New assurance framework will enable businesses to identify global risk

16 October 2017 — As the  Corporate Governance Code review is laid out in the UK in November and UK Prime Minister Theresa May calls on the United Nations to back tough measures to end modern slavery, international accountancy and advisory firm Mazars and Shift, the leading centre of expertise on the UN Guiding Principles, have launched the UNGP Assurance Guidance, the follow-on to the UNGP Reporting Framework.

The Assurance Guidance has two primary aims:

1. Helping those tasked with assessing human rights performance in business to better understand the competencies required and what good performance looks like, and
2. supporting external assurance providers as they oversee companies’ human rights reporting.

Developed over several years by Mazars and Shift, the UNGP Assurance Guidance supports the 2015 UN Guiding Principles Reporting Framework, the world’s only reporting framework for companies that is wholly aligned with the authoritative UN Guiding Principles on Business and Human Rights.

An audience of senior business leaders, auditors and human rights experts gathered at the  September launch event which featured a panel including Louise Nicholls, Head of Human Rights, Food Sustainability and Food, Marks & Spencer PLC, Paul Druckman, Chair of the Corporate Reporting Council, UK Financial Reporting Council and Paul Boyle, President of the Chartered Institute of Internal Auditors.

Richard Karmel, the Head of Human Rights at Mazars UK, where the event was hosted, said:

“There has never been a more critical time for firms to communicate fairly and accurately as to how their business activities impact people. As well as Theresa May’s recent message to the UN on the urgent need to address modern slavery in company value chains and the enhanced duties for directors with regard to the impacts of their companies’ activities, we are seeing massive value destruction in businesses being linked to, or contributing to, human rights abuses.

“Business has a responsibility for identifying current and potential impacts on people and it is only then that positive behaviour change can take place.  By understanding where business can be involved with human rights abuses, employers can take the first step in meeting the UK’s and the UN’s calls for reform.”

He continued:

“This new Assurance Guidance includes a set of indicators for what good performance could look like and is fully aligned with the UNGP Reporting Framework.  The tool will help business to firmly place human rights into core business practice.”

The audience heard that a business that understands and reports knowledgeably on its human rights performance is likely to be ahead in its responsibilities on the wider subject of corporate governance.

Paul Druckman explained that November’s Review of the Financial Reporting Council’s Corporate Governance Code will remind directors of their obligations under Section 172 of the UK Companies Act, including to have regard to “the impact of the company’s operations on the community and the environment” in which respect for human rights is integral.

As well as being a business imperative, Louise Nicholls expressed how effective human rights reporting could also serve as a business opportunity. Having produced Marks & Spencer’s first human rights report last year, she said that changing the lens to consider risk to people first gave them an opportunity to identify risks they may not have otherwise considered:

“Every day a company makes decisions that have an impact on people – human rights reporting should be a fundamental part of the wider reporting agenda” she said. “This assurance guidance will help business better understand its impact on people, which can only be positive.” | Learn more about companies that are using the UNGP Reporting Framework

The launch was supported by the Chartered Institute of Internal Auditors, whose President, Paul Boyle, remarked:

“The audit profession, be it internal auditors or external assurance providers, has a responsibility to help senior management better understand the wider risks of undertaking business in this increasingly transparent world – including risks in relation to their human rights obligations.

“Quality, including compliance with obligations, cannot be inspected into a process; it must be designed in. Respect for human rights has to be integrated into wider management processes. Internal auditors or external assurance providers can perform a valuable role for Boards in assessing how well management has done so.”

Chairing the launch discussion, Shift President Caroline Rees concluded:

“In developing the tool, we worked with investors, civil society and assurance providers as well as companies themselves. Corporate respect for human rights is about basic human dignity and our aim is to make this a strategic part of core business.

“A widespread deficit in business respect for human rights is at the heart of the political malaise we see around the world, with populations pushing back against a globalization that has left them exposed to insecure jobs and exploitative practices. The professions need to make sure that their members are properly equipped with the right skills and training to help business address these critical challenges.

“The evidence that business success now depends on more sustainable business practices means that respect for human rights is no longer an optional extra.”

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To learn more about the UNGP Assurance Guidance, please see our press release from its launch, and access the guidance here.