Why Reporting Matters

Now more than ever, companies, governments, investors, civil society and others are realizing that doing business with respect for people’s fundamental dignity and welfare just makes sense.

It makes business sense because it helps protect and create long-term value. It makes ethical sense — it’s the right thing to do. And increasingly it’s required of companies by regulators and investors as well as civil society, media and consumers — all of whom recognize that societies cannot thrive if business profits are made at the expense of their most vulnerable members.

In addition to doing business with respect for human rights, companies are expected to be transparent and accountable about their efforts — to tell us what they’re doing. That’s where reporting comes in.

The UN Guiding Principles Reporting Framework is the world’s first comprehensive guidance for companies to report on how they respect human rights. Launched in 2015 by Shift and Mazars, the UNGP Reporting Framework has strong backing from United Nations experts, governments, stock exchanges, investors, civil society organizations and more — and is being used by dozens of leading global companies. The author of the Guiding Principles, Professor John Ruggie, calls the Reporting Framework an “indispensable tool”. | Learn more about who is using and supporting the Reporting Framework

Regulations from the UK’s Modern Slavery Act to the French ‘plan de vigilance’ law to the California Transparency in Supply Chains Act and the EU non-financial reporting Directive are all calling for the same kind of disclosure on human rights: disclosure that aligns with the UN Guiding Principles and its expectations for human rights due diligence.

The UNGP Reporting Framework provides a vehicle through which to address these growing demands for transparency. It helps companies provide a single, coherent narrative on their progress in implementing respect for human rights that gets them ahead of these growing regulatory requirements.

Why should companies’ reporting on human rights matter to you?

Companies | Governments | Investors | Civil Society

For companies

The case for companies to do business with respect for human rights has been made numerous times, numerous ways. We recommend this guide for a good overview of the case for companies to respect human rights.

And what about reporting? Why should companies report on human rights, using the UNGP Reporting Framework?

  • The UNGP Reporting Framework is the world’s only reporting framework for companies on human rights that is wholly aligned with the authoritative global standard of the UN Guiding Principles on Business and Human Rights (UNGPs). Companies that report in line with the UNGP Reporting Framework know they are focusing their disclosure on the most relevant and meaningful information that meets global expectations.
  • Because the Reporting Framework is aligned to the global standard of the UNGPs, it asks for information that companies are required to disclose under the growing number of regulations, indices and questionnaires that address this issue.
  • The UNGP Reporting Framework is a set of straightforward, smart questions that track, step by step, to the expectations of the UN Guiding Principles. Companies can begin by answering just eight common sense questions, and build from there. This approach gives companies the flexibility they need while still being aligned to the global standard.
  • By asking smart questions, the Reporting Framework also helps companies ‘do the doing’ of respecting human rights. These are questions to which any company needs answers in order to be sure it understands and manages human rights risks effectively. Companies using the Reporting Framework have consistently said these questions foster better conversations with colleagues, senior leadership, business partners and other stakeholders that lead to increased support and action on human rights.
  • The Reporting Framework’s principled focus on salient human rights issues helps companies prioritize and focus their resources on where it matters most.

“The Reporting Framework is a good tool for implementing the UNGPs – it gives more concrete questions for the actual task of implementation, let alone the reporting. Don’t leave it just as a communication exercise.” — Company user of the Reporting Framework

For governments

 

“States should encourage and give incentives to improved human rights reporting and consider where mandatory reporting could help to advance corporate practices. The UN Guiding Principles Reporting Framework offers an opportunity for convergence around a tool that is based directly on the Guiding Principles.” — UN Working Group on business and human rights

As part of the state’s own duty to protect human rights, governments need insight into what companies are doing to implement the UN Guiding Principles – efficient and effective ways of knowing if companies are doing business with respect for human rights. These insights can be readily provided when companies report using the UNGP Reporting Framework. Increasingly, as more states mandate company reporting about how they manage social and environmental impacts, governments are recommending companies use the UNGP Reporting Framework to help them both comply with reporting requirements, and to more effectively prevent and address their impacts.

For investors

The global movement of investors focused on long-term value creation is growing. That means investors are increasingly asking for information from companies about how they manage their environmental, social and governance risks. Nothing is more central to companies’ social performance than their management of risks to people’s human rights: their basic dignity as human beings. Risks to human rights may also result environmental impacts or poor governance as well as social dynamics.

The UNGP Reporting Framework is backed by a coalition of 87 investors representing $5.3 trillion assets under management. As members of that coalition state, the Reporting Framework is “an essential tool that enables investors to review companies’ understanding and management of human rights risks.” The investors’ statement continues: “Beyond ethical concerns, companies that do not proactively assess and manage human rights risks face potential legal, reputational, and other risks with financial implications. Meaningful disclosure of human rights performance can play a significant role in reducing a company’s human rights risks, contributing to a company’s competitive advantage, and strengthening its long-term financial stability.”

Increasingly, investors are also making use of the UNGP Reporting Database and our analysis of companies’ existing reporting on human rights. These resources help inform investors’ engagements with companies and illustrates differences between leaders and laggards, as well as trends in company reporting on human rights.

For civil society

The UNGP Reporting Framework provides a principled approach for companies to be transparent about how they respect human rights in practice. This means civil society can call on companies to use the Reporting Framework, in order to push for increased company accountability and transparency.

While company reporting is unlikely ever to cover all the issues of concern to all stakeholders, it should provide sufficient insight to the company’s intentions, practices and results to provide a basis for informed dialogue on whatever aspects of the company’s human rights performance are of interest.

Our database and analysis of existing company reporting on human rights also serve to shine a light on the current state of company reporting and performance, which can support civil society’s advocacy efforts.