Humans are not machines but rather social beings. And that’s our strength of our economy. We are at our best and happiest when we collaborate and share. But what happens when individuals have their human rights put at stake because of the way a company operates? How can companies remediate the adversity they cause?

Protect, respect & remedy

In June 2011, the first global standard to prevent and address the risk of adverse impacts on human rights linked to business activity was launched. Colloquially known as the Ruggie Framework due to the professor who developed them, the Guiding Principles for Business and Human Rights (UNGP) builds on three core pillars of protect, respect and remedy. Whilst many companies have policies and procedures to protect and respect human rights, the implementation of remediation mechanisms remains slower on the uptake.

Grievance mechanisms

So what are grievance mechanisms exactly? Well for a start, they are structured processes that address disputes or grievances that arise between two or more parties engaged in business, legal, or societal relationships. They can incorporate conciliation, conflict resolution, mediation, and negotiation, and can be at various levels such as company or sector. Their design may be dialogue-based and problem-solving such as mediation. Others may be investigations that lead to recommendations or statements to address a company’s behaviour and responsibilities. 
Ideally, affected parties have access to both judicial and non-judicial options. Judicial grievance mechanisms (resolved within the court of law) are the responsibility of governments, however they are not always available or they don’t work effectively. Non-judicial grievance mechanisms, such as sector initiatives and company hotlines for (anonymous) reporting of wrongdoing, can be more effective. Corporate mechanisms can be crucial for early recourse and resolution; engagement and dialogue with (potentially) affected parties is important to aiding investigation. The downside of corporative mechanisms though is that they tend not to earn as much trust because they’re often operated by the company alleged to have caused the abuse in the first place.

Uptake slow

Only a few companies have fully embraced the UNGP and options for remediation in particular remain slow on the uptake. Companies that already adhere to, and implement the framework, are considered to be human rights due diligence frontrunners. There are a handful of companies that have implemented a robust grievance mechanism. One company is German sportswear manufacturer Adidas, which is included in the Triodos Sustainable Investment Universe. In October 2014, Adidas released its’ Third Party Complaint Process for Breaches to the Adidas Group Workplace Standards or Violations of International Human Rights Norms. The process builds on the company’s ten-year employee complaints system and provides for an easily accessible and simple procedure for affected parties. Engagement with community and/or civil society stakeholders is included in the investigation process of a complaint. Immediate remediation is also available if Adidas has directly contributed to a violation of international human rights norms or its own Workplace Standards. 

Triodos will continue to encourage many more companies to establish human rights complaints processes and systems, to provide opportunities for aggrieved parties to resolve their disputes and reinforce positive societal interaction.

Note: The issues explored in this article are relevant for sustainable investments on the stock market. Triodos Bank believes that our socially responsible investments are a powerful means of promoting our values and working for greater sustainability, while enabling us to offer a complete range of attractive investment options to customers who choose to invest on the stock market.