C3 Assessing Impacts Overarching question C3 — How does the company identify any changes in the nature of each salient human rights issue over time? Objective × To provide additional information about how the reporting company keeps each salient issue under review and identifies any changes in the potential severity or likelihood of impacts over time and across its activities and business relationships. Supporting guidance × The reporting company has already described, in response to Section B2, how it identified the salient human rights issues on which it is reporting: those human rights that are at risk of the most severe negative impact through the company’s activities or business relationships. This question is about reporting on how it identifies changes in the level of risk associated with those salient issues over time. Under the UN Guiding Principles, the severity of an impact is determined by one or more of three characteristics: A. its scale: the gravity of the impact on the human right(s); B. its scope: the number of individuals that are or could be affected; C. its remediability: the ease with which those impacted could be restored to their prior enjoyment of the right(s). A number of factors may change either the potential severity of a salient issue or its likelihood. For example, the company may enter a new market where laws or social practices place the right at greater risk; it may undertake a new acquisition or joint venture in a location or with another company that brings added risk; it may expand into new product areas or sell products to new customers that carry a greater risk of abusive use of the product; it may be subject to changes in certain operating environments such as increases in conflict or significant changes in democratic freedoms. The reporting company does not need to give specific details of changes where doing so jeopardizes delicate situations, for example, if naming a government that is abusing human rights would jeopardize the company’s ability to do business within the country. However, the company can nevertheless use this question to reflect in more general terms on how it goes about keeping up to date with such changes in the risk environment, and incorporating them into its assessments of its salient human rights issues over time. Relevant information × Relevant information for the company’s answer could include: Processes through which the company identifies changes in the type or level of risk to human rights associated with its salient human rights issues (e.g., periodic repeat impact assessments; engagement with relevant stakeholders; patterns and trends in complaints received; responsiveness to political developments; due diligence as part of mergers and acquisitions); Any role that internal or external audit or assurance processes play in informing assessments of changes in the type or level of risks involved; Any key performance indicators or metrics that help the company identify changes in the nature of its salient human rights issues. The robustness of the reporting company’s response to this question will be improved to the extent that it is able to answer the supporting questions that follow. The UN Guiding Principles × UN Guiding Principle 18 provides that: “In order to gauge human rights risks, business enterprises should identify and assess any actual or potential adverse human rights impacts with which they may be involved either through their own activities or as a result of their business relationships. This process should: (a) Draw on internal and/or independent external human rights expertise; (b) Involve meaningful consultation with potentially affected groups and other relevant stakeholders, as appropriate to the size of the business enterprise and the nature and context of the operation.” UN Guiding Principle 17 provides that: “…Human rights due diligence:[…] (c) Should be ongoing, recognizing that the human rights risks may change over time as the business enterprise’s operations and operating context evolve.” The commentary to UN Guiding Principle 18 states that: “Because human rights situations are dynamic, assessments of human rights impacts should be undertaken at regular intervals: prior to a new activity or relationship; prior to major decisions or changes in the operation (e.g., market entry, product launch, policy change, or wider changes to the business); in response to or anticipation of changes in the operating environment (e.g., rising social tensions); and periodically throughout the life of an activity or relationship.” Reference points in other initiatives × These references are intended to help users identify which provisions from other initiatives would be relevant as part of the answer to this question. They are not a substitute for the guidance above. See the cross-references to other initiatives page for a key to the initiatives referenced. Initiative Reference point CHRB B. Embedding Respect and Human Rights Due Diligence: B.2.1, B.2.2 *D. Performance: Company Human Rights Practices: D.1.3, D.1.4,, D.2.7.b, D.2.8, D.3.5.b, D.3.8.b *Section D of the CHRB refers to sector-specific key human rights risks identified by the CHRB. DJSI For specific salient human rights issues identified: Criterion: Risk & Crisis Management Question: Analysis of Risk Question: Sensitivity Analysis and Stress Testing Criterion: Supply Chain Management Question: Supply Chain Management: Risk Exposure FTSE ESG For specific salient human rights issues identified: Labour Standards: Strategy & Practice – Risk assessment and due diligence Human Rights & Community Indicators: Strategy & Practice – Impact assessment on new and existing operations Social Supply Chain: Strategy & Practice – Risk assessment on new and existing suppliers Health & Safety: Strategy & Practice – Risk assessment and due diligence Risk Management: Strategy & Practice – Scenario planning and stress testing – Reviews of Code compliance against Code of Conduct GNI Where freedom of expression and/or privacy are salient human rights issues: Implementation Guidelines: 2. Responsible Company Decision Making – Human Rights Impact Assessments; 4. Privacy – Data Collection GRI Where salient human rights issues include human rights in the supply chain: G4-DMAb (screening new suppliers) G4-DMAb (assessing and auditing suppliers) GR-HR11 (a, b) GR-SO1 ICMM For specific salient human rights issues identified: Subject Matter 2: The company’s material SD risks and opportunities based on its own review of the business and the views and expectations of its stakeholders. ICMM Requirement: The company’s description of its process for identifying material issues (as reported). For specific salient human rights issues identified: Principle 6: Key Management Actions Required (non-mandatory examples from ICMM’s Assurance Procedure): – Assess the positive and negative, the direct and indirect, and the cumulative environmental impacts of new projects – from exploration through closure. IR Content Element 4G: Outlook Content Element 4C: Business model – outcomes (particularly relates to C3.1 and C3.2) Content Element 4F: Performance – outcomes: (particularly relates to C3.1 and C3.2) KTC Where forced labour and human trafficking are salient human rights issues: 1.5 Stakeholder Engagement 5.0: Worker Voice 6.0: Monitoring OECD Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-3 UNGC For specific salient human rights issues identified: Criterion 4 and specifically: – On-going due diligence process that includes an assessment of actual and potential human rights impacts (BRE 2 + BRE 3 + ARE 2 + ARE 3) Criterion 7 and specifically: – Risk and impact assessments in the area of labour VPSHR Where security and human rights is a salient human rights issue: 3. Company procedure to conduct security and human rights risk assessments. Assurance indicators × Please note: Assurance provided at the higher tiers should include indicators from lower tiers. 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 There is evidence that staff with lead responsibility for human rights risk management: understand the distinction between causing a human rights impact, contributing to a human rights impact, and being linked to a human rights impact through a business relationship review potential impacts to identify in which of these ways the company might be involved TIER TWO ASSURANCE The company has processes, indicators or other means through which it assesses how risks related to its salient human rights issues evolve over time, and which are capable of identifying significant changes in those risks. There is evidence that the company accurately identifies the nature of its involvement in actual and potential human rights impacts. TIER THREE ASSURANCE There is evidence that the company has identified significant changes in the nature of risks related to its salient human rights issues in a timely manner. AND There is no evidence that the company has failed to identify significant changes in the nature of risks related to its salient human rights issues in a timely manner within the period under assessment. Supporting questions C3.1 — During the reporting period, were there any notable trends or patterns in impacts related to a salient issue and, if so, what were they? Objective × To provide the reader with general evidence, from within the reporting period, of how each salient issue is evolving and to demonstrate its ongoing due diligence. Supporting guidance × Question 3.2 focuses on specific impacts that have occurred within the reporting period. In responding to question 3.1, the reporting company can point more broadly to the factors that make the issue salient and how they have developed over the reporting period. This might include, for example, trends in evidence of a certain impact from the company’s supply chain audits, an increase (or decrease) in complaints about a certain kind of impact in relation to the company’s operations in a particular region, patterns in the cases or reports of a certain impact across the company’s industry. The company may have specific quantitative or other indicators that would provide useful data as a means of answering this question. These can be particularly helpful to the reader and also demonstrate the existence of a systematic approach to assessing impacts on the human rights in question. Relevant information × Relevant information for the company’s answer could include: Aggregated information from social or human rights audits or assessments; Aggregated information from a grievance or complaints mechanism; Aggregated information from an internal risk register; Industry, government or expert data relevant to the salient human right issues; Anecdotal evidence of trends or patterns gathered through other means (e.g., media, stakeholder engagement, government or intergovernmental action); Other metrics or key performance indicators that support the company’s conclusions about trends and patterns. The UN Guiding Principles × UN Guiding Principle 17 provides that: “…Human rights due diligence: (a) Should cover adverse human rights impacts that the business enterprise may cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships; (b) Will vary in complexity with the size of the business enterprise, the risk of severe human rights impacts, and the nature and context of its operations; (c) Should be ongoing, recognizing that the human rights risks may change over time as the business enterprise’s operations and operating context evolve.” Reference points in other initiatives × These references are intended to help users identify which provisions from other initiatives would be relevant as part of the answer to this question. They are not a substitute for the guidance above. See the cross-references to other initiatives page for a key to acronyms. Initiative Reference point CHRB *D. Performance: Company Human Rights Practices: D.1.6, D.1.7, D.1.8, D.2.7.a, D.2.7.b, D.2.8, D.2.9.a, D.2.9.b, D.3.5.a, D.3.5.b, D.3.8.a, D.3.8.b, D.3.9.a, D.3.9.b *Section D of the CHRB refers to sector-specific key human rights risks identified by the CHRB. DJSI — FTSE ESG — GNI — GRI — ICMM — IR Content Element 4C: Business model – outcomes (particularly relates to C3.1 and C3.2) Content Element 4F: Performance – outcomes: (particularly relates to C3.1 and C3.2) KTC Where forced labour and human trafficking are salient human rights issues: 2.2 Risk Assessment OECD Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD 1D and 1E, OECD-3C and 3D UNGC — VPSHR — Assurance indicators × Please note: Assurance provided at the higher tiers should include indicators from lower tiers. 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 There is evidence that the company ensures that any significant trends and patterns in impacts that it identifies are shared with the relevant parts of management so as to inform decision-making and improve practices. TIER TWO ASSURANCE The company has processes in place to assess trends and patterns in impacts, which are capable of reliably identifying and analysing relevant information. There is evidence that trends and patterns in impacts identified by the company are based on information that is: relevant from credible sources timely sufficient for the conclusions being drawn TIER THREE ASSURANCE There is evidence that trends and patterns shared with relevant parts of management have been factored into their decision-making. C3.2 — During the reporting period, did any severe impacts occur that were related to a salient issue and, if so, what were they? Objective × To provide specific evidence, from within the reporting period, of how and why each of the human rights issues on which the company is reporting is salient. This can help demonstrate that the company’s processes to identify human rights impacts over time are working in practice. Supporting guidance × In response to this question, the reporting company should go beyond trends and patterns to focus on specific cases. The most important factor in selecting examples should be the severity of the impact. Other factors may include an increased likelihood of the impact recurring (such as in a market where it was not previously seen, or was not previously severe), particular challenges in addressing the impact (for example, due to conflict or the role of third parties) or the high public profile of the impact. Responses to this question may best be provided together with responses to questions C4.3 and C6.5 about how the company has addressed potential and actual impacts respectively. Severe impacts may already be publicly known and discussed, whether they are individual incidents or part of an endemic pattern, such as systemic child labour or forced labour in particular countries where inputs to a company’s products are sourced, or where it operates. There may be concerns on the part of a reporting company about reporting publicly on severe impacts, particularly if they have not fully been addressed. The opportunity of responding openly to questions 3.2, 4.3 and 6.5 lies in the ability to demonstrate that actual and potential impacts are recognized and actions are under way to address them, while also acknowledging that it takes time to do this and often requires the involvement – sometimes the leading involvement – of third parties as well. In particular, where impacts are publicly known, the greatest risk to a company may lie in the failure to acknowledge them and to explain how they are being addressed. In exceptional circumstances, it may not be possible for a company to disclose certain information that would be necessary to respond accurately to this question. In such cases, the company should indicate the nature of the information it has omitted and explain its reasons for the omission: for example, risk to the human rights of stakeholders, specific and legitimate legal prohibitions or confidentiality constraints, or the unavailability of reliable information. Where the company is prevented from disclosing information in specific or explicit form, it should, wherever possible, provide it in aggregated or anonymized form in order to avoid significant gaps in its disclosure. Relevant information × Relevant information for the company’s answer could include: Examples of severe impacts that are systemic in a certain area of the company’s operations or value chain and relate to a salient issue (e.g., child labour in a certain sourcing country, impacts on indigenous and other communities in relation to natural resource extraction, impacts on access to water due to agricultural activity in water-scarce regions); Examples of non-systemic impacts related to a salient issue that were the most severe within the reporting period; Examples of incidents discussed in the media or in an NGO or expert report that relate to a salient issue; How the company was involved with the impacts, that is, by causing or contributing to them, or because they are linked to its operations, products or services, but without contribution on its part. The UN Guiding Principles × UN Guiding Principle 17 provides that: “…Human rights due diligence: (a) Should cover adverse human rights impacts that the business enterprise may cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships; (b) Will vary in complexity with the size of the business enterprise, the risk of severe human rights impacts, and the nature and context of its operations; (c) Should be ongoing, recognizing that the human rights risks may change over time as the business enterprise’s operations and operating context evolve.” UN Guiding Principle 21 provides that: “In order to account for how they address their human rights impacts, business enterprises should be prepared to communicate this externally, particularly when concerns are raised by or on behalf of affected stakeholders. Business enterprises whose operations or operating contexts pose risks of severe human rights impacts should report formally on how they address them. In all instances, communications should: … (b) Provide information that is sufficient to evaluate the adequacy of an enterprise’s response to the particular human rights impact involved…” Reference points in other initiatives × These references are intended to help users identify which provisions from other initiatives would be relevant as part of the answer to this question. They are not a substitute for the guidance above. See the cross-references to other initiatives page for a key to acronyms. Initiative Reference point CHRB E. Performance: Responses to Serious Allegations: E.1.1 DJSI — FTSE ESG — GNI — GRI For specific salient human rights issues identified: G4-HR3 (a) (discrimination) G4-HR4 (b) (freedom of association/collective bargaining) G4-HR5 (a, b) (child labor) G4-HR6 (a) (forced labor) G4-HR8a (rights of indigenous peoples) ICMM — IR Content Element 4C: Business model – outcomes (particularly relates to C3.1 and C3.2) Content Element 4F: Performance – outcomes: (particularly relates to C3.1 and C3.2) KTC Where forced labour and human trafficking are salient human rights issues: 7.2 Remedy Programs (element 2: examples of outcomes of remedy process) OECD Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-3C and 3D UNGC For specific salient human rights issues identified: Criterion 5 and specifically: – Outcomes of integration of the human rights principles: Disclosure of main incidents involving the company VPSHR — Assurance indicators × Please note: Assurance provided at the higher tiers should include indicators from lower tiers. 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. Note The practitioner should seek to identify any severe impacts that have occurred during the period under assessment, which are known to the company or its key stakeholders or are otherwise in the public domain, and should assess how they are being addressed in line with indicators under sections C4, C5 and C6 below. Cross reference B4 also addresses actual impacts, with a focus on any severe impacts that occurred outside of the company’s salient human rights issues. This section looks at impacts associated with one or more of the company’s salient human rights issues. TIER ONE ASSURANCE no additional indicators TIER TWO ASSURANCE [Relevant for the assurance of human rights reporting] If the company reports on how it has determined whether an impact is sufficiently severe to require disclosure, there is evidence that: it has focused on the three factors of: how grave the impact is (scale) how widespread it is (scope) how hard it is to put right the resulting harm (remediability) it has focused primarily on the severity of the risk to people’s human rights rather than just the risk to the business If the company reports on the nature of its involvement with the severe impacts concerned, there is evidence that: the company has accurately understood the distinctions between whether it has caused an impact, contributed to an impact, or is simply linked to the impact through its operations, products or services, but without any contribution on its part the company has accurately understood the nature of its responsibility in relation to the impact, based on whether it caused, contributed or is linked to the impact Any severe human rights impacts with which the company has been involved in relation to any of the salient human rights issues – and which are known or reasonably capable of being known by the company – have been clearly disclosed, or, if not disclosed, the company has provided a credible explanation for their omission. TIER THREE ASSURANCE no additional indicators
