Developing Best Practices for Human Rights Due Diligence in Technology Sales Channels

Introduction

BSR worked with Hewlett Packard Enterprise (HPE) and another BSR member company to develop a set of best practices and recommendations for addressing one of the toughest human rights challenges in the technology sector: how to ensure human rights due diligence (HRDD) is conducted across sales channels. The project illustrated the value of multiple companies pooling resources and coming together to work with BSR to address a common challenge.

Background

Leading hardware and software companies, including HPE, have taken steps to identify and mitigate risk that customers could use their products and services in ways that adversely impact human rights. However, once products and services are sold, these companies often lack visibility or control over how they are used. Many companies in the technology sector rely on third-party sales partners that distribute, integrate, or resell their products and services to end users. This presents challenges for companies due to limited visibility into channel partner sales and relatively immature human rights practices throughout their sales channels.

Challenges

There are several challenges to effective HRDD across sales channels in the technology sector. Sales channels involve a large volume and variety of partners, parts of the sales partner market lack stability, there is a long chain of entities before a product reaches the end customer, sales often involve a mix of products and services from different vendors, sales and legal compliance teams tend to lack expertise in ethics or human rights, there are significant financial and performance pressures in sales, and there are a variety of different sales models. HPE asked BSR to develop guidance that could address these challenges due to our history of working on industry-wide human rights issues and trust facilitated by our membership model, which enables companies to feel comfortable working collaboratively together.

BSR's Response

BSR conducted interviews with sales channel and legal compliance leads at both HPE and another BSR member company, as well as several of their common sales partners that act as distributors and resellers, to develop an understanding of how sales channels operate, the roles of each actor, their current approach to conducting HRDD of sales and the challenges they face. BSR utilized the insights gained from these interviews combined with our knowledge of how to effectively implement HRDD inside companies to develop a set of detailed best practices.

BSR also utilized interview insights to develop tailored guidance for each company based on these industry best practices.

Impact

By coming together to work with BSR to help address a common challenge, these peer companies were able to help create much needed industry-wide guidance on one of the most complex and unsolved human rights challenges in the technology sector. The guidance contains recommendations specifically for vendors, distributors, and resellers based on the leverage (the ability of a company to address a human rights impact according to the UNGPs) and constraints of their position in the sales channel, as well as recommendations for all companies in the sales channel. These include collaboration across the sales channel to develop and share best practices and create feedback loops, exploring lessons learned from the supply chain context, identifying highest risk use cases with the potential to involve severe human rights violations that require heightened due diligence, and continuing to advance downstream human rights due diligence including processes for flagging, assessing, and mitigating high-risk sales opportunities. Engaging with a variety of companies across technology sector sales channels in the development and publication of this guidance has raised greater awareness of the need for broader cross-sector collaboration to put the recommendations into practice.

HPE utilized BSR's tailored recommendations to engage and promote HRDD across its sales channel, including raising internal awareness of the issues and how to address them as well as building needed buy-in across the companies to take effective action.

Conclusion

Against a backdrop of expanding scrutiny on the downstream human rights impacts of technology sales and use from stakeholders and regulators, now is a key moment in time for tech companies to address human rights due diligence gaps in their sales channels. Because technology sector companies have similar sales channel structures and often similar sales partners, this is ultimately an industry-wide issue that will require collaboration and coordination beyond the boundaries of any single company. The development of best practices for HRDD in technology sales channels lays the foundation for this collaboration, which BSR hopes to expand in the future.

Get in Touch

This case study was written by Lindsey Andersen. If your team is also interested in support on assessing and addressing the human rights impacts associated with your company’s products and services, or if you'd like to work with other companies to address a common challenge, please reach out to us to learn how we can help.