Addressing exploitation means aligning action with impact

Since its articulation, domestic legislation, including modern slavery reporting and mandatory human rights due diligence, continues to proliferate around the world to require business to take their human rights responsibility seriously. In essence, prevention of harm to people and planet as corporate responsibility is a concept now both socially and commercially irrefutable and, increasingly, incorporated into law.

With commercial reality catching up with the social imperative, businesses can no longer claim this kind of harm isn’t their problem. The regulatory requirements make clear that where there is scope for influence, there is a responsibility to use that influence to prevent harm.

Structuring business models with people in mind includes ensuring a company does not rely on or benefit from exploitation in its value chain. It includes moving away from establishing complicated business structures that obstruct visibility of potential harm down the chain and taking steps to enhance visibility and influence.

The purpose of human rights due diligence is for businesses to be part of the solution rather than the instigators of, or accomplices to, the problem of exploitation. Whether the immediate business driver is values and purpose, regulation and compliance, investor scrutiny, or brand and reputation, the intended outcome is to everyone’s benefit: a stable social and economic system that is not predicated on harm.

Making it meaningful

Practically speaking, respecting human rights means that large established businesses must navigate the complexity of retrofitting social risk and impact considerations into existing systems and processes. This is a cultural and change management process that takes time and effort, and it must if it’s to be meaningful. Newer businesses will need to build in a ‘risk to people’ lens into systems and processes, and decision-making, from the beginning. What’s clear is that preventing and mitigating harm to people must be accepted as a critical component of doing business.

One step at a time, but faster

As human rights and social impact practitioners, we put this into practice every day and know it’s not just a lofty ideal. Every consideration of a human rights risk built into a business system leads to a new decision-making pathway that puts people at the centre. Every human rights indicator built into a measurement framework holds its owner accountable to the next step towards real impact. We know what needs to be done, and we need to pick up the pace and do it at scale.

One of the biggest challenges in embedding and measuring social performance is distinguishing between effort and effect. Addressing harm to people requires meaningful action against three components of an overarching strategic framework: policy, due diligence, and grievance and remediation. As businesses develop and implement policy, they will need to move swiftly to action that is aligned to effect and impact. Policy for its own sake, and action for its own sake, is not what the laws require, nor what will bring about necessary change. While clear commitments and action planning are foundational, flurries of activity that are not tracked against effectiveness and impact serve no one.

What’s the answer?

The answer is to listen to the voices of the people impacted by business activity, drawing on specialist input to do so meaningfully and respectfully. Then, it’s about using what you learn from listening as the basis for practical action that is measurable and linked to its intended effect.

Unpacking the terminology

Key to designing a human rights approach to business with impact firmly in mind is understanding a few important concepts.

  • Inputs: these are the human and financial resources, and intellectual or physical capital, needed for action to take place.
  • Activity: the actions that businesses take, such as development of policies, design of governance structures, development of systems and controls, training, stakeholder engagement steps, setup of grievance and remediation processes
  • Output: the immediate results of the activities, based on evidence that the activities and deliverables they generate are being used in the intended way. They can be demonstrated by metrics such as the number of training sessions held, or evidence of use of a grievance mechanism through number of complaints lodged through the mechanism.

To track progress against the above three areas is to track effort. However, to evaluate effectiveness and impact, two other considerations are important:

  • Outcome: this is about the direct short and medium-term effects of the output on people and communities. For example, this might include improved human rights literacy levels, or improved or declined awareness of the existence of a grievance mechanism.
  • Impact: the result of numerous intersecting outcomes over time, such as an improved experience of a vulnerable population or a reduction in types of harm in a community or stakeholder group. To measure impact is a matter of developing and mapping directly related outcome indicators that are reasonably and defensibly linked to the intended social impact.

Taken together, impact measurement incentivises and guides real change. The process includes articulating an impact ambition, establishing impact indicators linked to the objectives a business has set out to achieve, and demonstrating how in the long term it contributes to targeted social impact against those indicators.

In a nutshell

There’s an approach all businesses can take to fulfil their responsibility to prevent harm. Demonstrating sustained action that has real impact is possible, and overdue. The sooner businesses take this seriously, make the necessary investment, and embed it meaningfully, the better for the business, and, critically, for people and planet.

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