Everybody respects human rights in theory. In Nordic countries where there are a strong constitution and freedom of press, the human rights seem like an obvious and self-evident matter. Many businesses no doubt operate in a quite responsible manner – and sometimes even without knowing it themselves!
Now due to the EU directive on Non-Financial Reporting, businesses in all fields need to start reporting their attitude and actions on Human Rights issues. This might come as a surprise for many and cause a lot of discomfort to organizations that until now have not actively been aware of such matters in their daily work.
Human rights may seem difficult and irrelevant, but they are actually in the core of any business.
Where to start?
There are different ways of reporting sustainability and responsibility. Many international organizations offer guidelines for reporting. The EU directive nor the Finnish law do not compel companies to follow any one of them. Often used guideline is the GRI standard and it is a quite suitable for companies which already have a responsibility program.
However, it might be easier to approach the matter using for example the UN Global Compact, which is rather straightforward and simple. Expectedly, many companies that now are required to report on responsibility, do not yet have a responsibility program to implement, nor to report, for that matter.
We would suggest that a company that has never done responsibility reporting before, would start with the UN Global Compact guidelines. Here is the overview of the principles to help you to get familiar with the topic.
The Ten Principles of the UN Global Compact
- Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
- Principle 2: make sure that they are not complicit in human rights abuses.
- Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
- Principle 4: the elimination of all forms of forced and compulsory labour;
- Principle 5: the effective abolition of child labour; and
- Principle 6: the elimination of discrimination in respect of employment and occupation.
- Principle 7: Businesses should support a precautionary approach to environmental challenges;
- Principle 8: undertake initiatives to promote greater environmental responsibility; and
- Principle 9: encourage the development and diffusion of environmentally friendly technologies.
- Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
It is also advised to report about the diversity of the board and the management team and the justifications for it.
Part of the annual report or separate?
The EU directive and the Finnish law on non-financial reporting are both quite flexible on responsibility reporting. It requires corporations to do it, but does not (yet) request how. It is possible to report corporate responsibility together with the annual report or to do a separate report within 6 months of the publication of the annual report.
In many cases companies do either 10 to 15 pages report integrated in the annual report, or a 30 to 100 pages separate report. If a separate report is written, it must be mentioned in the annual report.
From investors’ perspective the report should be accurate and true. And even if the reporting is now obliged only to corporations, it is an emerging trend that also SME’s start voluntary reporting.
The recent survey by KPMG shows that Human Rights are firmly on the agenda as a global business issue. Now it is the time to start familiarizing oneself on human rights issues.
The writer has done voluntary work on human rights issues since 2009.