10 Reasons Your Business Needs a Human Rights Strategy
No matter how new or small, every business should have a human rights strategy.
It is the right thing to do.
We all like to think of ourselves as good people, and by extension, we want the businesses that we build to reflect and demonstrate our values. Human rights are really a set of universal values that point us towards a path where people live with dignity, autonomy, and justice. No matter your ideology, religion, philosophy, or other world view, I bet it incorporates most, if not all, human rights. Making sure your business strategy aligns with your core values is a no-brainer.
Your competitors don’t know where to start.
“Minimum Viable Product (MVP) comes before thinks like human rights and environment." MVP has its place, but putting something on the market that’s made with sweatshop labor is never a good idea. Your customers and investors will get used to prices and profit margins that you just can’t sustain if you later switch to a supplier that isn’t exploiting people.
“It’s too expensive for a small company or early-stage startup.” Human rights is not just for big budgets. Small businesses can have an effective human rights program with a very small footprint. Early-stage startups don’t need to invest a ton, but will benefit from thoughtful integration of human rights as the business grows.
“It’s too hard to figure out where to start." Often, the dialogue in this area is in an inaccessible dialect and focuses on the many legal instruments or organizations instead of the concrete actions that a business without a human rights department can take. We drop the jargon, abstract chatter, and history lessons to help you focus on human rights as they relate to your business today.
Avoid costly mistakes and controversies.
The main way that human rights advocates advocate is through public campaigning. That’s the best tool that those groups, as outsiders, have found to try to effect change from businesses that aren’t doing the minimum on human rights. These campaigns can cost a business reputationally and financially. Sounds scary, right? Well, no, not really. These civil society organizations are an important part of the human rights ecosystem, filling a role that individuals and governments simply can’t and helping to create a fair market where your business doesn’t find itself competing against a badly behaved company. A company like yours with an effective human rights program need not hide from anyone.
Prepare for new rules popping up worldwide.
The European Union just passed the Corporate Sustainability Due Diligence Directive (also known as CSDDD or “CS Triple D”) requiring some large businesses to conduct human rights due diligence. And the EU is not the only authority debating and passing laws that mandate businesses to take action on human rights: from the Uygher Forced Labor Prevention Act in the United States to the German Supply Chain Due Diligence Act, the landscape is only going to get more complex. Due diligence for big companies means that they need to ask their business partners - even small ones - about their human rights practices. And any startup that hopes to make it big needs to start planning for the day that it will be big enough to start getting serious questions. It is infinitely easier to build human rights compliance into your businesses model from the very beginning than to try to retrofit it onto a product that’s already on the market.
Investors care.
Venture capitalists, angel investors, and institutional investors alike are increasingly focused on ESG dimensions of their investments. For example, there are over 3,500 signatories to the Principles for Responsible Investment, and the number is growing at a rapid clip. Of course you’re prepared to pitch your startup, but are you ready to answer a question about your human rights risks?
Customers care.
Again and again, studies show that consumers care about human rights issues. While there is sometimes a gap between consumers’ stated preferences for ethical companies and their actual purchasing decisions (the value-action gap), the gap is shrinking. You can make it smaller for your offering by establishing credibility, sharing relevant information, and demonstrating that your commitment to human rights doesn’t mean sacrificing quality.
Be ready for future opportunities.
Don’t get caught unprepared when your hard work turns into opportunities. It is only a matter of time before your company will have to answer some tough questions about human rights risks as other companies vet you as a potential partner. “Due diligence” sounds really vague and abstract but it actually means that more and more companies, especially big ones, will have legal obligations to look at your practices before you can land a deal.
Take credit for things you’re already doing well.
Human rights are not “extra.” Often, but not always, companies without a human rights program are further along than they realize. For example, does your company have a process to verify the ages of employees? Congratulations, you have a basic child labor policy. Does your company take steps to make sure its production processes don’t damage local drinking water sources? Congratulations, you have a basic right to health policy. Formalizing your commitment to human rights doesn’t always mean making big, expensive changes.
Build a reputation of trustworthiness.
What makes customers loyal to your brand? In addition to quality products and services, one of the key drivers of brand loyalty is trustworthiness. Close the value-action gap by communicating clearly that your company deserves consumer trust because of its ethical practices and integrity.
It is not as hard as it looks!
Getting started can be simple with the right strategy and just a few key tools. There’s no need to hire a whole department or to redo your business plan. A human rights policy that summarizes your company’s commitment, training to set your team up to meet expectations, an avenue for feedback, and a few other actions depending on a company’s size, industry, function, and phase can go a long way.
E4HK makes it easy for any small business or startup to begin its human rights journey. Check out our customizable toolkits for small businesses and startups.
