Gregory GjiniIs your company required to comply with national or international legislation for corporate social responsibility? For example, the Norwegian Transparency Act or the EU's upcoming Corporate Sustainability Due Diligence Directive (CSDDD)? Or have you voluntarily committed to following for example the OECD guidelines?
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Regardless of your starting point and level of ambition, the work begins by developing a policy that should be endorsed by the company's board and management. This is a guide that helps you and your company create the actual document that describes the company's policy on human rights and environmental considerations.
how to use this guide
It is intended as a practical tool; if you answer the questions in the guide, you will have all the text you need for a policy. It is also a guide that can be used to quality-assure your company's existing policy. Does the current policy address all or most of the questions you find here?
The guide is structured by first describing the different sections of a policy. Afterward, a set of questions follows for each section. When you answer the questions by entering them into a blank document, you will ultimately have a policy. Just add the headings!
At House of Control, we were early in creating software to help Norwegian companies comply with the Transparency Act, which came into effect in the summer of 2022. It is software that structures and simplifies the process of conducting due diligence assessments.
A policy comes before due diligence assessments
A policy comes before due diligence assessments, and several of our customers have mentioned that creating the document itself is challenging – and ensuring that it meets the requirements of a policy. Our goal with this guide is that it can be of practical help when you create a policy.
The guide has been created with a medium-sized company in mind, and we believe that it is easier for you to omit what is not relevant to answer than the other way around.
Good luck with your policy. We hope it contributes to making the world a slightly better place for you and your surroundings!
TABLE OF CONTENTS
The building blocks of company’s policy on human rights and environmental considerations
Checklist: 8 steps for a powerful executive summary
Crafting an effective introduction
Create a policy statement: Your company's unwavering commitments
The guiding principles: Your company’s moral compass
Scope and applicability: Who must follow your guidelines – and how?
Core policy I: Your human rights considerations defined
Core policy II: Your environmental considerations defined
Governance structure: Your bodies for overseeing compliance
Risk management: How do you identify, assess, and mitigate potential risks?
Getting everyone willing and able: Training and awareness
Monitoring and reporting: How to tell the world about your progress
Accountability and enforcement: What are your actions in the case of policy breach?
Conclusion: It’s time to finish with style
The building blocks of company’s policy on human rights and environmental considerations
Creating a corporate policy that emphasizes human rights and environmental considerations in operations and corporate governance is a crucial step towards responsible business practices.
There is no law prohibiting you from being inspired by other companies’ policies. However, remember that the policy should be tailored to your company's specific industry, values, and goals. Engaging stakeholders and seeking expert advice during the drafting process can help ensure that the policy is comprehensive and effective.
Below is a detailed roadmap to help you write such a policy. For each step, we provide a detailed check-list on the following pages.
- Executive summary: Provide a concise overview of the policy's purpose, significance, and expected outcomes. Highlight the commitment to uphold human rights and environmental sustainability in all aspects of the company's operations
- Introduction: Explain the context and rationale behind the policy. Discuss the importance of aligning business practices with ethical, social, and environmental considerations.
- Policy statement: Clearly state the company's commitment to respecting human rights and minimizing its environmental impact. Highlight the integration of these considerations into decision-making processes and business operations.
- Guiding principles: Define the fundamental principles that will guide the company's actions. These principles could include respect for human dignity, non-discrimination, social responsibility, environmental protection, and transparency.
- Scope and applicability: Specify the scope of the policy, including the departments, divisions, and subsidiaries it covers. Clarify how the policy applies to employees, contractors, suppliers, partners, and stakeholders.
- Human rights considerations: Detail how the company will uphold human rights. Mention international frameworks such as the Universal Declaration of Human Rights and the UN Guiding Principles on Business and Human Rights. Include commitments to fair labor practices, diversity and inclusion, and preventing human rights abuses.
- Environmental considerations: Outline the company's commitment to environmental sustainability. Highlight the adoption of eco-friendly practices, waste reduction, energy efficiency, and the reduction of carbon emissions. Mention any specific environmental standards or certifications the company aims to achieve.
- Integration into operations: Explain how human rights and environmental considerations will be integrated into various operational aspects, such as procurement, production, supply chain management, and product development.
- Governance structure: Describe the governance structure for overseeing the implementation of the policy. This could involve assigning a responsible committee, officers, or managers who will be accountable for monitoring and reporting on progress.
- Risk assessment and management: Explain how the company will identify, assess, and address potential risks related to human rights violations and environmental harm. Highlight the commitment to due diligence and proactive risk management.
- Training and awareness: Detail plans for educating employees, partners, and stakeholders about the policy. Mention training programs, workshops, and communication strategies to ensure everyone understands and complies with the policy.
- Reporting and monitoring: Explain how the company will measure and report progress towards the policy's goals. Discuss the frequency of reporting, the metrics used, and how the information will be made available to stakeholders.
- Enforcement and accountability: Outline the consequences for non-compliance with the policy. Emphasize the commitment to accountability and responsible business conduct.
- Conclusion: Reiterate the company's dedication to upholding human rights and environmental sustainability. Express confidence in the positive impact the policy will have on the company's reputation, operations, and contribution to society.
- References: Include a list of references and sources that informed the development of the policy.
Checklist: 8 steps for a powerful executive summary
The executive summary serves as an abridged version or a summary of the complete report. It should not be regarded as a replacement for the introduction, and it is not intended to be integrated with the introduction. Instead, its purpose is to encapsulate the report's contents. The intended readership for the executive summary consists of executive-level individuals.
If you follow the eight steps outlined below, we believe you will also get a lot of useful input for the entire process. Write your response to each step in one or two paragraphs. Try to limit yourself to 50-100 words for each step.
- What is the purpose of the policy, and why was this policy developed in the first place?
- What fundamental values, commitments or guiding principles does the policy emphasize?
- What are the main reasons or drivers for implementing this policy? How does this policy align with the company's values and mission?
- What positive changes or improvements do you anticipate as a result of implementing the policy?
- Who will benefit from this policy – your company’s employees, your suppliers’ employees, environmental stakeholders, customers, or other parties?
- How will the policy influence decision-making, operational processes, and corporate governance?
- How will the company track and measure its progress toward the policy's objectives?
- Are there specific milestones or deadlines associated with the policy's implementation? When can stakeholders expect to see tangible results or changes?
Crafting an effective introduction
The purpose of the introduction is to set the context and establish the significance of the policy. As stated above, the introduction is different from the executive summary, and the two should not be combined. However, some of the questions and answers do overlap.
- What is the background and context for developing this policy?
- What national laws and international frameworks or standards support the importance of human rights and environmental considerations in business operations?
- What are the main challenges related to human rights and environmental considerations in your industry or business? How do these challenges impact your stakeholders?
- How does the policy reflect your commitment to responsible and sustainable business practices?
- Why is it crucial to integrate human rights and environmental considerations into business operations and corporate governance?
- How can neglecting human rights and environmental aspects impact the company's reputation, legal compliance, and relationships with stakeholders?
Create a policy statement: Your company's unwavering commitments
The policy statement should encapsulate your company's unwavering commitment to human rights and environmental considerations, including to communicate how these commitments will be integrated into the fabric of the organization. Write your response to each question in one or two paragraphs.
- What are the core values and principles that underpin the company's commitment to human rights and the environment?
- What specific human rights principles are considered non-negotiable by the company? How does the company intend to safeguard human rights within its sphere of influence?
- What environmental goals or standards does the company uphold? How does the company plan to minimize its ecological footprint and contribute to sustainability?
- What is the company's overall approach to integrating these considerations into decision-making processes and daily operations?
- How will the company monitor and enforce adherence to the policy? Are there designated roles or internal committees responsible for oversight?
- How will the company communicate its commitment to these considerations to internal and external stakeholders?
The guiding principles: Your company’s moral compass
The purpose of the guiding principles are to serve as a moral compass for the company's actions, reflecting its genuine commitment to human rights and environmental responsibility. To establish comprehensive guiding principles, we suggest solving this by answering a set of questions.
- What values and beliefs reflect the company's commitment to human rights and environmental responsibility? How do they align with the company's mission and vision?
- Will there be specific guidelines, codes of conduct, or policies that reflect these principles?
- What initiatives or actions will the company undertake to positively impact the societies it operates within?
- How will the company work to minimize its ecological footprint and promote sustainability? Are there specific environmental goals or standards that will guide the company's actions?
- How will the company communicate its efforts, progress, and challenges to stakeholders?
Scope and applicability: Who must follow your guidelines – and how?
The purpose of the scope and applicability section of the policy is to ensure that all stakeholders understand how it relates to their roles and responsibilities within and outside your organization. To effectively define the scope and applicability of your policy regarding human rights and environmental considerations, it's essential to answer a set of questions.
- Which departments, divisions, and subsidiaries will fall under the scope of this policy?
- How will the policy extend to the company's supply chain and business relationships?
- How will the company measure and assess compliance with the policy's principles?
- How will the policy be communicated to all relevant stakeholders? How will awareness be raised among employees, partners, and stakeholders?
Core policy I: Your human rights and fair labor considerations
Now, you are coming to the core of the policy. It’s time to create a human rights considerations section that demonstrates your company's commitment to respecting human rights and outlines a comprehensive approach to integrating these considerations into your business operations.
- Which specific human rights are most relevant to your industry and operations? How do these rights impact your stakeholders, employees, and the communities you operate in?
- Which international guidelines, conventions, or declarations will the company align with?
- What commitments will the company make regarding fair labor practices?
- What steps will the company take to prevent negative impacts within its operations?
- How will the company assess and monitor the practices of suppliers and partners to ensure they meet human rights and fair labor standards? Are there expectations for suppliers to comply with specific codes of conduct or guidelines?
- How will the company train its employees and stakeholders on human rights and fair labor considerations?
- How will the company engage with external organizations and partners on human rights and labor matters?
Core policy II: Your environmental considerations
Now to the second part of the core policy. It’s time to create an environmental considerations section that demonstrates your company's genuine commitment to sustainability and outlines practical steps to minimize your company’s environmental impact.
- What are the specific environmental challenges and concerns within your industry or sector? What environmental issues have the most significant impact on your operations and stakeholders? How do these challenges align with global environmental goals and targets?
- What is your company’s commitment to environmental sustainability? How does this commitment integrate with the company's mission and vision?
- What initiatives or actions will the company take to reduce its environmental footprint? (Waste, energy, emissions.)
- Are there any specific environmental standards or certifications the company seeks to attain?
- How will the company assess and collaborate with suppliers to ensure environmentally responsible practices?
- How will employees be engaged in the company's environmental efforts?
- How will the company monitor its environmental performance and report on its achievements?
Getting practical: How will you integrate human rights and environmental considerations into your operations?
Now it’s time to tell how the policies are put into action. The integration into operations section is there to demonstrate how your company will infuse human rights and environmental considerations into all stages of your operations – creating the “habits” that foster a culture of responsibility and sustainability.
- How will human rights considerations influence the company's procurement processes?
- What steps will be taken to embed human rights into the production processes?
- How will human rights be woven into the fabric of supply chain management?
- In what ways will human rights considerations influence product development?
- How will environmental considerations impact the company's procurement decisions?
- What measures will be implemented to integrate environmental principles into production processes?
- How will supply chain management be influenced by environmental considerations?
- How will the company encourage the creation of environmentally friendly products or services?
- How will human rights and environmental considerations be communicated and enforced throughout the organization?
- How will the company track the impact of these considerations on various operational aspects?
Governance structure: Your bodies for overseeing compliance
You need to describe the governance structure that your company put in place to effectively oversee the implementation of the policy. The governance structure is there to ensure that human rights and environmental considerations are integral to the company's operations and decision-making processes.
- Who will be responsible for driving the implementation of the policy within the organization? How will the roles and responsibilities of key individuals be defined?
- What tasks or activities will the committee, officers, or managers be responsible for?
- What mechanisms will be in place for ongoing monitoring of policy implementation?
- How will the committee or officers facilitate communication and collaboration across departments?
- What steps will the governance structure take in the event of non-compliance or violations?
- How will the committee or officers report on the company's progress and efforts to stakeholders?
- What will be the relationship between the governance structure and senior management?
Risk management: How do you identify, assess, and mitigate potential risks?
The policy also needs a section outlining your company’s approach to identifying, assessing, and mitigating potential risks related to human rights, fair labor and environmental considerations.
- How will the company stay informed about evolving risks within its industry and operations? Are there specific tools, resources, or experts that will be utilized?
- How will the company assess and prioritize risks based on their significance?
- How will the company gather and analyze relevant data to evaluate risks?
- How will the company involve relevant stakeholders in the risk assessment process?
- How will the company take proactive steps to prevent human rights violations and environmental harm?
- How will the company learn from incidents and adapt its strategies accordingly?
- How will employees and stakeholders report concerns related to human rights or environmental issues?
- How often will the company review and update its risk assessment and management strategies?
Getting everyone willing and able: Training and awareness
What does training and awareness regarding human rights and environmental considerations look like in your company? The policy should outline how you work with training and awareness on an ongoing basis. Answering the six steps below should take you a long way.
- Which groups of employees, partners, and stakeholders will benefit from understanding the policy's principles and expectations? Are there specific roles or departments where deeper knowledge is particularly important?
- Are there specific behavioral changes or actions the training aims to promote?
- Will there be workshops, online courses, seminars, or other methods used to convey the policy's information?
- How will the training sessions be designed to encourage participation, discussion, and critical thinking?
- How will the company promote ongoing awareness beyond formal training sessions?
- What role will senior management play in driving awareness and compliance?
Monitoring and reporting: How to tell the world about your progress
Monitoring operations in your own organization as well as among suppliers and business partners is an essential part of responsible business conduct. Due diligence is the key word here. And you will need to report on the outcome of the due diligence processes. Answering the four steps below should take you a long way.
- What methods and due diligence processes will be used to acquire the necessary information to monitor and report on progress towards the goals? Will the company for example use the OECD Due Diligence Guidance for Responsible Business Conduct?
- What measurable indicators will provide insights into the company's performance in upholding human rights, fair labor standards and environmental responsibilities? Are there established benchmarks or industry standards that will be referenced?
- How often will progress reports be generated and shared?
- How will the company ensure the accuracy and reliability of the reported data?
Accountability and enforcement: What are your actions in the case of policy breach?
This is the section where you outline the consequences for non-compliance with the policy. The text needs to emphasize the commitment to accountability and responsible business conduct.
- What are the specific expectations outlined in the policy that must be complied with? How will the company clearly define the actions and behaviors that are required to adhere to the policy's human rights and environmental considerations?
- What mechanisms will be in place to monitor and detect instances of non-compliance?
- How will employees, partners, and suppliers be informed about the potential repercussions of non-compliance?
- Who within the organization will be responsible for enforcing the policy and addressing non-compliance?
- How will the company decide on the appropriate consequence based on the circumstances?
Conclusion: It’s time to finish with style
The conclusion is there to encapsulate the essence of the policy, reaffirm the company's commitment to human rights, fair labor standards and environmental sustainability. To create an effective conclusion that expresses confidence in the positive impact of the policy, consider addressing the following questions:
- What are the core principles, commitments, and goals outlined in the policy that should be emphasized in the conclusion?
- What does the company's dedication to human rights and environmental sustainability mean for its stakeholders – employees, customers, investors, partners, and the broader community?
- How will the policy contribute to improved business practices, enhanced environmental stewardship, and better protection of human rights and labor standards?
- How does the commitment to human rights, labor standards and environmental considerations integrate with the company's broader purpose and long-term goals?
- What measures, such as ongoing monitoring, reporting, and accountability, will ensure the policy's impact is tangible and measurable?
Sources and Disclaimer
The contents of this guide is based on our interpretation of the requirements of the Norwegian Transparency Act, the EU's upcoming Corporate Sustainability Due Diligence Directive (CSDDD), and the OECD Due Diligence Guidance for Responsible Business Conduct.
The structure of the policy guide is influenced by policy documents published by several unnamed companies. We have also partly used artificial intelligence for research purposes. However, following this guide is not a guarantee that users fulfill legal requirements in any jurisdiction. This guide is not intended to be a substitute for advice given by lawyers or legal counsel.
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