Business and Human Rights

Showing respect for human rights, and implementing robust policies and processes to identify, prevent or mitigate adverse human rights impacts, are increasingly relevant to investor relations, brand management, access to finance, and to minimise the risk of litigation and reputational damage. When managed successfully, these can be a significant brand and business enabler.

Over recent years, there has been widespread business convergence around ‘soft law’ human rights principles and standards, such as the UN Guiding Principles on Business and Human Rights. In light of these, many businesses are refining their human rights policy commitments, and implementing them in earnest through due diligence processes, impact assessments and compliance systems.

At Linklaters we have been at the forefront of advising on these emerging themes. Click on the banners below for more information.

Human rights reporting

Background

Increasingly companies are required to be transparent about and report publicly on their business practices. This trend has gained significant momentum over recent years. Regulatory reporting requirements are expanding to cover social, community and human rights issues as well as information about related policies and their effectiveness. The “transparency in supply chains” provision of the UK’s Modern Slavery Act 2015 is a recent example.

We have an in-depth understanding of this area, from the systems that may need to be put in place to gather information, to the drafting and preparation of reports and statements and addressing any follow-up action taken by stakeholders.

Useful guides and insights

European Parliament votes in favour of mandatory conflict minerals due diligence and certification
The year in review – Developments in sustainability law and policy
Issues for Board Agendas 2015 
The Modern Slavery Act 2015: Are you ready to report on your supply chain?
Businesses with a turnover of £36m or more to report on modern slavery
The UK Modern Slavery Act: Increasing transparency in supply chains

Our most relevant recent experience

  • Advising a number of multinational companies on UK human rights reporting requirements, and the content of their strategic reports and sustainability reports
  • Assisting companies in the extractives and logging sectors to apply EU and UK requirements to report payments to governments, and designing methodologies to gather data from group companies

UN Guiding Principles on Business and Human Rights and other 'soft' law standards

Background

The UN Guiding Principles on Business and Human Rights (UNGPs) were endorsed by the UN in 2011. There has been widespread business convergence around them, and they are setting the standard for international corporate best practice in this area. Regulators are using them as a reference point with increasing frequency.

Linklaters has also partnered with the UN Global Compact to interview General Counsel across a wide range of organisations to develop a Guide for General Counsel on Corporate Sustainability. This provides practical guidance on how to advance corporate sustainability issues , while reinforcing the UN Global Compact’s Ten Principles that focus on human rights, amongst other things.

Useful guides and insights

Implementing the UN Guiding Principles on Business and Human Rights: challenges for businesses

Managing supply chain risks: human rights considerations
Looking beyond the corporate veil: parent company exposure to human rights litigation risk
Guide for General Counsel on Corporate Sustainability

Our most relevant recent experience:

  • Designing the methodology for and conducting a human rights impact assessment, with a focus on a proposed relationship with a defence sector customer
  • Assisting an energy company on human rights due diligence for the purposes of M&A transactions
  • Advising a FMCG company on human rights due diligence for the purposes of its joint venture arrangements and M&A activities
  • Advising a major ICT company on the design and implementation of a human rights compliance programme incorporating the requirements of the UN Guiding Principles on Business and Human Rights
  • Undertaking a gap analysis and benchmarking exercise for an extractives sector company to assess its position on key requirements under ‘soft laws’ on human rights

Human Rights policies

Background

A clear human rights policy commitment marks the foundation of a robust human rights risk management and compliance programme, and sets the “tone from the top” for an organisation’s approach to human rights issues. The UN Guiding Principles on Business and Human Rights require that a policy is approved at the most senior level, prepared with expert advice and made publicly available, amongst other things.

Increasingly, companies are developing and publishing specific human rights policies, or expanding existing policy commitments to cover human rights issues. But preparing a policy is only the beginning of the journey for most businesses. We help our clients design clear and concise policies that can be implemented in practice into their operations, business practices and ethos.

Useful guides and insights

Implementing the UN Guiding Principles on Business and Human Rights: challenges for businesses

Our most relevant recent experience:

  • Advising a transport company on the updating of its human rights policy, taking into account particular sensitivities around freedom of association 
  • Advising an energy company embarking upon developing a human rights policy, including in relation to treatment of indigenous peoples

Managing supply chain risks

Background

Companies are now looking beyond more traditional methods of supply chain management, which have focused on the commercial aspects of procurement and on contingency planning, with a view to ensuring favourable supply terms and business continuity. Ethical sourcing and supplier compliance with human rights standards are rapidly attracting greater scrutiny from a range of stakeholders, including investors, customers and NGOs.

The “transparency in supply chains” provision of the UK’s Modern Slavery Act 2015 has thrown this into sharp focus for many, and we have been leading the charge in advising companies on how to prepare for the incoming reporting requirements.

Useful guides and insights

The Modern Slavery Act 2015: Are you ready to report on your supply chain?
The UK Modern Slavery Act: Increasing transparency in supply chains
Managing supply chain risks: human rights considerations

Our most relevant recent experience:

  • Advising major corporations on US, EU and UK law and policy on modern slavery and human trafficking and their impacts on global supply chain
  • Developing supplier codes of conduct for a number of multinational corporations, some with supply chains incorporating particular areas of human rights risk

Human rights due diligence and impact assessment

Background

Due diligence is an important tool which can assist companies manage risks and compliance with laws, regulations and standards. The UN Guiding Principles on Business and Human Rights state that organisations have a responsibility to respect human rights by acting with due diligence to avoid infringing on the rights of others.

Understanding what type of due diligence to conduct, and when to conduct it, is critical to fulfilling this responsibility and effectively managing risks and impacts. We have helped our clients develop bespoke systems and methodologies to manage this process and advise on how to manage due diligence findings and challenging situations.

Useful guides and insights

European Parliament votes in favour of mandatory conflict minerals due diligence and certification
Equator Principles III: Environmental and social lender guidelines

Our most relevant recent experience:

  • Designing the methodology for and conducting a human rights impact assessment, with a focus on a proposed relationship with a defence sector customer
  • Assisting an energy company on human rights due diligence for the purposes of M&A transactions
  • Advising a FMCG company on human rights due diligence for the purposes of its joint venture arrangements and M&A activities

Compliance systems and risk management

Background

A range of soft law standards require businesses to respect human rights and set clear practical expectations by providing a framework within which companies can build structured processes to identify and manage their impacts.
We have been advising forward-thinking companies on the review of their risk management and compliance systems to ensure that they take human rights issues into account. Where gaps are identified, we are helping them design and implement new measures, or upgrade existing systems, to ensure that they are able to manage their impacts and eliminate or mitigate risks to their, and their stakeholders’, satisfaction.

Useful guides and insights

Human rights risks and impacts: How to build an effective management system

Guide for General Counsel on Corporate Sustainability

Linklaters has also partnered with the UN Global Compact to interview General Counsel across a wide range of organisations to develop a Guide for General Counsel on Corporate Sustainability. This provides practical guidance on how to advance corporate sustainability issues , while reinforcing the UN Global Compact’s Ten Principles that focus on human rights, amongst other things. 

Our most relevant recent experience:

  • Advising a major ICT company on the design and implementation of a human rights compliance programme incorporating the requirements of the UN Guiding Principles on Business and Human Rights
  • Undertaking a gap analysis and benchmarking exercise for an extractives sector company to assess its position on key requirements under ‘soft laws’ on human rights

Human rights and major projects

Background

As financial institutions increasingly recognise that environmental, social and governance issues are relevant to credit risk and reputational risk, sustainable finance is fast becoming the benchmark for global financial and investment transactions particularly in the extractive and infrastructure sectors. Recent revisions to soft law standards in this area explicitly incorporated references to human rights.

We have the leading team on soft law standards and we are acutely aware of the need for both borrowers and financial institutions to consider and report on the environmental and social impact of their activities and to frame contractual requirements in a practical and commercial way.

Useful guides and insights

Equator Principles III: Environmental and social lender guidelines

Our most relevant recent experience:
 
  • Advising on the application of social and human rights aspects of the Equator Principles, IFC Performance Standards and OECD Common Approaches on a range of market-leading project financings 
  • Advising an agri-commodities corporation on legal risks associated with modern slavery allegations made against a target company and drafting relevant contractual protections in M&A documentation
  • Advising companies on the potential human rights implications of stabilisation arrangements 
  • Advising on resettlement, land rights and processes for free prior informed consent of indigenous peoples.
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