For all those involved in the business and human rights agenda, it is an inconvenient truth that not all business actions on human rights make a difference. Even the best-intended ones can have little to no effect. Some may even cause harm, instead of mitigating risk. Better evaluation of business’ performance on human rights is therefore key.
Yet, too often companies measure their human rights performance based on what is most immediate to them and easy to count: the number of policies, people trained or non-compliance with codes. But that doesn’t really tell us much about whether people’s lives are better or worse off. Nor does it tell us if efforts to embed respect for human rights are translating into new, rights-respecting behaviour.
For this reason, Shift’s Valuing Respect global initiative was established to find better ways to evaluate business respect for human rights, which is the core of any company’s social impact. For the past three years, we have worked with companies, investors, civil society, academics and other stakeholders to develop indicators, tools and guidance to transform evaluation and put outcomes for affected people at the center.
The resulting tools, all publicly available and free to use, address two distinct but critical measurement questions: First, whether companies are wired to respect human rights. Second, whether positive impacts in people’s lives are being achieved.
Are companies wired to respect human rights?
A company might have a good set of policies and processes in place to set expectations on what should happen in terms of identifying and addressing risks to people in their operations and value chain. But if companies are not wired, at the level of their business model, leadership and culture, to respect human rights, then what actually happens can be quite different.
We have developed two sets of indicators with accompanying guidance to help business leaders, investors and other stakeholders to evaluate companies with this in mind:
- First, the Business Model Red Flags indicators, can help identify ways in which risk to people may be rooted in how a company is designed to create and deliver value. There are 24 red flags in the series, each accompanied by a high-level overview; a risk analysis; an opportunity analysis; and examples and ideas on how to take action to address business-model related risks.
- Second, the Leadership and Governance Indicators, which canhelp companies and other stakeholders assess whether a company is building and maintaining a culture of respect for people. There are 22 indicators designed as a menu for organizations to draw from, as relevant to their needs. Each indicator offers practical guidance, including a short explanation; diagnostic questions for leaders; types of application; and suggestions of where to find relevant data sources exists to help businesses in assessing against the indicators.
Are company efforts achieving positive impacts on people’s lives?
Companies need to track whether their efforts to address human rights risks in their operations and value chains are in fact delivering better outcomes for people. And when companies do this, practitioners can continuously improve their human rights programmes, executives can make robust decisions about where to allocate resources and disclosures can better inform external stakeholders. The problem is that companies tend to be stuck using indicators about the reach and implementation of activities (how they are carrying out their work) and hold limited data about outcomes such as numbers of incidents of harm.
We have now piloted and released two tools intended to support a step-change in evaluating impact.
- First, the Indicator Design Tool, which can help companies develop targets and indicators that focus on improving outcomes for workers, communities and consumers. The tool can be applied to a wide range of efforts aimed at preventing, mitigating and remediating human rights impacts, regardless of industry, operating context or human rights issue.
- Second, the Quality of Relationships series: A collection of case studies and methods that showcase how companies can generate and act on data about the dimensions of company relationships with affected stakeholders that are often intangible, such as trust, respect and feelings of agency.
Learn more and use the tools
Since the release of the tools, we’ve held numerous sessions with a wide array of stakeholders to socialise the tools, including with the ETI. Recordings from the sessions on each of these tools are now available to watch online:
- Indicator Design Tool
- Assessing the Quality of Relationships
- Business Model Red Flags
- Leadership & Governance Indicators
If you want to learn more about the tools and how to apply them to improve what we measure and what we do to advance responsible and resilient supply chains, please visit: https://shiftproject.org/what-we-do/valuing-respect/
Later this year, Shift will be hosting a three-part virtual training session for companies interested to apply the Indicator Design Tool in their work. To express interest in participating, please email Clare.Fitton@eti.org.uk