managing material issues.
- Integrate human rights in climate-related investments. For example, consider responsible disengagement from fossil fuels.
- Through active stewardship and board oversight. Ksapa developed a toolkit guiding human rights-related due diligence while working with 14 private equity companies. This toolkit can help any fund management company to understand expectations and strengthen processes accordingly.
Speaking about a “human rights journey” in 2024 is no longer enough. Actions speak louder than words, and in some instances, businesses will also be held accountable for what they say and do.
Krystel is senior consultant, contributing to Ksapa’s consulting and advocacy missions, on the topic of business and human rights and more generally sustainability. Krystel Bassil is also Senior Legal Officer of the Human Rights and Business Unit at the Syrian Legal Development Programme (SLDP). Prior to that Krystel worked as a business and human rights consultant advising along with leading experts on a wide range of projects across the private sector, international organizations, and academic institutions. She is admitted to the Beirut Bar and worked as a lawyer in international arbitration and human rights. Krystel holds a LL.M. degree from SOAS, School of Oriental and African Studies, University of London, a law degree in public law from the Holy Spirit University of Kaslik, Lebanon, and a degree in political science from the Saint-Joseph University of Beirut. She is fluent in French, English and Arabic.