How to Conduct an Effective Human Rights Impact Assessment

Authors

• Faris Natour

  Former Managing Director, Advisory Services, BSR

• Jessica Davis Pluess

  Former Manager, BSR

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If you work in the CSR department of a major company, chances are someone—from a rating agency, a socially responsible investment firm, an NGO, or even from your own company—has asked whether you are conducting human rights impact assessments (HRIAs) to help detect issues such as poor working conditions in the supply chain or misuse of a product to infringe on the right to free expression before they become major problems.

These questions are coming in large part because the Guiding Principles on Business and Human Rights have clarified corporate responsibility for human rights and have focused attention on these issues in the broader sustainability community.

Ensuring that the company does not infringe on human rights is not as easy as it sounds, and in our recent experience conducting HRIAs, we encountered many challenges. Some were familiar, such as a lack of understanding of human rights among company staff outside the CSR and legal departments. And some were new, such as a significant change in a product’s underlying technology (and with that, a change to the product’s human rights risk profile) during the course of an HRIA of that product.

BSR’s new report, “Conducting an Effective Human Rights Impact Assessment,” captures lessons from our efforts to overcome these challenges in the course of conducting HRIAs in various industries, including information and communications technology, energy and extractives, health care, agriculture, and media. The report includes eight guidelines for conducting effective HRIAs, practical examples from our work, and step-by-step guidance on the four levels of HRIAs: corporate, country, site, and product.

Eight Guidelines for Conducting HRIAs

Our HRIA approach is designed to be tailored to a company’s unique risk profile and operating context. It is not intended as an off-the-shelf tool or checklist. At the heart of our approach are eight guidelines that shape the decisions we make with companies to ensure that the HRIA process is sustainable and provides actionable results:

1. Customization: Ensure the HRIA approach reflects the company’s unique operating context and availability of human and financial resources, without compromising the necessary rigor and scope. It should build on what is already known, align with the company’s knowledge of human rights, and use existing processes, tools, and data.
2. Integration: Identify ways to integrate the HRIA into existing management systems to optimize resources and embed human rights consideration into business operations. Effective integration is necessary for human rights due diligence to become an ongoing process.
3. Ownership: Use the HRIA process to build ownership for human rights within relevant company functions to support the implementation of recommendations and ensure that the HRIA becomes a foundation for ongoing human rights due diligence. This is done best by engaging colleagues, particularly leadership, early on to shape the process and strengthen internal awareness and capacity.
4. Focus: Get to the point quickly by focusing on issues that are relevant to the company and its operating context. While a comprehensive review of all human rights is the starting point for an HRIA, and all impacts must be addressed, companies can maximize resources through a clear prioritization process.
5. Risks and opportunities: Identify and maximize opportunities for positive impact. Although the Guiding Principles rightly limit a company’s baseline responsibility for human rights to “non-infringement,” we believe companies should also seek to understand and take advantage of opportunities to promote and advance human rights.
6. Meaningful engagement: Listen, learn, and share with rights holders (those whose rights may be affected by the company) to better understand risks, opportunities, and impacts, and to promote dialogue and strengthen relationships with potentially affected groups. By preparing well and following up with those individuals, the company can build a meaningful engagement process to support the HRIA.
7. Transparency: Communicate publicly about the HRIA process to build trust with stakeholders and open lines of communication with communities that can help identify problems before they become human rights infringements. An appropriate level of transparency typically includes the disclosure of a short summary report with a description of the HRIA process and method and a summary of high-level findings.
8. Strategic alignment: Consider where the company is headed, rather than solely where it has been. By taking into account the strategic direction of the company and how this could affect rights holders, an HRIA can offer critical insights to help the company build a point of view on its approach to respecting and advancing human rights; this will help the company navigate difficult business decisions.

These guidelines have provided us with a consistent framework to help companies identify and address their human rights impacts in very different contexts. For example, an agriculture company with a complex, global supply chain needed to understand the human rights risks in its major sourcing countries. A software company, on the other hand, needed to better understand the human rights risks and opportunities associated with certain products.

Four Levels of HRIAs

Our report also outlines the four levels of impact assessments that companies undertake to identify and address human rights impacts, risks, and opportunities where they are likely to occur:

• Corporate level: The corporatewide assessment maps the company’s operations and functions against all human rights to identify key risks and opportunities and determine where a more specific, in-depth HRIA is needed at the country, site, or product level.
• Country level: Building on the findings from the corporatewide HRIA, the goal of the country-level assessment is to identify and address specific human rights concerns in operating countries. In many cases, this assessment informs a company’s decision about whether and how to enter a new market.
• Site level: This assessment is designed for a company seeking to identify and address impacts, risks, and opportunities related to a specific operation with defined boundaries, such as a mine site or a supplier factory.
• Product level: This assessment identifies human rights impacts of products that can be used for beneficial purposes but can also be misused in a way that infringes on human rights, taking into account design processes, user communities, and the legal and human rights context in regions where the products are used.

Companies do not have to complete all four assessment levels. Instead, they should identify the levels that most effectively capture the human rights impacts, risks, and opportunities relevant to them. A mining company’s greatest impacts on rights holders are likely to occur at its sites. A food company may have certain sourcing countries that present the highest risks. A telecommunications company’s greatest risks are typically related to working conditions in the supply chain, as well as the use of its products and services. In our experience, the corporatewide assessment is usually a good first step and helps a company identify countries, sites, or products that should be subject to a specific in-depth HRIA.

As companies continue to conduct HRIAs, address the issues they find, and integrate human rights due diligence into business operations, we hope that our guidance will prove helpful. With every new assessment project, we expect our approach to evolve, and we plan to update the report regularly with new examples, lessons, and ideas from our work. We would also like to hear about your HRIAs. You can share your ideas, lessons, and examples by emailing us at fnatour@bsr.org and jdavispluess@bsr.org.