On Business, Human Rights and Globalisation
As we release our first Human Rights report, Professor John Ruggie argues that caring for people and planet, in addition to being the moral imperative of our time, must become a core business mission.
The issue of business and human rights is not new. After all, the slave trade involved businesses; governments were complicit; and the abolitionist movement was led by civil society, campaigning against governments and the business of slavery alike. What is new today? Why does a company like Unilever make bold human rights commitments, establish robust systems to manage its adverse impacts, and proactively contribute to the realisation of rights within its value chain, covering 190 countries?
What’s new is that the most recent wave of globalisation has created a massive gap between the scope and impact of economic factors and actors, and the ability of societies to deal with the consequences. Enlightened corporate leadership has come to recognise that caring for people and planet, in addition to being the moral imperative of our time, must become a core business mission in order to secure the sustainability of open markets and the corporate forms that constitute the very basis of globalisation.
The power and limits of markets
Business is the major source of investment and job creation, and markets can be highly efficient means for allocating scarce resources. They constitute powerful forces capable of generating economic growth, reducing poverty, and increasing demand for the rule of law, thereby contributing to the realisation of a broad spectrum of human rights. But markets work optimally only if they are embedded within frameworks of rules, customs and institutions. Markets themselves require these to survive and thrive, while society needs them to manage the adverse effects of market dynamics and to produce the public goods that markets undersupply.
Globally, such frameworks are one of the undersupplied public goods. When it comes to business and human rights, there is no global regulator. The best we can say is that governance is ‘polycentric’, in that it involves three distinct governance systems.
The first is the traditional system of public law and governance, domestic and international. Important as it is, by itself it has been unable to do all the heavy lifting on this and many other global challenges.
The second is a system of civil governance involving stakeholders affected by business enterprises, employing such social compliance mechanisms as advocacy campaigns, law suits and other forms of pressure, and also partnering with companies to induce positive change.
The third is corporate governance, which internalises elements of the other two as constraints, risks and opportunities. A key challenge is to better align the three in such a way that they compensate for one another’s shortcomings and play mutually supportive roles from which cumulative change evolves over time.
A changing landscape
As an academic, I have studied these processes. In my roles as United Nations Assistant Secretary-General for Strategic Planning and subsequently as the Secretary-General’s Special Representative for Business and Human Rights, I have had the opportunity to contribute at a practical level. I introduced the idea of the Millennium Development Goals and secured their endorsement by the General Assembly.
They expire this year and will be succeeded by new Sustainable Development Goals. I was the co-architect of the UN Global Compact, now the world’s largest and geographically most inclusive corporate citizenship initiative with more than 8,000 corporate participants and national networks in some 90 countries. And I authored the UN Guiding Principles on Business and Human Rights, endorsed unanimously by the Human Rights Council. Unilever is the first company to issue a human rights report using the Guiding Principles reporting framework, and it sets the bar for comprehensiveness and transparency.
Making globalisation work for all
Reflecting on these experiences, I am gratified by how far we have come in a relatively short period of time. Looking at the challenges we still face, I am also humbled by how much more needs to be done – and by the fact that time is of the essence. The broader business community must follow the path charted by Unilever and other leading companies and act upon our collective responsibility to make globalisation work for all – because if it doesn’t, in the end it will work for none.