SHIFT presentation - 9th Multi-stakeholder Forum on Responsible Mineral Supply Chains

an initiative of Shift and Mazars

UN GUIDING PRINCIPLES REPORTING FRAMEWORK

© Shift Project Ltd, 2015. All rights reserved.

Presentation for ICGLR-OECD-UN GoE Joint Forum on Responsible Mineral Supply Chains 4 May 2015, Paris

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PRESENTATION OUTLINE

•  What is the UN Guiding Principles Reporting Framework?

•  Why does it matter? •  How was the Framework developed? •  How is the Reporting Framework relevant

to OECD Due Diligence Guidance? •  Who supports the Reporting Framework?

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THE REPORTING FRAMEWORK

The first comprehensive framework for companies to report on how they respect human rights.

à Based on the authoritative global standard: the

UN Guiding Principles à Enables companies to report on human rights in

a meaningful way that meets stakeholder needs à Fits seamlessly both with broader reporting

frameworks and industry/issue-specific initiatives à Is feasible for small and large companies, those

beginning to focus on human rights and those well advanced

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THE REPORTING FRAMEWORK

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Fulfilling the Global Standard

“The responsibility to respect human rights requires that business

enterprises have in place policies and processes through which they

can both know and show that they respect human rights in practice.”

- United Nations Guiding Principles on Business and

Human Rights

WHY DOES IT MATTER?

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WHY DOES IT MATTER?

Company choice Regulatory requirements

Stock exchange demands

Investor expectations

Stakeholder pressure

ACCOUNTABILITY & TRANSPARENCY

Increasing expectations of corporate human rights reporting

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WHY DOES IT MATTER?

Need for meaningful reporting: •  Human rights reporting has been weakest in

sustainability and corporate responsibility reporting

•  Until this time, no clarity about what “good” looks like

•  Much reporting neither reflects nor supports respect for human rights in the core business

•  Most reporting does not reflect the global authoritative standard of the Guiding Principles

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WHY DOES IT MATTER?

Do companies report on their human rights impacts?

In a February 2015 Economist Intelligence Unit report, only 11 percent of nearly 900 surveyed companies publish an annual public report on issues related to human rights.

Can reporting help companies better prevent and remedy human rights impacts?

The Reporting Framework makes this possible.

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HOW WAS THE FRAMEWORK DEVELOPED?

Multistakeholder consultations over 18-month period: ü Consultations in Addis Ababa, Bangkok, Jakarta,

London, Manila, Medellin, New York and Yangon ü  Involving over 200 companies, investor groups, civil

society organizations, governments, assurance providers, lawyers and other expert organizations

ü  Supported by research on current practice and lessons from related fields

ü  Public reporting throughout process on discussions and how they shaped the Reporting Framework

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Strategic Guidance: •  Overseen by Eminent Persons Group (EPG) led by John

Ruggie •  Supported by the UN Working Group on the issue of

human rights and transnational corporations and other business enterprises

•  Benefited from collaboration with Global Reporting Initiative (MoU, membership in EPG)

•  Liaised closely with Integrated Reporting to promote added value (membership in EPG)


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Objectives: ü Provide guidance to companies about how

best to disclose information about their human rights policies, processes and performance.

ü Ensure the Reporting Framework is feasible for companies to apply.

ü Help companies to improve management systems.


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DETAILS OF THE REPORTING FRAMEWORK

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an initiative of Shift and Mazars 13





FOCUS ON SALIENT HUMAN RIGHTS ISSUES

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Distinct from, yet compatible with, materiality: •  Not relative to any one audience, but to human rights •  A principled basis for identification, aligned with

human rights due diligence, supported by local stakeholder input, verifiable with expert stakeholders

•  Based on risk to people, but reflecting that most severe impacts on people converge strongly with risk to business

The human rights at risk of the most severe negative

impacts through the company’s operations and

value chain.

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RISK TO PEOPLE, RISK TO BUSINESS

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MEANINGFUL QUESTIONS

•  Open enough that any company can respond

•  Targeted enough to focus the response on meaningful information

•  Avoids cross-industry indicators •  Recognizes industry-level indicators •  Encourages use of company-level

indicators to support narrative responses

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SUPPORTS FEASIBLE JOURNEY OF IMPROVEMENT

•  Start answering the eight overarching questions; aim to answer all 31 questions over time

•  Focus on narrative to show the whole picture and identify areas for improvement

•  Practical guidance about how to provide a meaningful answer to the questions

•  Seamless implementation alongside other reporting initiatives

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HOW IS THE FRAMEWORK RELEVANT TO THE OECD DUE DILIGENCE GUIDANCE?

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SUPPORTS RISK MANAGEMENT…

The Reporting Framework helps companies to know and show that they are respecting human rights in practice. à Supports effective human rights due

diligence à Consists of questions to which companies

need to have answers to be sure they are managing risks

à Enables companies to identify weaknesses they need to address

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…AND FACILITATES MEANINGFUL ENGAGEMENT WITH STAKEHOLDERS

•  Provides stakeholders with a set of targeted questions to raise with companies

•  Supports more meaningful dialogue between companies and stakeholders

•  Provides a basis for assessing and comparing the quality of disclosure, pressing for a race to the top

•  Creates an essential stimulus for improved human rights performance

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GUIDANCE FOR IMPLEMENTING THE REPORTING FRAMEWORK

Guidance for each question includes:

• Objective• Supporting guidance• Relevant information to include• Guiding Principles reference point• References points in other initiatives

à Not a due diligence guide, but a tool that can support due diligence.

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CROSS REFERENCES TO OTHER REPORTING INITIATIVES

•  GRI (Global Reporting Initiative G4 Sustainability Reporting Guidelines)

•  OECD (OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas)

•  UNGC (UN Global Compact Advanced COP Self-Assessment)

•  DJSI (RobecoSAM - Corporate Sustainability Assessment [DJSI Sample Questionnaire])

•  FTSE ESG (FTSE ESG Ratings Methodology and Usage Summary)

•  VPSHR (Voluntary Principles on Security and Human Rights Reporting Guidelines)

•  ICMM (International Council on Mining and Metals Assurance Framework)

•  GNI (Global Network Initiative: Governance Charter, and Implementation Guidelines)

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UN Guiding Principles Reporting Framework

OECD Due Diligence Guidance for Responsible Supply Chains

SECTION A - GOVERNANCE FOR RESPECT FOR HUMAN RIGHTS

Policy Commitment A1 OECD-1 A1.1 OECD-1A A1.2 OECD-1A A1.3 Where this relates to dissemination of a public commitment on human rights: OECD-1B (in

supplements on Tin, Tantalum and Tungsten and on Gold), OECD-1D, OECD-5

Embedding Respect for Human Rights A2 OECD-1, OECD-3, OECD-4, OECD-5 A2.1 OECD-1B A2.2 OECD-1B, OECD-3A, OECD-3C A2.3 OECD-1B A2.4 OECD-1A,C,D and E, OECD - 3B,C and D, OECD-4 A2.5 OECD-3B SECTION B - DEFINING THE FOCUS OF REPORTING

SECTION C - MANAGEMENT OF SALIENT HUMAN RIGHTS ISSUES

C1 Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-1 and OECD-3

C1.1 Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-1A, OECD-1B, OECD-1D, OECD-3C

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Questions in UNGPs Reporting Framework



Stakeholder Engagement C2 Where supply or use of minerals from conflict-affected and high-risk areas is a salient

human rights issue: OECD-1A, OECD-2 and OECD-3

C2.1 Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-2A and B

C2.2 Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-2B, OECD-3B, C

C2.3 Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-3B, C and D

Assessing Impacts C3 Where supply or use of minerals from conflict-affected and high-risk areas is a salient

human rights issue: OECD-3 C3.1 Where supply or use of minerals from conflict-affected and high-risk areas is a salient

human rights issue: OECD 1D and 1E, OECD-3C and 3D

C3.2 Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-3C and 3D

Integrating Findings & Taking Action C4 Where supply or use of minerals from conflict-affected and high-risk areas is a salient

human rights issue: OECD-1 and OECD-3 C4.1 Where supply or use of minerals from conflict-affected and high-risk areas is a salient

human rights issue: OECD-1B C4.2 Where supply or use of minerals from conflict-affected and high-risk areas is a salient

human rights issue: OECD-3B and 3C C4.3 Where supply or use of minerals from conflict-affected and high-risk areas is a salient

human rights issue: OECD-3C and 3D 29


Questions in UNGPs Reporting Framework



Tracking Performance C5 Where supply or use of minerals from conflict-affected and high-risk areas is a salient

human rights issue: OECD-3 and OECD-4

C5.1 Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-3C and OECD-4

Remediation C6 Where supply or use of minerals from conflict-affected and high-risk areas is a salient

human rights issue: OECD-1 and OECD-3

C6.1 Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-1E, OECD-3C

C6.2 Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-2B, OECD-3C and 3D

C6.3 Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD 1E, OECD-3C and 3D

C6.4 Where supply or use of minerals from conflict-affected and high-risk areas is a salient human rights issue: OECD-3C

C6.5 ------

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à The first adopter and pilot company, Unilever, is planning to issue its report in June 2015

à Ericsson 2014 sustainability report released in April 2015

à Many other companies indicate they have begun to use the Reporting Framework, including as an internal management tool

First adopter Other early adopters

WHO SUPPORTS THE REPORTING FRAMEWORK?

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“The undersigned investors, with $3.91 trillion assets under management, support the UN Guiding Principles Reporting Framework. We hope it will incentivize improved disclosure and see it as an essential tool that enables investors to review companies’ understanding and management of human rights risks. It will also guide us in our engagement with companies going forward.”

Lead signatories of statement of support

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“There is an urgent need for the UN Guiding Principles Reporting Framework. Reporting and assurance have long been lagging, and this is the perfect way to implement the human rights chapter of the OECD Guidelines for Responsible Business Conduct.”

- Roel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct

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“The business community very strongly endorsed the UN Guiding Principles when they came out, but until today they haven’t had the actual reporting tool that enables them to know and show that they respect human rights – which is what they’ve committed themselves to doing.” - Professor John Ruggie, Former Special Representative of the UN Secretary-General for Business and Human Rights,

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LEARN MORE

www.UNGPreporting.org @UNGPreporting

Human Rights Reporting and Assurance Frameworks Initiative (RAFI)

http://www.business-humanrights.org/Documents/RAFI

Beth Holzman Advisor, Shift

[email protected] 35