Are human rights good for business? In a word, yes! That was the conclusion of the panellists discussing this question at our inaugural Business and Human Rights Practice event. The panel identified the positive role of human rights as part of the rule of law framework that protects business and creates a safe space for foreign investment and concluded that the risks posed by possible human rights breaches often created opportunities for forward-thinking businesses to differentiate themselves from their competitors by leading the way on compliance as envisaged under United Nations Guiding Principles on Business and Human Rights. The discussion also considered other benefits to business of engaging with human rights concerns, such as lower exposure to reputational risk and, potentially, greater profits in the long term.
The question of whether human rights are good for business provoked a lively discussion among the panellists who included Jon Snow (in the chair); Sir Mark Moody-Stuart and Christine Batruch. Sir Mark Moody-Stuart is, among other things, an ex-Chairman of Shell and Anglo-American and currently the Chairman of the Foundation for the UN Global Compact. Ms Batruch is Vice-President Corporate Responsibility for Lundin Petroleum. Julianne Hughes-Jennett and Charles Brasted from Hogan Lovells whose practices focus on human rights in a corporate context.
A number of key conclusions emerged from the discussion.
First, human rights compliance is now firmly on the agenda for businesses across all industry sectors in light, in particular, of the adoption of the UN Guiding Principles on Business and Human Rights in 2011.
Second, human rights protections are an integral part of the rule of law framework, which is one of the most significant considerations for multinationals when deciding whether or not to invest in a particular country. It is this framework that gives investors confidence that they are investing in a safe, secure and stable market (for more detail see the study conducted by Hogan Lovells in 2015 on Foreign Direct Investment and Rule of Law).
Third, while the demands of human rights compliance bring certain risks, they also bring opportunities. In particular, businesses with a good track record on human rights compliance issues may find that they are more successful, given customer and client expectations, than others who do not comply in the same way.
Fourth, embedding human rights into the culture of a business and its operations and targets can (in the medium to long term) make it more profitable. This can be achieved by increasing staff motivation and “buy-in”; promoting products or services as ethical or “purpose-driven” (as Unilever has been doing successfully) and improving reputation and standing in the market.
Fifth, corporates have significant power and influence and are increasingly being recognised, including by state governments, as having an important role to play in protecting human rights and supporting the advancement of the rule of law. In doing so businesses will have the opportunity to shape and influence regulation.
So, human rights can indeed be good for business and, irrespective of what happens in the UK to the Human Rights Act, human rights in both a domestic and international form look set to stay. Therefore, the challenge for businesses is to embrace human rights compliance and its potential benefits as well as to maximise the overseas investment opportunities that effective human rights protections in other states can bring.
The panellists were:
(Chair) Jon Snow – Broadcaster and journalist
Sir Mark Moody Stuart – Chairman, Hermes EOS
Christine Batruch – Vice President Corporate Responsibility, Lundin Petroleum AB
Charles Brasted – Partner, Hogan Lovells
Julianne Hughes-Jennett – Partner, Hogan Lovells