Blog: Monday, 10 December 2018

On Human Rights Day, we celebrate not only the Universal Declaration of Human Rights (1948) but also the UN Guiding Principles on Business and Human Rights (UNGPs, 2011) and the UN Sustainable Development Goals (SDGs, 2015). Under the UNGPs businesses have a responsibility not to negatively impact human rights, and under the SDGs they have an opportunity to create positive human rights changes. Human rights may perhaps be a neglected topic in some business schools but the relevance for businesses is rapidly developing and they will be mainstream when today’s first year students graduate, writes Professor Cees van Dam from Rotterdam School of Management, Erasmus University (RSM) in this blog.

On 10 December 1948, the United Nations General Assembly proclaimed the Universal Declaration of Human Rights. In the aftermath of the atrocities of World War II, the world community solemnly declared that all human beings are born free and equal in dignity and rights and that people should act towards one another in a spirit of brotherhood.

Fast-forward 70 years, and the world has changed in many ways. However, the call to respect and protect human rights is as important as ever. 

Respect and protect

In 1948, states were called upon to respect and protect human rights. Today, the powerful players in the world are no longer only states but also transnational corporations and global value chain leaders. Just like states, companies can use their powers for the better, for example by helping people out of poverty by creating jobs, but also for the worse, such as allowing dangerous working conditions, child labour, slave labour, and environmental degradation in their domestic and global operations.

In 2011, the United Nations therefore adopted the United Nations Guiding Principles on Business and Human Rights (UNGPs). They require companies to act responsibly by respecting human rights, not only if they are legally obliged to do so but also when this is not the case or where existing rules are not properly enforced. Prof. John Ruggie, the Special Representative of the UN Secretary-General, summarised the UNGPs as ‘companies should treat people with dignity’, a clear reference to the Universal Declaration. Hence, just over 60 years after the Universal Declaration, human rights create obligations for states and responsibilities for businesses.

"With respect to SDG 4 (quality education): not only, negatively, banning child labour from the supply chain but also by positively contributing to children’s education."

Rules and practices

There are many good reasons for companies to take the UNGPS seriously: some of the Principles are turned into binding legislation, investors and shareholders increasingly call for responsible business practices, and global value chain leaders require their business relations to comply with rules and practices that include respecting human rights. 

Another important reason is that companies with good social characteristics and responsible business practices often outperform other companies in long-term results. The same goes for companies with good corporate governance. Indeed, the Dutch Corporate Governance Code 2016 requires the management board to develop a strategy to create long-term value of the company and one of the elements of this strategy should be respect for human rights. 

It is a classic win-win situation: on one hand, preventing a negative impact on human rights will improve the lives of many and, on the other, companies will yield more sustainable results and value. When it comes to human rights and business, the direction of travel is clear. Still, the road ahead is complex and bumpy. Companies need to do a lot to do to make real progress when it comes to respecting human rights and to making a difference on the ground for millions of people.

Positive contributions

And there is more. In 2015, the United Nations launched the 17 Sustainable Development Goals. These goals are all linked to human rights, for example the rights to quality education, to gender equality, and no poverty. Where the UNGPs focus on respecting human rights by refraining from negative effects, the SDGs invite businesses to contribute to the achievement of human rights by creating positive change

What does this mean? With respect to SDG 4 (quality education): not only, negatively, banning child labour from the supply chain but also by positively contributing to children’s education. When it comes to SDG 5 (gender equality): not only, negatively, refraining from discriminating women but also by positively striving for gender equality and empowering women. As regards SDG 1 (no poverty): not only respecting workers’ rights by paying them according to the rules but also positively by paying workers a living wage so they can live in dignity. 

Collaborating to achieve success

Both respecting human rights and contributing to the SDGs can only be successful if it is a concerted effort between governments, businesses and civil society. In the SDGs this is embodied in SDG 17 on partnerships for the goals

RSM has rightly embraced the mission to be a force for positive change in the world. Linking this only to the SDG agenda would, however, run the risk of contributing to SDG-washing, making the human rights of the people on the ground going from bad to worse. Engagement with the SDGs begins with respecting human rights: with preventing and minimising negative human rights impacts. The world will already be a much better place if this is done seriously and consistently. At the same time it will bring the SDGs considerably closer to their achievement. 

The way forward both for businesses and for business schools is to look at the UNGPs and the SDGs in conjunction, and embrace an active or proactive human rights strategy. In such a strategy, respect for human rights is key but it is coherently and consistently linked with possibilities to create positive and sustainable societal impacts. The UNGPs and the SDGs are two sides of the same coin.

Prof. Cees van Dam

Professor of European Liability Law

Maastricht University

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