4-19. Practical Implications of the UN Guiding Principles on Business and Human Rights

The United Nations Guiding Principles on Business and Human Rights (UNGPs) have become the international standard for respecting human rights in business activities since their adoption by the UN Human Rights Council in 2011. The principles are based on three pillars: the state's duty to protect, the corporate responsibility to respect, and the need for access to remedy. They have a significant impact on companies operating globally, particularly by demanding human rights risk management across the entire supply chain, a process closely linked to EHS (environmental, health, and safety).

1. The State's Duty to Protect and Regulatory Strengthening

The UNGPs call on states to establish legal frameworks and policies to prevent human rights abuses by companies. In response, mandatory human rights due diligence is advancing, particularly in Europe. Representative examples include Germany's Supply Chain Due Diligence Act, France's Corporate Duty of Vigilance Law, and the EU's proposed Corporate Sustainability Due Diligence Directive (CSDDD). These regulations will inevitably affect Japanese companies through their exports and supply chains.

2. Corporate Responsibility to Respect and Practical Actions

Companies have a responsibility to identify, prevent, and mitigate human rights risks within their operations and supply chains. This requires several practical actions:

• Establishing a human rights policy: Clearly state the commitment of senior management and embed it throughout the organization.

• Conducting risk assessments: Identify risks related to labor safety, forced labor, child labor, and discrimination.

• Taking remedial action and follow-up: Respond swiftly to identified issues and continuously monitor improvements.

• Ensuring transparent disclosure: Publicly report on human rights due diligence efforts in sustainability reports and on company websites.

3. Access to Remedy and Grievance Mechanisms

The UNGPs require companies to provide effective mechanisms for people who have been harmed to seek redress. Companies are encouraged to set up internal whistleblowing systems and grievance channels for suppliers. Establishing these mechanisms can lead to the early resolution of potential conflicts and protect a company's brand reputation.

4. Pressure from Investors and Customers

With the growth of ESG (Environmental, Social, and Governance) investing, investors now view a company's response to human rights risks as a crucial factor in their evaluations. In addition, major global companies are increasingly conditioning procurement on the implementation of human rights due diligence, which in turn impacts small and medium-sized enterprises within their supply chains.

5. Practical Challenges and Future Outlook

Even multinational corporations find it difficult to fully grasp human rights conditions across their entire supply chains, and data collection and on-site investigations can be very costly. Although the UNGPs are not legally binding, they are being incorporated into national regulations and investor requirements, solidifying their status as a de facto international standard.

Conclusion

The UN Guiding Principles on Business and Human Rights are no longer just an ethical guideline for companies; they are a vital component of business strategy and supply chain management. For a company to achieve sustainable growth, it is essential to institutionalize human rights due diligence based on the UNGPs and provide transparent disclosure of its efforts.