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In the latest installment of the Salzburg Questions for Corporate Governance series, human rights and sustainable development advisor Kayla Winarsky Green explores how executives can build stronger and more responsible companies
This article is part of the Salzburg Questions for Corporate Governance series, facilitated by the Salzburg Global Corporate Governance Forum
The COVID-19 pandemic has drawn attention to mutually reinforcing economic, social, and environmental outcomes while exacerbating inequalities. In a warning to corporate actors, Secretary-General of the United Nations, António Guterres, warned of an “unparalleled economic shock” (1) stemming from the crisis. Responding to these impacts, actors ranging from the United Nations to United States President-elect Joe Biden have publicly spoken out on the need to Build Back Better to reorder the post-pandemic world. This moment presents an opportunity for corporations to reflect on existing practices and human rights frameworks and analyze whether they are properly supporting employees and how they can strengthen one another.
The concept of Build Back Better has historically been employed in—among other endeavors— the United Nations’ Sendai Framework for Disaster Risk Reduction and former United States President Bill Clinton’s humanitarian program in Haiti. However, at this point, it connotes ensuring that all actions taken during and after the COVID-19 crisis include a strong focus on building more equal, inclusive, and sustainable economies and societies that are more resilient in the face of pandemics, climate change, and the many other global challenges we face.
Simultaneously, Build Back Better can also present an opportunity for corporations to emerge from the pandemic stronger. Speaking on the subject, Suphachai Chearavanont, head of the Thailand-based CP Group, noted “[w]ith every crisis comes opportunity, and this crisis could actually help business to transform, and come back better, and stronger. Leaders and managers can show that it is possible to maintain jobs and take care of employees, and that this is a perfect time to change the culture, move out of our comfort zones, and open up for positive change.” (2) Thus conceived, Build Back Better can be a “win-win,” enabling companies to become stronger and more responsible.
Further, Building Back Better was also listed by the United Nations Office of the High Commissioner for Human Rights (OHCHR) as a key consideration for mandatory human rights due diligence (MHRDD) regimes, which are growing in global prominence, including through ongoing efforts to impose MHRDD at the EU level. The OHCHR noted specifically that MHRDD is “a key tool in the global efforts to Build Back Better, since it enables companies to focus their attention on the most severe human rights risks and identify the human rights impact of their response to the Covid-19 pandemic.”(3)
One of the ways in which corporate actors can heed Chearavanont’s call to take care of employees and Build Back Better is by following the principles set out in Pillar II of the UN Guiding Principles on Business and Human Rights (UNGPs), which articulate a business’s responsibility to respect human rights.
Endorsed by the United Nations in 2011, the UNGPs provide a framework for human rights and transnational business enterprises. In June 2008, in response to an invitation by the Human Rights Council, UN Special Representative John Ruggie proposed a three-pillared framework on business and human rights consisting of the duty of the State to protect against human rights abuses by third parties, including businesses; the responsibility of corporations to respect human rights; and greater access to effective remedy, both judicial and non-judicial, for victims. The Human Rights Council unanimously approved the UN Guiding Principles in 2011.
The UNGPs are the first global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity and function as the internationally accepted framework for enhancing standards and practice regarding business and human rights.
Compliance with the UNGPs is also consistent with the proliferation of national laws speaking to human rights (such as the French Duty of Vigilance Law and the UK Modern Slavery Act, among others) as well as the values embodied in the August 2019 Business Roundtable Statement on the Purpose of a Corporation. The latter was signed by 181 CEOs who committed to leading their companies to benefit all stakeholders – customers, employees, suppliers, communities, and shareholders.
The widespread traction of the Business Roundtable Statement is a clear sign that treatment of employees is of key importance to corporate leaders. At the same time, the global popularity of the UNGPs and the growing body of national laws and proposed EU legislation shows that compliance with human rights standards is a day-to-day aspiration if not reality for corporate actors. Together the two can help corporations forge a path towards Building Back Better and can exemplify that the current pandemic can also present an opportunity to rebuild a stronger and more responsible company.
(1) What does ‘build back better’ really mean? One of the world’s top CEOs give us his take, UN News, 11 June 2020, available at: https://news.un.org/en/story/2020/06/1066152
(2) Id.
(3) Mandatory Human Rights Due Diligence Regimes: Some Key Considerations, Office of the High Commissioner for Human Rights, 7 June 2020, available at: https://www.ohchr.org/Documents/Issues/Business/MandatoryHR_Due_Diligence_Key_Considerations.pdf
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Kayla Winarsky Green, Esq. is an advisor in the Human Rights and Business department at the Danish Institute for Human Rights (DIHR). At DIHR, she advises leading multinational companies and investors on human rights and sustainable development and serves as a dedicated point person on the energy transition, anti-corruption and gender. Kayla is a practicing lawyer and a member of the New York Bar in good standing and served as a Docent in the University of Amsterdam School of Politics, Psychology, Law and Economics for the 2020 spring semester. She frequently publishes articles on various topics within business, human rights, and corporate governance and has provided expert commentary to journalists at publications including Law360 and Women’s Wear Daily. Prior to joining DIHR, she worked for several years as an associate in the Government Investigations practice group of King & Spalding, LLP, where she specialized in anti-corruption and was the founding member of the firm’s Business and Human Rights Initiative. Kayla earned her juris doctorate with a Certificate in Global Human Rights from the University of Pennsylvania Law School which included course work at the Graduate Institute of International and Development Studies in Geneva. Kayla is a Fellow of Salzburg Global Seminar.
The Salzburg Questions for Corporate Governance is an online discussion series introduced and led by Fellows of the Salzburg Global Corporate Governance Forum. The articles and comments represent opinions of the authors and commenters, and do not necessarily represent the views of their corporations or institutions, nor of Salzburg Global Seminar. Readers are welcome to address any questions about this series to Forum Director, Charles E. Ehrlich: cehrlich@salzburgglobal.org To receive a notification of when the next article is published, follow Salzburg Global Seminar on LinkedIn or sign up for email notifications here: www.salzburgglobal.org/go/corpgov/newsletter