This year doesn’t mark the first time the UK’s largest companies have been obliged to report on how they respect human rights. In fact, back in 2013, the Companies Act 2006 was amended to include a requirement for UK listed companies to report on their human rights performance in their Strategic Reports.
Yet, this statutory requirement has largely been ignored. Last week’s study by the Chartered Institute of Procurement and Supply provided similar news – only two thirds of companies legally required to publish an annual statement on the steps they are taking to eradicate slavery in their supply chains, had published any statement.
What’s the problem? It is likely that many companies just do not understand how they – or their suppliers – are at risk of human rights violations, including slavery.
In 2014 Mazars, the international accounting and advisory firm, together with Shift, the leading centre on business and human rights, published the UN Guiding Principles Reporting Framework. Compared to the complexity of the issue, the aim of this framework is simple – to help companies understand how risks to human rights relate to them. It also helps them avoid causing or contributing to negative human rights impacts and assists them in meaningful reporting.
The Framework is concise – consisting of eight overarching questions for companies to get started and 23 sub-questions for companies with a more mature understanding.
Since then, several governments, including the UK and France, have recommended the use of the Framework, with many global companies publically stating they are using it.
So how can we now ensure the reporting is accurate? On Tuesday, 19 September, Shift and Mazars are launching the UNGP Assurance Guidance – the second – and complementary – part of the UN Guiding Principles Reporting Framework. This Guidance assists with the effective monitoring and assuring of the reporting of human rights performance. The Guidance builds on the existing assurance frameworks currently used by assurance providers (internal audit and external assurers) and identifies specific areas where these providers will need to amend or deepen their work. It also provides benchmark indicators of what appropriate and effective performance could look like, comprising a useful tool for most management areas within a business.
This is the first human rights specific assurance guidance which is supported by the Chartered Institute of Internal Auditors. It will be available online on 20 September at www.UNGPreporting.org.