To describe where, within the company, those individuals with daily responsibility for human rights are located and their reporting lines to more senior decision-making levels, and to explain how this structure helps the company make respect for human rights part of how it conducts business.

This question is distinct from question C4.1, which looks at how those people in different parts of the company whose decisions and actions can affect human rights are involved in managing them. It is also distinct from question A1.1 where the company can report on the level within the company at which the public commitment to respect human rights was signed off. In this question, the focus is on day-to-day responsibility and accountability from the operational level up through senior management.

Companies can organize overall responsibility for human rights issues in a number of different ways, depending on a range of considerations. There may be more than one point of responsibility, for example, human resources for human rights issues related to employees and contract workers, and a different function in relation to external stakeholders, such as social compliance or community relations. Certain functions may have a particular kind of responsibility, for example, ethics, compliance or internal audit. In larger companies, there may be different leads in different business units, operating sites, or regional or country offices, as well as at the corporate level. There will typically be reporting lines between the individual(s) with operational responsibility and a more senior position with overall accountability for performance (that is, the most senior position with explicit decision-making responsibility). It will be particularly helpful to explain how the structure chosen by the reporting company fits its particular systems and culture.

Relevant information for the company could include:

• Which staff position or business function has day-to-day responsibility for human rights within the company (e.g., corporate responsibility and sustainability, legal, ethics and compliance, external affairs, internal audit, and/or a specific position within the function);
• Specific responsibilities of this staff position or business function for daily management of human rights;
• The most senior level of oversight and accountability for human rights within the company (if different from the position with day-to-day responsibility);
• The rationale for the company’s choice of how it organizes the responsibility for human rights;
• Any evidence that this choice of how to organize the responsibility assists the company in making respect for human rights part of how it conducts business on a day-to-day basis.

UN Guiding Principle 19 provides that:

“In order to prevent and mitigate adverse human rights impacts, business enterprises should integrate the findings from their impact assessments across relevant internal functions and processes, and take appropriate action.

(a) Effective integration requires that:

i. Responsibility for addressing such impacts is assigned to the appropriate level and function within the business enterprise;

ii. Internal decision-making, budget allocations and oversight processes enable effective responses to such impacts.”

The commentary to UN Guiding Principle 19 states that:

“The horizontal integration across the business enterprise of specific findings from assessing human rights impacts can only be effective if its human rights policy commitment has been embedded into all relevant business functions. This is required to ensure that the assessment findings are properly understood, given due weight, and acted upon.”

Please note:

1. Assurance provided at the higher tiers should include indicators from lower tiers.
2. These indicators are supported by further notes in the Microsoft Excel version of the indicators. For all support materials on assurance of human rights performance and reporting, please see our website section on assurance.

TIER ONE ASSURANCE

• The function in which the company has located lead responsibility for human rights performance is well positioned to help embed respect for human rights across the company’s operations and value chain.
• There is evidence that the most senior person with accountability for human rights issues:
  • has a say in business decisions that are likely to have significant human rights implications
  • is able to engage with managers in all parts of the business where human rights are most likely arise
  • has access to the Board and senior management, when necessary, on significant human rights issues
• Any formal structure(s) (such as cross-functional committees) with a mandate to address human rights risks:
  • include representatives of those functions, departments or business units most relevant for addressing the human rights risks concerned
  • have access, to the greatest extent possible, to the internal information necessary to understand and address the human rights risks concerned

TIER TWO ASSURANCE

• There is evidence that the function in which the company has located lead responsibility for human rights performance has, in practice, helped the company to prevent or effectively mitigate its salient human rights risks.
• There is evidence that the most senior person with accountability for human rights issues:
  • is known by managers in all parts of the business where human rights risks are most likely to arise
  • has engaged with managers in those parts of the business where human rights risks are most likely to arise
• There is evidence that any formal structure(s) (such as cross-functional committees) with a mandate to address human rights risks, has, in practice, influenced the decisions and actions of the company in ways that reduce those risks.

TIER THREE ASSURANCE

• There is evidence that the most senior person with accountability for human rights issues:
  • has been able to influence business decisions and actions that have significant human rights implications

To provide the reader with a sense of when, why and in what ways the most senior levels of the company’s management and governance structures would become involved in addressing human rights-related issues and, therefore, how those individuals see their role in supporting respect for human rights within the company.

Not all human rights issues can be, or need to be, discussed at the most senior levels of the company. This question provides the opportunity for the reporting company to explain its general approach and/or specific criteria for escalating human rights issues within the company.

The term ‘Board’ is used to designate the highest-level governing authority of the business. Where this is not the Board, the reporting company should make this clear and answer the questions with reference to whatever other authority has this governance role.

There may be a number of issues that are discussed at the senior management and Board levels that are not seen as human rights issues per se, but which have the potential to impact human rights, for instance, discussions of supply chain strategy and the company’s business approach to emerging markets. In other discussions, it will be more directly apparent that a human rights issue is being discussed, for instance, in the case of a grievance lodged by a neighboring community in a country of operation, or discussion of how to respect human rights in the case of a national law that itself breaches human rights standards (e.g., non-discrimination against women or freedom of association).

This question is distinct from question C4.2, which focuses on the company’s salient human rights issues and asks how any tensions between the prevention of impacts and other business objectives are addressed. Question A2.2 is a more general question for the company to describe and illustrate when and how senior management and/or the Board take a role in addressing any human rights issues, whether due to tensions with other business objectives or for other reasons.

Relevant information for the company’s answer could include:

• Processes, indicators and/or criteria that the company uses to determine which issues are discussed by senior management or the Board;
• Examples of specific human rights issues discussed and/or examples of trends in types of human rights issues discussed at the senior management and Board levels during the reporting period;
• Information on whether any of the salient human rights risks or additional severe impacts identified in Part B were discussed at the senior management or Board level during the reporting period;
• Any principles or systems that dictate when and how senior management and/or the Board address dilemmas arising from tensions between respect for human rights and other business interests;
• Any examples of how a particular tension between respect for human rights and other business considerations was addressed by senior management and/or the Board during the reporting period.

UN Guiding Principle 19 provides that:

“In order to prevent and mitigate adverse human rights impacts, business enterprises should integrate the findings from their impact assessments across relevant internal functions and processes, and take appropriate action. […]

(b) Effective integration requires that:

i. Responsibility for addressing such impacts is assigned to the appropriate level and function within the business enterprise;

ii. Internal decision-making, budget allocations and oversight processes enable effective responses to such impacts.”

The commentary to UN Guiding Principle 19 states that:

“The horizontal integration across the business enterprise of specific findings from assessing human rights impacts can only be effective if its human rights policy commitment has been embedded into all relevant business functions. This is required to ensure that the assessment findings are properly understood, given due weight, and acted upon.”

Please note:

1. Assurance provided at the higher tiers should include indicators from lower tiers.
2. These indicators are supported by further notes in the Microsoft Excel version of the indicators. For all support materials on assurance of human rights performance and reporting, please see our website section on assurance.

TIER ONE ASSURANCE

• Discussions among senior management and the Board on human rights issues have centred on the company’s salient human rights issues, significant new or evolving human rights risks, and any severe impacts that have occurred.
• Any significant new or evolving human rights risks or severe impacts that have occurred in the period under assessment:
  • have been discussed by senior management and the Board
• There are processes through which people can raise concerns about internal pressures to act contrary to the company’s responsibility to respect human rights, and which:
  • are open to all employees and contract workers
  • are accessible in the languages spoken by employees and contract workers
  • do not limit the type of human rights issue that can be addressed
  • provide for confidentiality and non-retaliation
  • offer clarity on how concerns will be addressed
  • enable the issues to be escalated to senior management and, where appropriate, the Board

TIER TWO ASSURANCE

• Any significant new or evolving human rights risks or severe impacts that have occurred in the period under assessment:
  • have been addressed in a manner designed to support respect for human rights by the company
  • have had appropriate follow-up action to monitor results
• There is evidence that any processes through which people can raise concerns about internal pressures to act contrary to the company’s responsibility to respect human rights:
  • are known to employees and contract workers
  • are viewed by employees and contract workers as processes they would feel confident in using

TIER THREE ASSURANCE

• There is evidence that any processes through which people can raise concerns about internal pressures to act contrary to the company’s responsibility to respect human rights:
  • have led to concerns being addressed in a manner that supports respect for human rights

To explain how the reporting company’s high-level public commitment is translated into terms that are understandable for those working for the company and how they are equipped and motivated to implement the commitment in their daily work.

This question is distinct from question A1.3, which addresses the dissemination of the company’s public policy commitment to those for whom it is relevant, including people working for the company who have a role to play in its implementation. This question moves beyond their awareness of the policy’s existence to consider how they are enabled to understand its implications for their own decisions and actions. These implications will be different for those working in different functions or business units, for example in human resources, finance or accounting, procurement, legal or particular operational divisions.

Relevant information for the company’s answer could include:

• The means through which the company helps its workforce understand how their own decisions and actions can support (or hinder) implementation of the public policy commitment to respect human rights (e.g., internal policies, guidance documents, training, e-learning, human rights champions);
• Any examples of how these efforts are tailored to particular roles, functions or business units within the company;
• Any way in which the company seeks to share lessons learned about addressing actual impacts about reducing human rights risks and addressing actual impacts (e.g., case studies on the company’s intranet, videos highlighting lessons learned, peer sharing, cross-functional meetings);
• Any incentives for the company’s workforce, including senior management, to ensure they act with respect for human rights (e.g., internal recognition, performance metrics, performance evaluation, linking evaluation to remuneration and promotion opportunities);
• Any relevant ‘speak-up’ procedures or whistle-blowing mechanism to enable and/or encourage individuals to raise concerns internally regarding respect for human rights;
• How any tensions with other incentives driving the workforce are managed, (e.g., time pressures, cost pressures, other internal metrics that drive individual performance and which may, at times, be at odds with measures to respect human rights).

UN Guiding Principle 19 provides that:

“In order to prevent and mitigate adverse human rights impacts, business enterprises should integrate the findings from their impact assessments across relevant internal functions and processes, and take appropriate action.

(a) Effective integration requires that:

iii. Responsibility for addressing such impacts is assigned to the appropriate level and function within the business enterprise;

iv. Internal decision-making, budget allocations and oversight processes enable effective responses to such impacts.”

The commentary to UN Guiding Principle 19 states that:

“The horizontal integration across the business enterprise of specific findings from assessing human rights impacts can only be effective if its human rights policy commitment has been embedded into all relevant business functions. This is required to ensure that the assessment findings are properly understood, given due weight, and acted upon.”

The commentary to UN Guiding Principle 16 states that:

“Internal communication of the statement and of related policies and procedures should make clear what the lines and systems of accountability will be, and should be supported by any necessary training for personnel in relevant business functions.

Just as States should work towards policy coherence, so business enterprises need to strive for coherence between their responsibility to respect human rights and policies and procedures that govern their wider business activities and relationships. This should include, for example, policies and procedures that set financial and other performance incentives for personnel; procurement practices; and lobbying activities where human rights are at stake.

Through these and any other appropriate means, the policy statement should be embedded from the top of the business enterprise through all its functions, which otherwise may act without awareness or regard for human rights.”

Please note:

1. Assurance provided at the higher tiers should include indicators from lower tiers.
2. These indicators are supported by further notes in the Microsoft Excel version of the indicators. For all support materials on assurance of human rights performance and reporting, please see our website section on assurance.

TIER ONE ASSURANCE

• The company provides employees and contractors whose actions or decisions affect human rights risks with operating procedures or other guidance on how to address those risks, which is:
  • clear and understandable to non-experts in human rights
  • appropriate to the functions or roles of the target audience
  • aligned with international human rights standards
• Human rights-related training and updates are:
  • provided, at a minimum, to employees and contractors whose work regularly involves actions or decisions with human rights implications
  • tailored, as necessary, to recipients’ functions
  • aligned with good human rights practice
  • designed to help recipients understand how to respond when issues arise
• Guidance is available to employees and contractors on what to do when they identify tensions between respect for human rights and other performance requirements.
• Performance incentives related to human rights risk management:
  • are part of evaluations for those employees or contract workers who have lead responsibility within the company for human rights-related issues
  • are part of evaluations for those employees or contract workers whose work regularly involves actions or decisions with human rights implications
  • reflect the company’s salient human rights issues and/or the most significant human rights risks related to the individual’s responsibilities
  • include KPIs for assessing how well the relevant issues are managed
• There is evidence that human rights-related performance incentives for employees or contract workers:
  • are given reasonable weight in relevant compensation schemes or other reward systems to which they apply

TIER TWO ASSURANCE

• There is evidence that employees and contractors whose actions and decisions can affect human rights risks:
  • understand the guidance or operating procedures and its significance for implementing the company’s human rights commitment
  • understand the importance for the business of implementing the company’s human rights commitment
  • feel equipped to implement the guidance or operating procedures
• There is evidence that employees and contractors who have received training and/or updates on human rights-related issues:
  • have understood what the substance of the training or updates was about
  • have understood the relevance of the training or updates to their own work
  • feel equipped to implement what they have learned
• There is evidence that when employees or contractors perceive a tension between respect for human rights and other performance requirements:
  • they either know how to resolve the tension appropriately, or know where to take the issue for further guidance
• There is evidence that human rights-related performance incentives for employees or contract workers:
  • positively influence the awareness and decisions of employees and contractors in relation to human rights risks

TIER THREE ASSURANCE

• There is evidence that when employees or contractors perceive a tension between respect for human rights and other performance requirements:
  • such tensions have, in practice, been raised and addressed at an appropriate level within the company

To explain how the reporting company conveys to business partners, suppliers, customers and others with which it has business relationships the particular relevance of its public human rights commitment, so as to engage their interest and motivate them to support its implementation through their own decisions and actions.

This question relates to any third party with which the company has a business relationship, including other companies, governments or government agencies, and both direct and indirect relationships (for example, at different tiers of its upstream and downstream value chain).

This question addresses both how these third parties are made aware of the company’s own commitment to respect human rights and how they are supported or incentivized to act in accordance with that commitment.

Relevant information for the company’s answer could include:

• The way in which human rights considerations inform company decisions to enter into or terminate a business relationship;
• The means through which the company conveys to third parties with which it has business relationships the intent and content of its commitment to respect human rights (e.g., a code of conduct, terms of a contract, capacity-building work);
• What specific aims or expectations the company has of those it works with directly or indirectly with regard to the implementation of its commitment to respect human rights;
• Any processes through which the company helps enable relevant third parties to act with respect for human rights (e.g., capacity-building, peer sharing, collaborative initiatives, technical support);
• Any way in which the company ensures it does not hinder other companies from respecting human rights (e.g., through intentional or unintentional pressure or incentives to overlook human rights issues);
• Any way in which the company ensures it does not hinder governments or other State entities from protecting human rights (e.g., through pressure in the negotiation of contract terms, lobbying against regulations aimed at improving human rights protections);
• Any incentives through which the company motivates business partners to act with respect for human rights (e.g., price premiums, increased orders or longer contracts with suppliers, repeat business, public recognition).

UN Guiding Principle 13 provides that:

“The responsibility to respect human rights requires that business enterprises:

(a) Avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur;

(b) Seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.”

The commentary to UN Guiding Principle 13 states that:

“Business enterprises may be involved with adverse human rights impacts either through their own activities or as a result of their business relationships with other parties. Guiding Principle 19 elaborates further on the implications for how business enterprises should address these situations. For the purpose of these Guiding Principles a business enterprise’s “activities” are understood to include both actions and omissions; and its “business relationships” are understood to include relationships with business partners, entities in its value chain, and any other non-State or State entity directly linked to its business operations, products or services.”

The commentary to UN Guiding Principle 16 states that:

“The statement of commitment should be publicly available. It should be communicated actively to entities with which the enterprise has contractual relationships; others directly linked to its operations, which may include State security forces; investors; and, in the case of operations with significant human rights risks, to the potentially affected stakeholders.”

Please note:

1. Assurance provided at the higher tiers should include indicators from lower tiers.
2. These indicators are supported by further notes in the Microsoft Excel version of the indicators. For all support materials on assurance of human rights performance and reporting, please see our website section on assurance.

TIER ONE ASSURANCE

• The company articulates clearly in written communications to business partners:
  • its own commitment and policies regarding respect for human rights
  • any particular expectations it has of its business partners with regard to meeting this commitment
• The company has systems to screen the partners with which it does business that are based on human rights-related criteria and which:
  • consider all human rights
  • assess the capacity and intention of the partners to act with respect for human rights
• There is evidence that any systems through which the company screens the partners with which it does business, based on human rights-related criteria:
  • inform decisions on who the company will do business with
  • inform decisions on the terms on which the company does business with those partners
  • inform the provision of capacity-building or other forms of engagement with partners to address gaps or weaknesses
• There is evidence that the company endeavours to include, in new or renewed contracts with business partners, human rights provisions that:
  • are aligned with international human rights standards
• There is evidence that the company secures human rights provisions in new or renewed contracts with business partners where human rights risks are identified or known to be likely, and that it does so:
  • as a matter of routine where this is largely within the control of the company
• There is evidence that the company monitors whether business partners adhere to human rights provisions in contracts.

TIER TWO ASSURANCE

• The company has systems to screen the partners with which it does business that are based on human rights-related criteria and which:
  • where necessary, prioritize for assessment those business relationships where the risk to human rights is significant
• There is evidence that the company endeavours to include in new or renewed contracts with business partners human rights provisions that:
  • encompass all human rights or at least those that might reasonably be judged to be at risk in the context of the relevant type of business relationship
• There is evidence that the company secures human rights provisions in new or renewed contracts with business partners where human rights risks are identified or known to be likely, and that it does so:
  • in a reasonable proportion of contracts that are subject to negotiation and where the company’s control of the terms is limited
• The company’s efforts to monitor implementation of human rights provisions in its contracts with business partners show that these terms are typically adhered to.
• There is evidence that the company takes care to ensure that the terms it demands of business partners do not themselves make it challenging for those partners to respect human rights.

TIER THREE ASSURANCE

• There is evidence that the company’s business partners whose own activities pose the greatest risk to human rights:
  • are aware of the company’s policies or other expectations of them regarding respect for human rights
  • understand what these policies or expectations mean for them in practice
  • believe that the company is sincere in its human rights policies and expectations
• There is no evidence that the company has imposed terms on a business partner that have reduced its ability to respect human rights.

To explain whether experiences or other insights that the reporting company has gained during the reporting period have led to improvements in the management of human rights impacts that should help the company better to meet its responsibility to respect human rights over time.

Meeting the responsibility to respect human rights is typically an ongoing challenge requiring continuous improvement based on learning. This requires a dynamic approach to the management of human rights risks that readers will be looking to see reflected in the reporting company’s disclosure. Demonstrating that lessons are being learned and implemented is a key way of showing that the company is progressing in its efforts and, therefore, meeting the expectations of its various stakeholders.

Lessons learned might come from the reporting company’s own activities, including in relation to its value chain, from feedback received from affected or potentially affected stakeholders, the experience of peers in the industry, or from expert reports or informal feedback about emerging challenges or successful innovations. The results of these lessons might include changes made (or planned) to any of the processes described in response to other questions in this Framework. This question offers an opportunity to describe forward-looking plans or targets for continued improvement in the next reporting period or beyond.

Relevant information for the company’s answer could include:

• Specific experiences or insights that have changed the company’s approach to managing one or more human rights impacts;
• Changes made or planned to a policy, process or practice in order to better manage one or more human rights impacts.

UN Guiding Principle 20 provides that:

“In order to verify whether adverse human rights impacts are being addressed, business enterprises should track the effectiveness of their response. Tracking should:

(a) Be based on appropriate qualitative and quantitative indicators;

(b) Draw on feedback from both internal and external sources, including affected stakeholders.”

The commentary to UN Guiding Principle 20 states that:

“Tracking is necessary in order for a business enterprise to know if its human rights policies are being implemented optimally, whether it has responded effectively to the identified human rights impacts, and to drive continuous improvement.

Business enterprises should make particular efforts to track the effectiveness of their responses to impacts on individuals from groups or populations that may be at heightened risk of vulnerability or marginalization.

Tracking should be integrated into relevant internal reporting processes. Business enterprises might employ tools they already use in relation to other issues. This could include performance contracts and reviews as well as surveys and audits, using gender-disaggregated data where relevant. Operational-level grievance mechanisms can also provide important feedback on the effectiveness of the business enterprise’s human rights due diligence from those directly affected (see Principle 29).”

Please note:

1. Assurance provided at the higher tiers should include indicators from lower tiers.
2. These indicators are supported by further notes in the Microsoft Excel version of the indicators. For all support materials on assurance of human rights performance and reporting, please see our website section on assurance.

TIER ONE ASSURANCE

• The company has formal processes through which it identifies lessons in managing human rights risks and impacts, which are designed to:
  • look for both successes that can be replicated and failures that need to be addressed
  • involve the internal and/or external stakeholders necessary to adequately understand the lessons
  • enable the company to identify underlying factors in the success/failure, as far as possible
  • support learning across the company as a whole

TIER TWO ASSURANCE

• There is evidence that any processes through which the company has identified lessons in managing human rights risks and impacts:
  • have been triggered where significant human rights risks or severe impacts have arisen in relation to the company’s operations or supply chain
  • have also enabled successes to be identified
  • where relevant, have identified lessons within the company’s broader industry or operating environment
  • have led to the dissemination of lessons to relevant employees, contract workers, and external parties

TIER THREE ASSURANCE

• There is evidence that any processes through which the company has identified lessons in managing human rights risks and impacts:
  • have involved people with relevant information and varying perspectives in assessing the lessons
  • have enabled insight into underlying factors for the success/failure
  • have led to appropriate changes to policies, processes or practices where lessons learned indicate that this is necessary to avoid future human rights harm