What companies can do to work with suppliers from emerging markets and developing economies

FiftyEight, Partner Africa and River Inc published Emerging Market Perspectives on Business and Human Rights Measures and Economic Development (March 2025). The report draws on perspectives from stakeholders in Emerging Markets and Developing Economies (EMDEs) on how business and human rights (BHR) measures (which includes regulations, frameworks, standards, certifications and auditing) are experienced, the positive impacts and challenges of these requirements, and the unintended consequences of implementation. The report ends with recommendations for EMDE stakeholders (including companies, investors, governments and donors) about how business and human rights measures can be implemented in ways that consider the local cultural context, and which can more effectively achieve business and human rights outcomes.

Human Level’s Take:

• The impact of Business and Human Rights (BHR) measures in Emerging Markets and Developing Economies (EMDEs) is a mixed bag.
• While some stakeholders—including companies, investors, governments, and donors - report positive outcomes, the experience varies significantly by region. In Kenya and Ghana, 100% of surveyed participants noted a positive impact, whereas only 30% of participants in the Democratic Republic of the Congo (DRC) shared the same sentiment.
• On the positive side, business and human rights measures have opened doors to new markets, buyers, and investors, while also improving worker safety, well-being, and productivity. They have strengthened industry relationships, creating more direct connections between producers and buyers, and increased the measurement of impacts, particularly by international buyers. Additionally, industry, government, and donor-funded programs have helped build knowledge and capacity, further supporting compliance efforts.
• At the same time, there are also clear challenges and unintended consequences of business and human rights measures that fail to take into account the local cultural and economic context of EDMEs.
• 100% of participants surveyed reported challenges in implementing BHR measures. From a misalignment between these measures and local cultural and value chain realities, to many companies and smallholders in EDMEs struggling with a lack of preparedness and resources to meet compliance requirements - the challenges are very real for EDME stakeholders.
• 97% of participants surveyed reported unintended consequences arising from BHR measures. Job losses resulting from non-compliance, a focus on compliance over meaningful outcomes for people, and fears of disengagement by developed economy buyers are some examples.
• Companies can take several actionable steps to enhance business and human rights practices, particularly in emerging markets and developing economies. They can engage EMDE stakeholders in designing and implementing BHR measures and foster dialogue over disengagement by prioritizing collaboration on compliance, contracts, and pricing. They can address power imbalances, which involves recognizing equal supplier-buyer partnerships, ensuring fair pricing, sharing compliance costs, and establishing transparent disengagement policies. They can provide financial and technical support, especially to small and medium-sized enterprises (SMEs), through commitments like continued sourcing guarantees. They can reward positive outcomes by offering incentives such as preferential market access, long-term contracts, and fair pricing structures.
• In a nutshell, buyer companies from developed economies can work much more closely with companies from emerging markets and developing economies to ensure that business and human rights measures work in practice.

Some key takeaways:

• The positive impacts of business and human rights measures: 41% of participants in EMDEs (including from companies, investors, government officials and civil society) reported not being aware of any BHR regulation, whereas 100% of participants mentioned at least one standard or certification. This demonstrates that awareness of BHR certifications and standards is greater than of BHR regulation, although this varies across regions and sectors. 100% of participants in Kenya and Ghana reported a positive impact from implementing BHR measures, while only 30% of participants in DRC reported the same. Some positive impacts reported include increased access to new markets, buyers and investors; improved worker safety, well-being and productivity; enhanced relationships and industry involvement, including more direct relationships between producers and buyers; increased measurement of BHR impacts, particularly on behalf of international buyers; and increased knowledge and capacity from industry and government support, as well as support from buyers, donor funded programmes and other NGO activities.

• The challenges and unintended consequences of business and human rights measures: 100% of participants reported challenges in implementing BHR measures, and 97% reported unintended consequences arising from these measures. Challenges reported include a misalignment between BHR measures and local cultural and value chain realities, particularly in regions with high informality or where children are involved in work from a young age. Many companies, especially smallholders, struggle with a lack of preparedness and resources to meet compliance requirements. The cost of compliance often competes with more immediate business priorities, such as production and market access. Furthermore, BHR measures and data requirements are typically designed from a developed economy perspective, creating a disconnect with the realities of data availability and consistency in many local contexts. Misalignment between local laws, BHR standards, and highly regulated environments further complicates compliance efforts. Unintended consequences include job losses when companies fail to resolve compliance challenges, a focus on meeting compliance requirements rather than achieving meaningful outcomes, and fears of disengagement by developed economy buyers when compliance proves difficult. Additionally, supply chain resilience can be weakened if compliance costs and productivity disruptions from implementing BHR measures render EMDE products less competitive in global markets. In some cases, EMDE companies become dependent on donor support to maintain compliance, diminishing their decision-making power and autonomy.

• What can companies do? The report provides sixteen recommendations categorised into five groups for a range of stakeholders including companies, investors, governments, and donors: (1) BHR regulations; (2) contracting and pricing; (3) traceability; (4) capacity sharing; and (5) collaboration. In relation to companies, the report recommends the following measures:

• Involve stakeholders from EMDEs in the design and implementation of BHR measures;

• Incorporate local cultural contexts and value chain complexities into EMDE national legislation and guidance, with a particular focus on groups at heightened risk of vulnerability and marginalisation. For companies, this could mean supporting local businesses with capacity building and logistical support to understand the implications of regulatory and other requirements;

• Prioritise EMDE company and buyer dialogue and engagement over disengagement on issues of compliance, contracting and pricing. For companies, this means viewing disengagement as a last resort and, instead, focusing on proactive engagement with suppliers to address human rights issues. This engagement may include financial and technical support, training, and capacity building to support suppliers in meeting BHR measures;

• Address power imbalances in supply chains by explicitly recognising a principle of equal supplier-buyer partnerships in BHR arrangements. For companies, this means adopting responsible purchasing practices, including fair pricing, shared responsibility for compliance costs, and transparent communication about disengagement policies. This requires a bottom-up approach that places commodity-origin communities at the heart of industries they enable;

• Support the development of direct relationships between buyers and suppliers in emerging markets to enhance transparency and reduce reliance on intermediaries. This entails international buyers building direct relationships with suppliers; supporting investment aimed at capacity building; facilitating direct contracts; promoting responsible sourcing practices; and reducing reliance on auctions or middlemen that obscure supply chain visibility. In addition, international buyers need to be prepared to pay higher and more stable prices for products to cover the costs of complying with BHR regulations;

• Assess supply chain risk in the context of collaborative sector, commodity or geography-focused initiatives to share learning and speed up progress towards outcomes;

• Develop innovative ways to ease the burden of proof for businesses adhering to BHR measures, linked to processes that enhance productivity. For companies, this means ensuring measurement, monitoring, and traceability efforts are designed by local stakeholders and are achievable in their context. It also means considering options for a public traceability database for businesses to use;

• Reward companies for achieving positive outcomes, potentially through preferential market access, longer-term contracts, or pricing that reflects these outcomes;

• Engage with ESG data providers and benchmarks to better incorporate BHR outcomes alongside environmental considerations;

• Promote initiatives that remove structural barriers to workers and communities’ participation in global markets. For companies, this could mean providing training on BHR standards, supporting the development of cooperatives or other collective bargaining mechanisms, and facilitating access to finance and technology;

• Support locally sustainable, disruptive innovations that enable positive BHR outcomes in global value chains. For instance, this could include private market solutions and investing in building the capacity of local business service providers to offer support for BHR compliance;

• Provide direct financial and technical support to companies, particularly SMEs, through, for instance, guarantees of continued sourcing. Additionally, buyers need to consider providing financial assistance directly to suppliers rather than solely relying on programmes managed by third parties; and

• Encourage investments by both developed economy and EMDE investors that prioritise BHR and draw on consultation with investee companies, governments and workers. This could mean exploring actions to benefit the local community that involve governments, civil society, and the corporate sector - with local communities playing a central role. Initiatives that aim to understand and improve the local context and incorporate positive metrics for change need to be prioritised.

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