The Business Commission to Tackle Inequality (BCTI) has released three briefs for corporate executives across industries on human rights, just transition and living wages. For each topic, the briefs delve into what it means for companies, why it is important to put it on the boardroom agenda, and how companies can embed it into their organisation.
Human Level’s Take:
- Human rights, just transition and living wages are no longer optional - they are essential priorities in the boardroom. Addressing these issues is not about meeting ethical responsibilities, but about managing legal, reputational and financial risks, while unlocking market opportunities and staying ahead of competitors
- To ensure these topics are prioritised and acted upon, board-level commitment is a critical first step. When these priorities are embedded into governance structures, they gain the visibility, accountability and resourcing needed to drive meaningful change across the business
- In relation to human rights, companies have a unique role to play in ensuring respect for rights across their operations and value chains. This begins with a clear policy commitment at board level, alongside formalising human rights as a standing agenda item with appropriate oversight and governance mechanisms across both the board and executive leadership
- For a just transition, businesses can take concrete action by empowering a dedicated leader- supported by the executive team - to drive a company-wide approach. This includes connecting existing expert teams, aligning their work with just transition goals and ensuring the topic is integrated across business functions
- On living wages, a step-wise approach is often most effective. Companies can begin by focusing on their own operations - establishing internal policies, aligning relevant departments, identifying wage gaps, and developing a detailed, time-bound implementation plan with top-level sign-off. Once internal progress is underway, efforts can extend to the supply chain by equipping suppliers with tools such as wage assessment frameworks and expert guidance, while embedding living wage criteria into procurement and due diligence processes
- By establishing board-level commitments on these topics and embedding them into governance structures, companies can ensure all relevant functions understand their roles and responsibilities and drive meaningful impact
Some key takeaways:
- Why put human rights on the board agenda? The human rights brief makes the case for putting human rights on the board agenda. The advantages for companies are: 1) averting harm and associated liabilities across their value chain; 2) anticipating and avoiding legal, reputational and financial risks; 3) becoming the preferred brand ahead of competitors; 4) securing business continuity in an evolving regulatory environment; and 5) meeting growing investor and lender expectations. The brief also outlines how companies can embed human rights in their organisations and value chain. One recommended action is setting a clear governance structure for human rights. This can include 1) instituting an unequivocal board-level policy commitment to respecting human rights across the organisation and value chain, aligned with international standards; 2) formalising human rights as a board agenda with oversight and governance mechanisms at both the board and executive levels; 3) reviewing red flags, which includes risks embedded in the business model that the company cannot address at an operation level; and 4) ensuring regular access to and reviewing stakeholder needs and perspectives. Another recommended action is operationalising and monitoring progress. This can include: 1) equipping key business functions with the mandate and resources to implement human rights due diligence; 2) aligning staff performance objectives and incentives with effective human rights practices; 3) monitoring and driving human rights progress by, for example, addressing key risks through clear action plans; and 4) fostering an organisational culture responsive to feedback from affected stakeholders. The brief also delves into how the human rights agenda can be influenced at a system level. This typically involves collaborating with governments, industry and trade associations, business partners, investors, and standard-setters to advance the human rights agenda.
- Why make just transition a strategic board agenda? The just transition brief makes the case for putting just transition on the board agenda. The advantages for companies are: 1) realising and protecting the full value of their transition investments by taking a strategic, people-centred approach; 2) anticipating people-related risks and avoiding harmful blind spots; 3) accounting for their impact before someone holds them accountable; 4) seizing market opportunities; and 5) becoming the preferred choice ahead of competitors. The brief also outlines how companies can implement a just transition in their organisations. One recommended action is connecting people and processes, which includes: 1) setting a clear commitment at board level to drive a people-centred transition strategy and programmes; 2) empowering a just transition leader at the corporate level (with sponsorship from the executive team) to drive an integrated, company-wide approach; 3) leveraging existing (expert) teams and creating the connection between their work and the just transition; and 4) maximising external partnerships to address resource gaps. Another recommended action is taking a strategic and programmatic approach. This can include: 1) leveraging leading frameworks as a head start, such as the Council for Inclusive Capitalism’s Just Transition Framework for Company Action, and Environmental Resources Management’s Just Transition Framework for Corporate Climate Action; 2) mapping out the people-related impacts, risks, and opportunities linked to transition plans; 3) understanding the people-related costs and choosing the best funding strategies; and 4) being vocal about the just transition plan and sharing progress with key stakeholders. The brief also delves into how a just transition can be influenced at a system level. This includes joining local and sector initiatives that the company can influence and benefit from, becoming an ambassador for people-centred transition strategies, and promoting and adhering to globally leading standards, including the UN Guiding Principles on Business and Human Rights.
- Why put living wages on the corporate agenda? The living wages brief makes the case for putting living wages on the board agenda. The advantages for companies are: 1) strengthening long-term supply chain stability; 2) attracting and retaining top talent; 3) enhancing brand reputation and value; and 4) mitigating financial and regulatory risks by staying ahead with evolving legislation. The brief also outlines how companies can implement a living wage in their organisations. One recommended action is starting with their own organisation. This includes 1) establishing a clear understanding of living wages by, for instance, adopting it in internal policies and aligning all relevant functions; 2) identifying wage gaps; 3) developing a data-driven business case to calculate the costs and benefits of paying a living wage; 4) developing a detailed, time-bound financing and implementation plan with top management sign-off; and 5) regularly monitoring, measuring and reporting on your progress to ensure transparency and accountability. When companies have looked at their own organisations, they can then extend their living wage initiatives to their supply chain. This includes: 1) developing an action plan linked to living wage targets; 2) equipping suppliers with the necessary tools, like wage assessment, financial planning resources and expert consultation to address living wage gaps; 3) integrating living wage specifications into the procurement due diligence process and monitoring compliance through regular audits; 4) developing a detailed, time-bound plan for implementation together with strategic suppliers; and 5) regularly monitoring, measuring and reporting on progress in the supply chain and ensuring an auditing process is in place. The brief also delves into how companies can drive progress on living wages at a system level. This includes: 1) calling on governments to establish minimum wages and aligning them with living wage standards; 2) supporting the business case for living wages and promoting it with private sector peers and employer groups; and 3) encouraging the financial community to include living wages as a key criterion in investment decisions and stewardship.
