Ron Popper has more than a decade of hands-on experience leading human rights efforts at the corporate level. He was Head of Corporate Responsibility at ABB Group, focusing on due diligence, capacity building and engagement with community partners, including communities, suppliers and investors, in various parts of the world until his retirement in 2016.
Among other current human rights positions, he co-chairs the Steering Group of the Global Business Initiative for Human Rights (GBI) and lectures on corporate responsibility.
Ron Popper is a former writing and radio journalist working for 25 years in the UK, Middle East and Switzerland.
He will participate in the forum "Business Talks about Human Rights", organized by the Bulgarian Foundation for Business and Human Rights, to which ESGnews.bg is a media partner. The event will take place on June 26, 2024 from 9.30:13.30 a.m. to XNUMX:XNUMX p.m. in The Steps, Sofia, and participation is free after prior registration. registration.
See what Ron Popper had to say before ESGnews.bg before your arrival in Bulgaria:
Mr. Popper, how does the Global Business Initiative for Human Rights (GBI) support companies to integrate human rights into their operations?
We have been working with some of the world's largest multinational companies since 2009 to support their efforts to strengthen their human rights performance. We are a cross-sector, global initiative that brings together senior executives from companies who, in a confidential setting, can exchange practical examples of which due diligence initiatives, tools, training and practices work and which don't, and share the everyday challenges companies face in implementing respect for human rights in their business activities. GBI has built up a wealth of practical knowledge over the past 15 years and both supports and challenges its members in improving performance. Ultimately, of course, the decision of what to do is left up to them.
What are the biggest human rights challenges for business? How can he be helped to cope with them?
There are many challenges. The first is to dispel misconceptions about human rights. It's quite simple really - it's about how we treat people in our business activities. Do we treat them with dignity and respect? This is about not harming the position of the business itself. The main challenge for businesses is to know how their activities affect people's lives and rights. This can only be done by having the right policies and processes in place, managed by senior management, and also by investing in and performing due diligence to understand potential or actual negative impacts, how to prevent, mitigate or, where necessary, correct them these damages.
One of the biggest challenges is getting companies to do this consistently and effectively throughout their operations and value chain. Companies need to understand that human rights are everywhere in business – not just in their extended supply chain, but also in their own operations. Rights issues may be very close to you. What is produced and how? What are the working conditions? Is there excessive overtime? Is there discrimination (gender, race, religion, etc.) in our own workforce? Are we aware of the potential modern slavery in our midst? Can users not use the products as intended? Who owns the land purchased or leased for production? Under what conditions are the goods transported and stored? However, companies cannot handle it all at once. There is a lot of good, easy advice on breaking down and prioritizing the most pressing human rights risks as a first step.
A comprehensive understanding of risks and ways to mitigate them requires understanding and input from many parts of the company: business managers, human resources, and also legal departments, among others. Senior management buy-in is essential to drive the agenda across the business. There must be an understanding that failure to respect human rights can have legal, financial and human consequences that will not only harm people, but also a company's social license to operate and its ability to continue in business.
How do you support your members to build capacity to respect human rights throughout the company's operations?
At GBI, we deal with a variety of practical issues – some of them everyday and some of them extremely complex. Based on our own business experience and through regular conversations with member companies, we identify the key issues that keep them up at night. These may include relatively common challenges such as how to ensure that workers' rights are respected in operations, due diligence in the supply chain, what constitutes an effective grievance mechanism, how to remove internal company barriers blocking human rights work, how to organize human rights training in the company and for whom it is intended. Then we work on extremely complex issues. These include, for example, how to navigate different national and international legislation and standards, what effective due diligence looks like – both upstream and downstream, how to work in complex or conflict-affected environments, and how to step away from authoritarian or conflict-ridden situations in a manner consistent with human rights. Hard problems.
Why is compliance with human rights important for business?
There are many benefits if your company is known for respecting human rights: customers are more likely to want to partner with a company with a strong reputation as a decent, trustworthy company that respects people and the law. Investors increasingly consider human rights performance (S's core ESG component) along with environmental and governance performance and are more likely to support strong ESG performers. On the other hand, exploiting people to cut costs will lead to ill health (both physical and mental), overwork, health and safety risks, errors, absenteeism and the potential inability to fulfill business contracts or achieve the required standard. This affects business continuity and sustainability. Violation of human rights can have legal consequences, loss of trust among investors and business partners, and negative consequences for the media. It can also hinder your ability to attract and retain the brightest and best talent.
I have visited many factories in different parts of the world. Some are first class, others are in very poor condition: cramped conditions, scared workforce, overworked employees, poorly maintained machinery, little or no personal protective equipment, bad air, chemical spills on the ground, blocked fire exits, etc. You just feel that such a company cannot last long. Their prices may be low, but many international companies, now facing increasing scrutiny, are beginning to change their criteria of who to contact and who to buy from.
How important is meaningful stakeholder engagement to corporate human rights responsibility?
How can a company know what its employees, suppliers and the people affected by its operations want and need if it doesn't talk to them and listen to them? This is an essential element of risk management. An infrastructure project should benefit both the local people and the companies involved. But over the years, visiting projects in many countries, I have seen how the lack of effective stakeholder engagement in infrastructure projects has alienated local communities, including vulnerable people and indigenous peoples, and led to the loss of natural habitats and key resources such as land and water. This sometimes leads to violent resistance and delay of the project itself. All because proactive identification and communication with key stakeholders was not done early or seriously.
The need for stakeholder engagement is increasingly incorporated into legislation and reporting requirements. Stakeholders are central to assessing the dual nature of the EU's Corporate Sustainability Reporting Directive (CSRD), introduced this year. Great emphasis is placed on stakeholder engagement. A key point in the new Corporate Sustainability Due Diligence Directive (CSDDD) is that as part of their due diligence, companies must undertake significant engagement, including dialogue and consultation with affected stakeholders. Serious stakeholder engagement was never meant to be “nice”. And it's no longer optional.
What role does due diligence play in ensuring that corporations respect human rights?
Due diligence is essential to understanding your impacts – positive and negative – and the risks to people and the environment. Many companies are already doing due diligence – legal, financial, for new ventures and acquisitions, land acquisition, etc. It's not new or that hard - it just needs to be done in a consistent way. Due diligence is central to efforts to prevent, mitigate or redress human rights harms, which is why it is a central element of new laws in the European Union and not only that, but also internationally recognized UN and OECD standards.
How can businesses be more transparent and accountable for their human rights abuses, and why is corporate accountability so important in this context?
Companies should put in place internal processes appropriate to their size and potential impacts where they can anticipate and know what their impacts are and feel confident in reporting them. Corporate accountability is the club that is increasingly being waved to ensure that the laggards – and there are still many in different parts of the world – realize that there are consequences for disregarding human rights and mistreatment of the environment.
Laws and international standards place a strong emphasis on companies correcting any mistakes; we increasingly see companies being held accountable in court for wrongs that they cause, contribute to, or are directly related to. Companies make mistakes, they make mistakes. The important thing is to correct them where possible, but also to learn from them. More and more companies are being held accountable not only in the courts, but also by key stakeholders such as ESG investors, affected communities, trade unions, civil society, employees and mainstream and social media. In a 24/7 media world, companies have nowhere to hide when they make mistakes, fail to correct them or learn from them.
What is the relationship between corporate responsibility for human rights and sustainable development and how can business actively participate in achieving the UN Sustainable Development Goals (SDGs)?
A study of the Sustainable Development Goals showed that human rights issues are at the heart of over 90% of the 17 SDGs. In other words, if companies focus on advancing their own human rights performance, they will in any case make a valuable contribution to the realization of the SDGs. Businesses can also determine where they can focus, based on their resources, skills and experience, to support and advance individual goals. It may be best to focus on just one or two areas where an effective contribution can be made. All genuine contributions are valid and welcome. Where I have a problem is when companies try to present their usual activities as a major contribution – it's the SDG equivalent of greenwashing.
What will be the impact of CSDDD on business in Europe? Is there an overlap between CSDDD and CRSD?
Both new laws will take considerable time to get through, but suffice it to say that both pieces of legislation will have a major impact on large EU companies and smaller companies involved in supply chains in terms of the need to strengthening human rights and environmental due diligence and efficiency.
CSRD is already in effect this year for large companies and I've heard that many already have cross-functional and business teams of up to 60-70 people working to consolidate information when reporting becomes mandatory from January next year. The somewhat diluted CSDDD, which passed its last hurdle in May, should now be transposed in the national legislation of the EU countries and will be introduced gradually from 2027 onwards.
Companies already reporting under the CSRD will not need to duplicate these reporting requirements under CSDDD, but will need to describe in detail how they apply due diligence under the CSDDD. If a company submits a climate transition plan under the CSRD, it will not need to duplicate it for the CSDDD.
Where CSRD requirements stand out, a dual assessment of the nature of the company's activities (impact and financial nature) needs to be covered, and due diligence should cover both upstream and downstream activities.
In summary, these new laws – and others such as the EU's Forced Labor Regulation – will force companies, large and small, to approach human rights and environmental due diligence in a much more targeted and detailed way. They should have done so in any case under the UN Guiding Principles on Business and Human Rights (2011) and the OECD Guidelines for Multinational Companies on Responsible Business Conduct. But now such standards are becoming hard law.
It might be tempting to think that smaller companies won't be covered. That would be a mistake. Even if smaller companies are only part of the supply chain, their human rights and environmental data will be needed by their larger customers to report fully and accurately. Failure to provide such information may result in delisting of smaller companies. So even if the CSDDD has its limitations, we are now living through a period of great change – and the hope is that not only will companies' human rights and environmental performance improve, but the rights of many employees, migrant workers, vulnerable groups will be respected and affected communities in Europe and beyond.
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