With a heightened awareness of human rights risks and modern slavery, the “S” (Social) limb of ESG is an increasingly important area of focus for businesses, regardless of size, sector or geographic location. The government, customers and other stakeholders have a growing expectation for all businesses to adopt a responsible approach not just to their own business practices but also their supply chains to proactively address the impacts of their activities on the environment, society and people.
By implementing robust policies and processes to identify, prevent or mitigate adverse human rights impacts, businesses can protect and enhance their brand, investor relations and access to finance. Conversely, failure to address human rights risks can lead to costly litigation and reputational damage.
In the UK, the ESG legal regime requires disclosure against human rights factors in different forms of corporate reporting, a duty for directors to consider ESG factors when making business decisions, and increased oversight over supply chain activities. The list of UK and EU legislation mandating human rights requirements is extensive and not limited to:
- Modern Slavery Act 2015: Requires commercial organisations with an annual turnover of £36m and above to publish an annual slavery and human tracking statement to disclose the steps taken to prevent modern slavery in the supply chain.
- Companies Act 2006: Imposes a duty on directors to promote the success of the company and in doing so, must have regard, amongst other things, to the impact of the company’s operations on the community and the environment, the need to foster relationships with suppliers, the interests of the company’s employees, and the desirability of the company maintaining a reputation for high standards of business conduct.
On the horizon, the Corporate Sustainability Due Diligence Directive will impose obligations on large EU companies and Non-EU companies which operate in the EU over a certain financial threshold to implement human rights and environmental due diligence measures on the entirety of their supply chains. The EU Corporate Sustainability Reporting Directive will impose reporting obligations on large EU companies to publish information relating to ESG matters.
In light of the inclusion of the ‘soft law’ human rights standard, the UN Guiding Principles on Business and Human Rights, in mandatory reporting and other regulatory requirements in an increasing range of jurisdictions, many businesses are refining their human rights policy commitments and implementing them through due diligence processes, impact assessments and compliance systems. We work closely with clients across the spectrum of governance, advisory, transactional, risk management, compliance and dispute resolution issues associated with business and human rights.
Drawing on expertise from our acclaimed environment, employment, corporate and disputes teams – and from sector specialists throughout the firm – we build our service entirely around the client. We also advise clients on bespoke compliance strategies and work with other experts across the globe to provide comprehensive advice across multiple jurisdictions.
Areas of focus
Our human rights expertise includes advising businesses and investors on the following:
- Modern Slavery Statement compliance check
- Advising on reporting requirements and stakeholder engagement
- Advising on human rights and workforce related policy, governance, sustainability and risk management issues
- Bespoke ESG compliance strategies across multiple jurisdictions
- Dispute resolution
- Business crime and regulatory investigations
- Reputational and public relations issues
- Internal investigations
- Corporate and asset acquisitions and disposals, legal due diligence, support and advice in connection with transactions
- Supply chain legal due diligence
- Employment and incentives
- Advising in the context of healthcare provision
- Advising on immigration
- Advising on the growth of international trade
- Advising on all types of on and offshore business processes.