The GRI Perspective

Better human rights reporting needed now, but how?
Issue 6 - 4 May 2022

The recently released 2021 Workforce Disclosure Initiative (WDI) report warns of an
incomplete picture being provided to investors. The major issue? Human rights. Thisannual survey found almost half of firms had not implemented the measures needed toadequately handle and reduce human rights risks, including recourses to remedies andgrievance mechanisms.
The WDI survey is supported by a 66-strong investor coalition with over $10 trillion undermanagement. Why? Because the more information available, the better job investors can
do in working with companies to create value for both shareholders and society. This isabout putting into action Larry’s Fink of BlackRock’s recent comments, that “access tocapital is not a right. It is a privilege”.
As acknowledged by shareholders, many of the questions investors ask of companies
about their social and human rights practices could be dealt with by enhanced reporting.
The only credible standards for organizations to effectively report on human rights
impacts are the GRI Standards. The updated Universal Standards have incorporated
human rights into the core of reporting requirements.

The S in ‘social’ starts with human rights
With an increased shift in focus to the S in ‘ESG’,human rights are the most logical starting point,
as they form the basis for wider reporting notjust on social topics but also across the entire
sustainability spectrum. However, investors andother stakeholders face challenges in assessing
the performance of firms on a range of social
metrics. With so much attention on the availability
and accuracy of environmental data - mainly due
to moves towards mandatory disclosure on climate
risks - access to and monitoring of social data
seems to be partly forgotten.
Moreover, social data is more complex because of
the challenges of measuring the ‘impact’ element ofhuman factors. After all, it is easier to quantify aton of carbon than the value of a human life. Until
now, various agencies and watchdogs, such as theCorporate Human Rights Benchmark of the World
Benchmarking Alliance, the Business & Human
Rights Resource Centre, and the Human Rights
Watch, have taken up some monitoring functions

on the impact on human rights by businesses
and governments. The existing difficulties around
access to social data are being gradually addressedin response to growing stakeholder demands.
The clearest sign is the current spate of ESG
shareholder proposals, where multinationals faceproxy votes on social topics, including the right toorganize, diversity, health and safety, as well as tax.
Enhanced reporting not only helps organizations
improve their decision making by managing theirstrategic commitments and risk management, it also
allows them to engage with stakeholders by sharing
information in a consistent and comparable way. The
GRI Standards offer the strongest coverage of S in
‘ESG’ - with 17 standards covering social topics andmany other topic Standards that are relevant froma social perspective. These range from health andsafety to discrimination, supplier assessment andcustomer privacy, allowing reporting entities to show
their true impact.

2The significant update to the GRI Universal
Standards, launched in October 2021, included thefull integration of human rights reporting, rather thanbeing an optional, stand-alone topic Standard (whatwas GRI 412). This means that, for the first time,
all organizations using the GRI Standards are
expected to report on how they respect humanrights.
Standards on social topics
GRI 401: Employment
GRI 402: Labor / Management Relations
GRI 403: Occupational Health and Safety
GRI 404: Training and Education
GRI 405: Diversity and Equal Opportunity
GRI 406: Non Discrimination
GRI 407: Freedom of Association and Collective
Bargaining
GRI 408: Child LaborGRI 409: Forced or Compulsory LaborGRI 410: Security Practices
GRI 411: Rights of Indigenous Peoples
GRI 413: Local Communities
GRI 414: Supplier Social Assessment
GRI 415: Public PolicyGRI 416: Customer and Health Safety
GRI 417: Marketing and Labelling
GRI 418: Customer Privacy

Where to start? Due diligence
The most logical question many practitioners face interms of human rights reporting is: how to go about
it? For this the process of human rights due diligence(HRDD) has been designed as the common practiceby which companies need to account for how they
address their adverse human rights impacts.
Getting back to basics, human rights are inherent
to all people, which include, at a minimum, the 30
rights in the UN International Bill of Human Rightsand the principles concerning fundamental rights in

the International Labor Organization’s Declaration on
Fundamental Principles and Rights at Work. HRDD
is the process companies should use to identify,
prevent, mitigate and account for how they address
their impacts on human rights. When looking at itfrom a distance, it very much looks like the financial
risk management control frameworks. We will cover
the topic of due diligence reporting in more depth infuture issues of The GRI Perspective.

3

Why GRI? A new bar for human rights reporting
The updated GRI Universal Standards raised the standard for human rights reporting andenvironmental due diligence, being the first and only global reporting standards to fully align withtransparency expectations for sustainability impacts on human rights, as set out in authoritative andintergovernmental instruments. These include the UN Guiding Principles on Business and Human Rights;
OECD Guidelines for Multinational Enterprises; OECD Due Diligence Guidance for Responsible BusinessConduct; ILO International Labour standards; and ICGN Global Governance Principles.

Universal Standards
Requirements andprinciples for using theGRI Standards
GRI 1Disclosures about thereporting organization
GRI 2

GRI 3

Disclosures andguidance about theorganization's material
topicsHuman Rights
1. All human being free and equal

16. Right to marry and have a family

2. No discrimination

17. Right to own things

3. Right to life

18. Freedom of thought and religion

4. No Slavery

19. Freedom of opinion and expression

5. No torture & inhuman treatment

20. Right to assemble

6. Same right to use law

21. Right to democracy

7. Equal before the law

22. Right to social security

8. Right to treated fair by court

23. Right to work

9. No unfair detainment

24. Right to rest and holiday

10. Right to trail

25. Right of social service

11. Innocent until proven guilty

26. Right to education

12. Right to privacy

27. Right of cultural and art

13. Freedom of movement & residence

28. Freedom around the world

14. Right to asylum

29. Subject to law

15. Right to nationality

30. Human rights cannot be taken

It may seem uncontroversial and even logical to root human rights into standards applicable to all, rather
than leave it open for debate whether they should be deemed material. Indeed, human rights are theessential linking pin for the entire thinking on ESG. One of the reasons GRI decided to update it’s
the Universal Standards is reporting readiness. The world is facing a critical moment in the elaborationof mandatory HRDD regulations – with the updated GRI Standards a timely tool to meet these upcomingrequirements.
h First, adherence to the UN Guiding Principles
on Business and Human Rights (UNGPs) underwhich all businesses have a responsibility torespect human rights, and the process of HRDD
is a core requirement in that responsibility. TheUNGPs also mandate that states’ internationalhuman rights law obligations include the duty toprotect against abuses by business.

h Secondly, the wave of legal requirements onresponsible business impacting markets acrossthe world. Many countries – especially in Europe– are introducing mandatory HRDD. In addition,
the European Commission itself has proposed
the Sustainable Corporate GovernanceDirective (also referred to as the EU Supply
Chain Directive or Human Rights Due Diligence
Directive).

GRI’s updated Universal Standards provide the best positioning for reporting
entities to respond to all of these emerging regulatory requirements.

4How we can help

Our ask

Human rights is at the core of your sustainability
report. Yet we recognize that effectively applying
GRI Universal Standards requires support.

We are an international non-profit organization thatreflects multi-stakeholder interests by developing
and setting world-class sustainability reporting
standards.

The GRI Academy offers specific training on theupdated GRI Universal Standards, to equip reportingorganizations and business practitioners withrelevant knowledge and skills. Learn more about thefull range of GRI’s services and tools that are herefor you.

Our standards are free to use, but not free todevelop. Creating and maintaining standards is timeand resource intensive. To enable us to keep up thegood work and stay on the leading edge of corporate
sustainability reporting we need your support!

Get in touch Barbara Strozzilaan 336
1083 HN Amsterdam
The Netherlands
www.globalreporting.org

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