Human rights issues are inextricably tied to the financial success of multinational companies, according to a recent study conducted by Amnesty International UK and the Prince of Wales Business Leaders Forum. Corporations that fail to recognize human rights concerns as public scrutiny increases face serious threats to corporate reputation – and the bottom line.
Sir Geoffrey Chandler, chair of Amnesty International’s UK Business Group, expects that the number of companies focusing on human rights as a business concern will rise as local communities, non-governmental organizations, consumer groups and the media focus more attention on this issue.
"Human rights is the biggest challenge for companies to conform to since the environmental concerns of the last 20 years," Chandler told ResponsibilityInc.com in an exclusive interview. "Society’s concern over environmental and bottom-line impact forced companies to recognize these concerns in the same way that they are now forced to recognize human rights impact."
The study, "Human Rights – Is It Any of Your Business?" found that 36 percent of the Fortune 500 companies surveyed had not proceeded with a proposed investment project because of human rights concerns. Nineteen percent reported disinvesting from a particular country for the same reasons.
The report serves as a primer for companies looking to expand their human rights initiatives. Case studies, best practices and measuring tools from leaders such as Shell, Reebok International and Levi Strauss and Company demonstrate the importance of incorporating human rights protection into corporate missions.
The concept of including human rights concerns in corporate agendas is still in its infancy. Although 98 percent surveyed said they had a code of ethics or statement of business principles, only 44 percent said these statements explicitly referenced human rights. The report advocates that companies include as part of their core mission commitments to the Universal Declaration of Human Rights, the United Nation’s international framework for human-rights protection adopted in 1948.
Technology has also played a role in heightening awareness, Chandler says. "Today is an Internet society – there’s no hiding place for companies that fail to conform," he says. As a result, "Companies must know about their supply chain and have policies that prevent human rights violations otherwise, [companies] will lose customers -and share price."
Conversely, The Co-operative Bank plc says that after it released a policy that it would not conduct business with companies that "oppress the human spirit," the Manchester, England-based bank realized record profits and unprecedented customer growth.
To meet social expectations, Chandler advocates corporations engage in internal and external social audits. Social audits should definitively measure a company’s performance against its stated objectives, define areas for improvement and promote accountability and stakeholder trust.
Responsible business practices will continue to drive companies’ financial success, says Chandler. "Their [companies’] ability to continue to provide good and services and create financial wealth will depend on their acceptability to an international society which increasingly regards protection of human rights as a condition of the corporate license to operate," Chandler says.