C4

Integrating Findings and Taking Action

Overarching question

To explain if and how the reporting company’s understanding of its salient human rights issues makes a difference to how it conducts business.

The focus of Section C4 is on the prevention and mitigation of potential human rights impacts: a forward-looking focus. This includes the company’s efforts to prevent actual impacts from continuing or recurring. Section C6 focuses on backward-looking actions to address the harm to individuals that results from actual impacts once they have occurred.

Understanding impacts, identifying appropriate responses and putting them into practice takes time, and human rights risks themselves can change over time. It is therefore unlikely that a reporting company will be able respond to this question (or to the supporting questions) by showing that all challenges have been addressed. Rather, the opportunity is to demonstrate the company’s general and specific approaches to addressing impacts, how far it has progressed in its efforts to do so and its aims for continued improvement.

Relevant information for the company’s answer could include:

  • Processes through which the company takes decisions on how best to address each salient issue in practice;
  • Examples of how findings about each salient issue have informed policies and procedures to improve the management of risks related to that issue;
  • Any forward-looking strategies or priorities to address and advance the management of a salient issue;
  • Examples of how findings about each salient issue have informed policies and procedures;
  • The level and function within the company that has overall responsibility for addressing each salient issue (if different from information on general responsibility for human rights provided in response to question A2.1);
  • The level and function within the company that has overall accountability (the most senior and explicit decision-making authority) for addressing each salient issue (if different from information on general accountability for human rights provided in response to question A2.1);
  • Any processes of oversight related to each salient issue that help ensure the implementation of decisions and actions to prevent or mitigate actual impacts;
  • How any conflicts between international human rights standards and national law are handled in relation to any of the salient issues;
  • What resources, including budgets, are allocated to the management of each salient issue.

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.

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.

(b) Appropriate action will vary according to:

i. Whether the business enterprise causes or contributes to an adverse impact, or whether it is involved solely because the impact is directly linked to its operations, products or services by a business relationship;

ii. The extent of its leverage in addressing the adverse impact.”

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 dueweight, and acted upon. In assessing human rights impacts, business enterprises will have looked for both actual and potential adverse impacts. Potential impacts should be prevented or mitigated through the horizontal integration of findings across the business enterprise, while actual impacts – those that have already occurred – should be a subject for remediation (Principle 22).

Where a business enterprise causes or may cause an adverse human rights impact, it should take the necessary steps to cease or prevent the impact. Where a business enterprise contributes or may contribute to an adverse human rights impact, it should take the necessary steps to cease or prevent its contribution and use its leverage to mitigate any remaining impact to the greatest extent possible. Leverage is considered to exist where the enterprise has the ability to effect change in the wrongful practices of an entity that causes a harm.

Where a business enterprise has not contributed to an adverse human rights impact, but that impact is nevertheless directly linked to its operations, products or services by its business relationship with another entity, the situation is more complex. Among the factors that will enter into the determination of the appropriate action in such situations are the enterprise’s leverage over the entity concerned, how crucial the relationship is to the enterprise, the severity of the abuse, and whether terminating the relationship with the entity itself would have adverse human rights consequences.

The more complex the situation and its implications for human rights, the stronger is the case for the enterprise to draw on independent expert advice in deciding how to respond. If the business enterprise has leverage to prevent or mitigate the adverse impact, it should exercise it. And if it lacks leverage there may be ways for the enterprise to increase it. Leverage may be increased by, for example, offering capacity-building or other incentives to the related entity, or collaborating with other actors.

There are situations in which the enterprise lacks the leverage to prevent or mitigate adverse impacts and is unable to increase its leverage. Here, the enterprise should consider ending the relationship, taking into account credible assessments of potential adverse human rights impacts of doing so.

Where the relationship is ‘crucial’ to the enterprise, ending it raises further challenges. A relationship could be deemed as crucial if it provides a product or service that is essential to the enterprise’s business, and for which no reasonable alternative source exists. Here the severity of the adverse human rights impact must also be considered: the more severe the abuse, the more quickly the enterprise will need to see change before it takes a decision on whether it should end the relationship. In any case, for as long as the abuse continues and the enterprise remains in the relationship, it should be able to demonstrate its own ongoing efforts to mitigate the impact and be prepared to accept any consequences – reputational, financial or legal – of the continuing connection.”

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.1.6, B.2.3
*D. Performance: Company Human Rights Practices: D.1.4, D.1.5, D.1.8, D.2.2, D.2.6, D.2.7.a, D.3.2, D.3.8.a

*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: Risk Response Strategy

Criterion: Supply Chain Management
Question: Risk Management Measures Question: ESG Integration in SCM Strategy

FTSE ESG

For specific salient human rights issues identified:
Health & Safety: Strategy & Practice
– Performance monitoring and management
– Incidents investigated, reported and action taken Labour Standards: Strategy & Practice
– Actions to address labour issues and improve diversity
– Incidents of non-compliance and action taken

Social Supply Chain: Strategy & Practice
– Capacity building in suppliers

Social Supply Chain: Quantitative, Sector Specific and Performance
– Results of supplier monitoring/auditing and actions on non-compliance

Customer Responsibility: Strategy & Practice
– Initiatives to protect vulnerable groups

Customer Responsibility: Quantitative, Sector Specific and Performance
– Non-compliance and corrective action on Breast Milk Substitutes marketing

GNI

Where freedom of expression and/or privacy are salient human rights issues:
Implementation Guidelines: 2. Responsible Company Decision Making – Integration into Business Operations; Partners, Suppliers and Distributors; 3. Freedom of Expression; 4. Privacy

GRI

For specific salient human rights issues identified: G4-HR1 (a, b)

ICMM

For specific salient human rights issues identified:
Subject Matter 3: The existence and status of implementation of systems and approaches that a company is using to manage each (or a selection) of the identified material SD risks and opportunities.

For specific salient human rights issues identified:
Principle 6: Key Management Actions Required (non-mandatory examples from ICMM’s Assurance Procedure):
– Implement an environmental management system focused on continual improvement to review, prevent, mitigate or ameliorate adverse environmental impacts.
– Design and plan all operations so that adequate resources are available to meet the closure requirements of all operations.

IR

Content Element 4D: Risks and opportunities – how the organization is dealing with them (relates also to C4.1, C4.2 and C4.3)

KTC

Where forced labour and human trafficking are salient human rights issues:

1.4 Training

3.0 Purchasing Practices

4.0 Recruitment

6.0 Monitoring

7.0 Remedy

OECD

Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue:
OECD-1 and OECD-3

UNGC

For specific salient human rights issues identified: Criterion 1

VPSHR

Where security and human rights is a salient human rights issue:
5. Company procedure to consider the Voluntary Principles in entering into relations with public/private security providers.

11. Voluntary Principles considerations in the selection of private security providers and formulation of contractual agreement with private security providers, as well as arrangement with public security forces.

Supporting questions

To explain the reporting company’s efforts and progress in building a coherent approach to addressing the salient issues, including their root causes, across all relevant parts of the business.

Most human rights issues are relevant for more than one business function, unit or department in a company. It is usually the case that different parts of the company can exacerbate and/or mitigate the risk of impacts on human rights through their actions and decisions. The reporting company can use its response to this question to explain how the responsibilities of people in different parts of the company are understood with regard to each salient human rights issue, and how those people are involved in the company’s efforts to find solutions.

Relevant information for the company’s answer could include:

  • Structures, such as cross-functional committees, through which information is shared and/or decisions are made across the relevant parts of the business regarding each salient issue (e.g., a human rights committee, a supply chain board, a sales compliance board, a community relations committee);
  • Other processes through which information is shared and/or decisions are jointly made across the relevant parts of the business in relation to each salient issue (e.g., issue-specific meetings, internal updates and reporting on evolving issues, reporting to senior management; reporting to the Board);
  • Examples of specific decisions or actions taken that have involved different parts of the business in preventing or mitigating potential impacts related to the salient issue.

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…”

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.

In assessing human rights impacts, business enterprises will have looked for both actual and potential adverse impacts. Potential impacts should be prevented or mitigated through the horizontal integration of findings across the business enterprise…”

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

DJSI

For specific salient human rights issues identified:
Criterion: Risk & Crisis Management
Question: Responsibility Risk & Crisis Management

FTSE ESG

GNI

GRI

ICMM

IR

Content Element 4D: Risks and opportunities – how the organization is dealing with them (relates also to C4.1, C4.2 and C4.3)

KTC

Where forced labour and human trafficking are salient human rights issues:

1.3 Management and Accountability

3.0 Purchasing Practices

OECD

Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-1B

UNGC

For specific salient human rights issues identified:
Criterion 4 and specifically:
– Allocation of responsibilities and accountability for addressing human rights impacts
– Internal decision-making, budget and oversight for effective responses to human rights impacts

Criterion 7 and specifically:
– Allocation of responsibilities and accountability for addressing human rights impacts

VPSHR

To offer insights into principles, policies or processes that guide the reporting company in handling any conflicts between preventing human rights impacts in the most effective way and meeting other business objectives, whether in general terms or through specific cases that have arisen.

This question recognizes that the corporate responsibility to respect human rights may, at times, be in conflict with certain (often near-term) financial, commercial or other business interests. For example:

• Pressures to advance certain operations, purchases or sales quickly may reduce the time available to mitigate potential human rights impacts;

• Opportunities with a new supplier or joint venture partner may be commercially compelling despite that entity’s poor human rights track record;

• Lobbying against new regulations that would raise the minimum wage may help preserve profit margins even though a failure to pass the regulation would keep some workers on poverty-level wages.

Such tensions may arise during the conduct of ongoing business or at the point of making decisions about whether to enter a new market or develop a new product or area of operations.

In some instances, the competing business interests may also raise ethical considerations of their own, and even have human rights implications. For example, reducing sourcing in a jurisdiction where human rights abuses are known to be common may, at the same time, jeopardize the jobs of relatively poor, low-wage employees.

The question is, therefore, not aimed at suggesting that there is only one ‘right’ answer in such dilemma situations, but at seeking information on how the tensions are recognized and how different considerations are weighed in order to reach decisions.

To the extent that individual examples can be provided, this will provide a useful illustration of how the reporting company addresses tensions of this kind. However, if examples reflect an ad hoc decision rather than being the result of a typical process, this should be made clear in order to avoid misleading the reader.

Relevant information for the company’s answer could include:

  • Any situations that are recognized as often raising tensions or dilemmas in relation to a salient issue (e.g., the sale of sensitive products to certain kinds of customer, approvals to proceed with projects affecting local communities, entry into high-risk, high-opportunity markets, the provision of security for personnel in conflict-affected areas);
  • Any principles or policies that set the framework for decisions in such instances;
  • Any specific principles or policies that guide decisions on corporate lobbying in relation to human rights issues;
  • Any formal processes for supporting decisions where these tensions arise (e.g., gateway decision-making processes, formal sign-off processes);
  • The level within the company at which decisions relating to such dilemmas are made (e.g., an individual or group at the country, regional or corporate level, someone in senior management or at Board level);
  • Any involvement of external experts in the assessment of dilemmas on a standing or ad hoc basis (e.g., an independent advisory board or council, academic or other experts);
  • Any specific examples of how tensions have been addressed, during the reporting period, in relation to a salient issue.

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 more complex the situation and its implications for human rights, the stronger is the case for the enterprise to draw on independent expert advice in deciding how to respond.

If the business enterprise has leverage to prevent or mitigate the adverse impact, it should exercise it. And if it lacks leverage there may be ways for the enterprise to increase it. Leverage may be increased by, for example, offering capacity-building or other incentives to the related entity, or collaborating with other actors.

There are situations in which the enterprise lacks the leverage to prevent or mitigate adverse impacts and is unable to increase its leverage. Here, the enterprise should consider ending the relationship, taking into account credible assessments of potential adverse human rights impacts of doing so.

Where the relationship is ‘crucial’ to the enterprise, ending it raises further challenges. A relationship could be deemed as crucial if it provides a product or service that is essential to the enterprise’s business, and for which no reasonable alternative source exists. Here the severity of the adverse human rights impact must also be considered: the more severe the abuse, the more quickly the enterprise will need to see change before it takes a decision on whether it should end the relationship. In any case, for as long as the abuse continues and the enterprise remains in the relationship, it should be able to demonstrate its own ongoing efforts to mitigate the impact and be prepared to accept any consequences – reputational, financial or legal – of the continuing connection.”

UN Guiding Principle 23 provides that:

“In all contexts, business enterprises should: […]

(b) Seek ways to honour the principles of internationally recognized human rights when faced with conflicting requirements…”

The commentary to UN Guiding Principle 23 states that:

“Although particular country and local contexts may affect the human rights risks of an enterprise’s activities and business relationships, all business enterprises have the same responsibility to respect human rights wherever they operate. Where the domestic context renders it impossible to meet this responsibility fully, business enterprises are expected to respect the principles of internationally recognized human rights to the greatest extent possible in the circumstances, and to be able to demonstrate their efforts in this regard.”

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.2.2, D.3.2

*Section D of the CHRB refers to sector-specific key human rights risks identified by the CHRB.

DJSI

FTSE ESG

GNI

Where freedom of expression and/or privacy are salient human rights issues:
Implementation Guidelines: 2. Responsible Company Decision Making – Integration into Business Operations: Procedures; 3. Freedom of Expression – Government Demands, Laws and Regulations; 4. Privacy – Government Demands, Laws and Regulations

GRI

ICMM

IR

Content Element 4D: Risks and opportunities – how the organization is dealing with them (relates also to C4.1, C4.2 and C4.3)

KTC

Where forced labour and human trafficking are salient human rights issues:

3.1 Purchasing Practices

OECD

Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-3B and 3C

UNGC

VPSHR

To demonstrate, through concrete examples, what the reporting company has done during the reporting period to reduce the likelihood of negative impacts related to each salient issue occurring, recurring or continuing, and the results achieved.

The focus of examples in response to this question should be on actions to prevent potential impacts. Section C6 addresses actions by the reporting company to enable remedy for those harmed by actual impacts to which the company has caused or contributed.

The reporting company may nevertheless find it useful to respond to this question in combination with questions 3.1 and 3.2 (regarding trends, patterns or examples of the existence of actual or potential impacts during the reporting period) and 6.5 (regarding what kinds of remedy were provided for actual impacts), particularly where a case offers examples that are relevant to two or more of these questions.

Relevant information for the company’s answer could include:

  • Terms included in contracts with governments, joint venture partners, suppliers, customers, mergers and acquisitions and other agreements, aimed at mitigating potential impacts related to the salient issue;
  • Monitoring of the implementation, by third parties, of agreements that relate to the salient issue;
  • The agreement and implementation of corrective action plans following on from supply chain audits, and resulting changes in practice and compliance;
  • Joint fact-finding or monitoring with affected communities, workers or others;
  • Support to government in introducing or implementing key legislation to protect human rights in relation to a salient issue;
  • Engagement with industry organizations, international organizations or others that can raise awareness collectively of a salient issue and reduce the risk of negative impacts;
  • Capacity-building of workforce to mitigate the risk of negative impacts in relation to a particular salient issue;
  • Capacity-building of suppliers or other business partners to mitigate the risk of negative impacts in relation to a salient issue (e.g., training of security providers or contractors, helping suppliers to develop management systems to improve labour rights compliance);
  • Root cause analysis to understand and be able to address underlying reasons that increase or perpetuate the risk of negative impacts related to a salient issue;
  • Other ways in which the company has exercised its influence (leverage) over business customers, joint venture partners, suppliers or others in its value chain to reduce risks of negative impacts related to a salient issue;
  • Collaborative initiatives with others to better understand and address potential impacts related to a salient issue (e.g., through multi-stakeholder initiatives);
  • External challenges faced in seeking to prevent or mitigate potential impacts related to a salient issue;
  • Any other approaches to addressing systemic risks to human rights in relation to a salient issue.

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.

(b) Appropriate action will vary according to:

(i.) Whether the business enterprise causes or contributes to an adverse impact, or whether it is involved solely because the impact is directly linked to its operations, products or services by a business relationship;

(ii.) The extent of its leverage in addressing the adverse impact.”

The commentary to UN Guiding Principle 19 states that:

“Where a business enterprise causes or may cause an adverse human rights impact, it should take the necessary steps to cease or prevent the impact. Where a business enterprise contributes or may contribute to an adverse human rights impact, it should take the necessary steps to cease or prevent its contribution and use its leverage to mitigate any remaining impact to the greatest extent possible. Leverage is considered to exist where the enterprise has the ability to effect change in the wrongful practices of an entity that causes a harm.

Where a business enterprise has not contributed to an adverse human rights impact, but that impact is nevertheless directly linked to its operations, products or services by its business relationship with another entity, the situation is more complex. Among the factors that will enter into the determination of the appropriate action in such situations are the enterprise’s leverage over the entity concerned, how crucial the relationship is to the enterprise, the severity of the abuse, and whether terminating the relationship with the entity itself would have adverse human rights consequences.

The more complex the situation and its implications for human rights, the stronger is the case for the enterprise to draw on independent expert advice in deciding how to respond. If the business enterprise has leverage to prevent or mitigate the adverse impact, it should exercise it. And if it lacks leverage there may be ways for the enterprise to increase it. Leverage may be increased by, for example, offering capacity-building or other incentives to the related entity, or collaborating with other actors.

There are situations in which the enterprise lacks the leverage to prevent or mitigate adverse impacts and is unable to increase its leverage. Here, the enterprise should consider ending the relationship, taking into account credible assessments of potential adverse human rights impacts of doing so.

Where the relationship is ‘crucial’ to the enterprise, ending it raises further challenges. A relationship could be deemed as crucial if it provides a product or service that is essential to the enterprise’s business, and for which no reasonable alternative source exists. Here the severity of the adverse human rights impact must also be considered: the more severe the abuse, the more quickly the enterprise will need to see change before it takes a decision on whether it should end the relationship. In any case, for as long as the abuse continues and the enterprise remains in the relationship, it should be able to demonstrate its own ongoing efforts to mitigate the impact and be prepared to accept any consequences – reputational, financial or legal – of the continuing connection.”

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

B. Embedding Respect and Human Rights Due Diligence: B.1.6
*D. Performance: Company Human Rights Practices: D.1.2, D.1.5, D.1.6, D.1.7, D.1.8, D.2.1, D.2.4.a, D.2.4.b, D.2.5, D.2.6, D.2.7.a, D.2.7.b,, D.2.8, D.2.9.a, D.2.9.b, D.3.1.b, D.3.4.b, D.3.5.a, D.3.5.b, D.3.6.a, D.3.6.b, D.3.6.c, D.3.6.d, D.3.7.a, D.3.7.b, D.3.8.a, D.3.8.b, D.3.9.a, D.3.9.b, D.3.10.a, D.3.10.b
E. Performance: Responses to Serious Allegations: E1.3

*Section D of the CHRB refers to sector-specific key human rights risks identified by the CHRB.

DJSI

FTSE ESG

GNI

GRI

For specific salient human rights issues identified:
G4-DMAb (Specific Actions)
G4-HR4 (b) (freedom of association/collective bargaining)
G4-HR5 (c) (child labor)
G4-HR6 (forced labor)
G4-HR11 (d, e) (supply chain related risks)

ICMM

For specific salient human rights issues identified:
Principle 5: Key Management Actions Required (non-mandatory examples from ICMM’s Assurance Procedure):
– Implement a management system focused on continual improvement of all aspects of operations that could have a significant impact on the health and safety of our own employees, those of contractors and the communities where we operate.
– Take all practical and reasonable measures to eliminate workplace fatalities, injuries and diseases among our own employees and those of contractors.

Principle 6: Key Management Actions Required (non-mandatory examples from ICMM’s Assurance Procedure):
– Rehabilitate land disturbed or occupied by operations in accordance with appropriate post-mining land uses.
– Provide for safe storage and disposal of residual wastes and process residues.

IR

Content Element 4D: Risks and opportunities – how the organization is dealing with them (relates also to C4.1, C4.2 and C4.3)

KTC

Where forced labour and human trafficking are salient human rights issues:

1.4 Training

3.0 Purchasing Practices

4.0 Recruitment

5.0 Worker Voice

6.0 Monitoring

7.0 Remedy

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 due diligence processes

Criterion 7 and specifically:
– Active engagement with suppliers to address labour-related challenges

Criterion 8 and specifically:
– Process to positively engage with the suppliers to address the challenges (i.e., partnership approach instead of corrective approach) through schemes to improve workplace practices

VPSHR