Business activities generate investment, jobs and economic growth, but they can sometimes have undesirable side-effects too. The Federal Council expects companies to exercise human rights due diligence. Integrating this in existing processes within companies offers many advantages.
Advantages of human rights due diligence processes
Types of potential adverse impacts
Human rights due diligence
Respecting human rights and putting in place a due diligence process offers strategic advantages to companies, such as:
Increased competitiveness and better market access
There is an expectation on the part of governments, investors, business partners and consumers that business enterprises respect human rights.
Respect for human rights helps to safeguard business relationships. It is common for SMEs to supply larger companies that require them to respect human rights through contractual clauses or codes of conduct. When businesses respect human rights, they are considered reliable partners. This facilitates access to national and global markets as a result of an increased ability to meet the requirements of buyers and the relevant legislation.
In addition, respect for human rights allows businesses to target new market segments and new sources of funding. Some governments can demand that businesses comply with international standards to be awarded public contracts or access State financial support.
Enhanced productivity and product quality
Human rights due diligence generally highlights new risks associated with products and services at an early stage, and consequently improves the management of general business risks. For example, production or supply disruption caused by strikes, occupational accidents or disputes can be avoided. Better working conditions also go hand in hand with increased productivity.
Improved employer attractiveness
Employees increasingly care about employer values. A corporate culture that is mindful of human rights can therefore be a motivating factor for employees. This in turn can make employees identify more strongly with the company and contribute to its growth.
Internally, considering employee rights allows businesses to employee people in better health, to improve workplace relationships and safety, and to resolve internal problems, which helps reduce the rate of staff turnover.
A boost to reputation and greater resilience
Human rights due diligence also boosts companies’ reputations. Given the speed with which stories are picked up by the media and social media, human rights abuses in supply chains are quickly reported, and can damage the reputation of the companies involved. Respect for human rights throughout the value chain therefore also means protecting the reputation of your own business, safeguarding brand values and avoiding potential legal costs.
Due diligence requirements are increasingly common internationally. Some governments (in particular France, the UK and the Netherlands) as well as the European Union have introduced legislation that may also affect foreign businesses, including Swiss ones, in their day-to-day business operations. Human rights due diligence thus allows businesses to better respond to possible domestic or European legislation.
The UNGP distinguish between three types of adverse human rights impacts on the part of business enterprises:
- Business enterprises may abuse human rights through their own activities.
- Business enterprises may contribute to abuses of human rights through their activities.
- Business enterprises may be involved in abuses of human rights via their business relationships, without contributing to those impacts themselves.
Under the UN Guiding Principles, the corporate responsibility to respect human rights applies to all business enterprises, regardless of the size, the sector, the environment, ownership or structure.
Business enterprises that are based and/or operating in Switzerland should duly fulfil their duty to uphold human rights. Human rights due diligence is a core element of the corporate responsibility to respect human rights.
Due diligence should include the following measures:
- Identify potential and actual risks and impacts,
- take precautions to minimise them,
- review measures,
- report on activities and identified risks.
The federal government understands its role as being to support business enterprises with the implementation of the UNGP, to create incentives to comply with them and to encourage business enterprises to respect human rights. With this NAP the federal government is contributing towards the respect for human rights by business enterprises also when they operate outside of Switzerland.
Swiss companies are viewed as pioneers in the development of the global market and the creation of jobs and welfare. Many of these believe that respect for human rights is of strategic importance to their operations (in terms of, for example, competitive advantage, market positioning, greater productivity and avoiding reputational risks). Nowadays, increasing numbers of business enterprises are fulfilling their human rights responsibilities in a conscious way. Both business enterprises and civil society stakeholder groups are supporting and furthering respect for human rights with a wide range of programmes. Indeed, respect for human rights forms an integral part of many companies' corporate social responsibility (CSR) activities. More information about CSR can be found on the website of the Confederation.
