Implementing human rights due diligence
The UN Human Council plan was clear: “establish universally applicable Guiding Principles to prevent and remedy business-related human rights harm”. This began in 2011 when the UN Human Rights Council endorsed the UN Guiding Principles on Business and Human Rights (UNGPs), outlining companies’ responsibility to respect human rights. The OECD updated its Guidelines for Multinational Enterprises in 2023, further extending these expectations globally.
By Gerardo García
Since 2015, Georg Fischer (GF) has followed the UN Global Compact Principles, covering human rights, labour, environment, and anti-corruption. In 2021, GF released its first standalone corporate policy on human rights and revised its Code for Business Partners and sustainability policies to uphold these principles. This commitment includes regularly updating its processes to address evolving human rights risks. In 2023, GF launched a new human rights due diligence (HRDD) process based on international standards, ensuring alignment with emerging regulations and transparency requirements.
Implementing HRDD is a medium to long-term strategic process. Key initial steps include:
Assign responsibilities: define roles for strategic direction, oversight, development, and operational implementation of due diligence, involving both executive board members and operational staff.
Build competence: develop internal expertise or leverage external expertise to initiate the HRDD process.
Gap analysis: assess current HRDD elements and identify any gaps.
At GF, the Nomination and Sustainability Committee oversees overall sustainability performance, including human rights. The Executive Committee monitors progress towards strategic goals under the Sustainability Framework 2025, which includes a target on sustainability assessment (including human rights) of procurement spend. Corporate Sustainability coordinates activities across divisions and with stakeholders to ensure cohesive implementation of the HRDD process.
Key challenges and considerations
Integrating human rights into business operations through due diligence is challenging. It involves systematically identifying the potential or actual negative impacts of activities and business relationships on individuals and communities. The actions a company takes depend on its involvement with human rights impacts and its leverage in addressing these adverse impacts.
New and significant global issues, such as AI and social issues due to climate change, require building capacity in complex supply chains and addressing risks both upstream and downstream.
Performing due diligence: an ongoing process
The due diligence process involves assessing risks from a human rights perspective, focusing on risks to rights holders rather than business risks. It’s important to evaluate management systems, policies, and processes to identify and close any gaps. This requires collaboration among functional teams and various internal stakeholders, making it a lengthy journey, particularly for complex value chains and companies with a significant global footprint.
Assessing actual and potential impacts is one of the most challenging steps in the due diligence process. Internal stakeholder consultations should focus on the potential gross risks of human rights impacts on rights holders. GF examines insights and recommendations from international human rights protection systems and indexes, such as treaty bodies, special procedures, and UN specialist agencies, to conduct a comprehensive human rights analysis.
Selected international indexes evaluate country-specific human rights risk levels globally, assessing how well a country deals with human rights issues. While these indexes are based on official national statistical sources and may have political influences, they serve as an initial reference point. Onsite consultations are essential to accurately determine if the company’s operations are exposed to these risks.
Prioritising risks
Identifying high-priority risks is crucial in due diligence. The UN Guiding Principles clarify that prioritisation is acceptable. However, companies must examine all human rights issues, including less obvious ones like diversity and inclusion and human resources issues. Even after thirteen years of the UNGPs, no company has perfected the process; human rights risks and impacts remain challenges.
Prioritising salient human rights impacts means addressing the most severe issues first, without ignoring the others. The goal is to ensure robust processes to manage these issues, mitigate risks, and provide remedies when harm occurs.
Looking ahead: human rights as standard practice
The evolution of business and human rights can be likened to the development of health and safety standards in the 1950s and 60s. The economic boom and rise of industrial jobs then brought attention to working conditions and the importance of workplace health and safety. Today, health and safety are standard practices. Similarly, in the coming years, business and human rights considerations should become standard practice. When companies make decisions, whether investing in new assets or engaging with stakeholders, human rights should be a fundamental consideration. However, this transformation will take time.
From the EU towards a fairer globalisation
With new laws like the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) in the European Union, companies must use a risk-based approach to identify, address, and prevent negative impacts on human rights in their supply chains. The CSRDD aims to foster a fairer globalisation by upholding human rights, mandating companies to conduct HRDD across their value chains. This extends the influence of the EU’s regulatory policy to companies beyond Europe. Companies that have been less integrated in HRDD practices now face a critical need to align their policies with these new standards to maintain global relevance under European rules.
What are country-specific human rights risks?
These are unique challenges and violations of human rights within a specific country due to its political, social, economic, and cultural conditions. Examples include political repression, corruption, discrimination, labour rights abuses, and privacy invasion.
Key Take-Aways
Drafting and developing a human rights policy is a continuous process. Start with an initial version and revise it periodically based on experience with human rights due diligence.
Implementing human rights due diligence is a crosscutting task involving various operational functions. Creating an interdisciplinary working group can facilitate internal coordination.
Traditional business risk analysis focuses on risks to the company. Human rights risk analysis focuses on risks to potentially affected individuals or groups (rights holders).
Including relevant human rights topics in existing target-setting processes helps embed human rights effectively in the company.
Grievance mechanisms can be established at the local or factory level, company level, or sector/industry level, either by the company itself or in cooperation with partner organisations (e.g., multi-stakeholder initiatives or business associations).
Gerardo García Martínez
is the Corporate Sustainability & Social Impact Manager at Georg Fischer, overseeing social, governance and human rights topics, and leading the Sustainability Annual Report. He holds a Master of Science in Innovation, Human Development, and Sustainability from the University of Geneva (Switzerland), a master’s in Administration & Finance, and a BSc in Chemical Engineering from Tecnológico de Monterrey (Mexico).