Impacting investing: trends, issues and capabilities
Human rights-based strategies are designed to redress deeply ingrained inequalities, and they aim to enable everyone to participate fully in economic, social and cultural affairs towards the progressive realisation of rights.
Human rights entail both rights and obligations. Generally, government assumes obligations and duties under domestic and international law to respect, protect and fulfil human rights. At the individual level, while we are entitled to our human rights, we need also to respect the human rights of others.
The responsibility to fulfil the rights and obligations in practice necessitates collective action – by government, business, civil society and individuals – to facilitate the enjoyment of basic human rights.
Human rights-based approaches cut across sectors and draw from multiple strategies. They may require legal or policy reform to create enabling environments; the identification and capacity building of stakeholders; comprehensive programmes for education, health, literacy, advocacy and empowerment; or more participatory accountability and oversight mechanisms. The system of global governance has struggled for more than a generation to adjust to the expanding reach and growing influence of multi-national organisations.
The most visible embodiment of globalisation is the shift in sovereignty, which has accompanied globalisation and means that non-government stakeholders are involved more than ever, in issues relating to human rights. This development has posed challenges to human rights law, because for the most part, the law was designed to restrain abuses by powerful governments and agents.
While globalisation has enhanced the ability of civil society to function across borders and promote human rights, other stakeholders have inevitably gained the power to violate human rights in unforeseen ways.
Thus, there are now clear and growing tensions between complex, multi-stakeholder-based approaches, which seek to close the gaps in human rights and development, and a growing economic and political imperative to demonstrate efficiency, effectiveness and return/results from investments.
Multi-nationals operate in more countries than ever before, and increasingly in socio-political contexts that pose entirely new human rights challenges. For many companies, going global has meant adopting networkbased operating models involving multiple entities, and spread across and within countries.
Networks, by their very nature, involve divesting a certain amount of direct control over operations and therefore, substituting negotiated relationships for internally governed structures. Although this organisational model has enhanced economic efficiency, it has also increased the challenges companies face in managing their global value chains.
Operating transparently with the full range of activities required to bring a product or service from conception to end use, is no easy feat. As the number of participating units in a value chain increases, so too, does the potential vulnerability of the global enterprise as a whole.
Business typically dislikes binding regulations until it sees the necessity, or inevitability of them. Globalisation and global momentum has fuelled escalating reports and evidence of corporate human rights abuses, and hence ‘soft’ guidance has had to evolve into a legal framework of duties, in relation to human rights governance.
Meeting the standards
The UK’s Modern Slavery Act, the imminent launch of the EU’s Human Rights Act, together with the UN Global Compact principles, has emerged as a (global) standard for companies’ management of their human rights impacts. Under these legal and guiding frameworks, companies are expected to ‘know and show’ that they do not infringe on human rights through their operations or business relationships.
Human rights impact assessments represent a key first step in meeting this expectation. As human rights increases as a priority among our clients, we advocate innovative approaches and strategic thinking, coupled with pragmatic initiatives to map, track, align and increase impact.
The landscape is always shifting, and our role supports clients in a range of engagements, which enable energy and effort to be expended on opportunities that advance the rights of all people, and not only focus on keeping up with the latest trends.
Acknowledging government as the primary duty bearer, businesses and organisations have corresponding legal duties, in areas ranging from international humanitarian law, through civil, political, economic, social and cultural rights, to consumer protection and environmental practices. Essentially, it is rigorous application of due diligence within their sphere of activity and influence.
Human rights are rights inherent to all human beings, whatever their nationality, place of residence, sex, national or ethnic origin, colour, religion, language, or any other status. We are all equally entitled to our human rights without discrimination.
In today’s global marketplace, these rights are all interrelated, interdependent and indivisible. In a recent report Advancing Human Rights: Update on Global Foundation Grantmaking, the funders that were surveyed focussed on equality and freedom from discrimination (15%) and general human rights programmes (13%). This was followed by health and well-being (11%) and sexual and reproductive health rights (9%).
Programme areas receiving the least amount of funding include transitional justice and peacebuilding (2%); expression and information rights (4%); and migration and displacement (6%).
Progress towards these objectives is inextricably tied to efforts to meet the new Sustainable Development Goals (SDGs), including those pertaining to nutrition and food security (Goal 2), health (Goal 3), education (Goal 4), gender equality (Goal 5), water and sanitation (Goal 6) and global inequalities within and across countries (Goal 10).
The SDGs predecessor, the Millennium Development Goals (MDGs), reflected a progressive sentiment of ‘what gets measured gets done’. As the world slowly recovers from a global meltdown, the need for proven interventions, guaranteed returns on investment, and clear and measurable results, has become more pronounced. And herein lies the challenge.
To address this challenge, a framework that allows us to measure ‘results’ in a holistic way is needed – one that offers a more nuanced understanding of the impact of human rights-based approaches and their complexity, as well as their context, multi-sector application and evolving nature.
We advocate, that the impact of human rights-based approaches is best measured across a spectrum of change – at the individual, programmatic, structural and societal levels.
Companies can no longer ignore activists. As part of their due diligence, when conducting human rights impact assessments, they can include, for example, undertaking vigorous stakeholder consultation. International standards have emerged to require companies to talk to communities, but at times, governments intervene and claim to speak on their behalf. In other cases, communities are not interested in engaging with companies. Companies also find it difficult to identify who can speak legitimately for a specific community.
At times, communities lack capacity to engage with companies. They may not have the same expertise that companies do, and may also be in a weaker position than their government, and powerless to demand accountability for provision of basic services or protection of human rights.
This presents an opportunity for companies to partner with diverse stakeholders – multilateral and bilateral institutions, as well as civil society organisations – to become aware of community needs and establish capacity building programmes that meet communities’ needs, and align with business needs.
Progressive companies are increasingly seeking to form long-term relationships, and work in partnership with their suppliers to improve practices. Often, these efforts are hampered by complex supply chains, because the main business is distanced from their operations on other continents, in different environments and answerable to different regulations. However, such efforts need to be praised. They play a vital role in inspiring and pioneering the way for less progressive companies.
Companies do not always have leverage. Many operate with relatively small capacity and with a diverse supplier base, and such companies have limited ability to effect change. However, addressing this issue is no longer optional.
Human rights terminology and indicators are often used to monitor and measure non-compliance with international standards, and are rarely used to demonstrate the positive effect of applying human rights approaches.
While an impact framework is a useful methodology for tracing and linking human rights-shaped interventions to outcomes, we know that evidence of impact alone is often not enough.
There is pressure driving the need for a different approach to addressing human rights issues and their impact; where a better understanding of human rights needs to be in focus, rather than focusing solely on the extent to which human rights violations undermine efforts.
At the heart, there is a need to reconcile the still very disparate ways in which we look at human rights. We need to use this understanding to develop more effective ways to trace and assess the many and varied contributions human rights make, beyond purely evidence of impact.
Realising human rights goals requires a powerful mix of factors – strategic moments of political and social change, evidence-based investments and interventions, an alignment of shared values and collective action, as well as a conscious acknowledgement that every human being is worthy of respect and opportunity.
This article first appeared in Philanthropy Impact Magazine issue 15. Download this article as a PDF.