What exactly is Responsible Business Conduct (RBC) or Corporate Social Responsibility (CSR)?
Going above basic legal compliance with local and international laws and regulations, CSR or RBC requires corporations to work with the ten internationally-agreed principles of the UN Global Compact and:
- Regularly manage their operational adverse impacts on these principles, as dictated by the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises (OECD-GME), and
- Positively contribute to these principles, as guided by the 17 Sustainable Development Goals (widely considered the "blueprint to achieve a better and more sustainable future for all").
In a nutshell, RBC or CSR is how corporations take responsibility for contributing to – while managing their adverse impacts on – internationally-agreed principles for sustainable social, environmental and economic development. To put simply, responsible companies need to make sure that (1) their operations do not negatively impact human (including labour) rights, environment (and climate) and anti-corruption principles, and (2) they proactively contribute to furthering the sustainable development goals.
How does RBC or CSR looks like in a practical context?
In a practical context, a company that implements Responsible Business Conduct standards has succesfully:
- Established a policy commitment that outlines and embeds the company's responsibility to respect human rights, the environment and anti-corruption principles.
- Created a continuous process of due diligence that addresses and documents the company's actual adverse impacts or potential adverse impacts (risks) on the internationally-endorsed principles for sustainable social, environmental and economic development.
- Set up or been actively participating in a remediation system that enables the remediation of any adverse human rights, environmental or economic impacts the company causes or to which it contributes.
This due diligence process also involves embedding the RBC commitment in all contracts governing relations with the company's business relationship and extending the same requirements of RBC standards to all business relationships. This is known as Responsible Supply Chain Management and the best way to do this is through a process of active collaboration and knowledge exchange, such as the one facilitated by the IMPA ACT initiative for the global shipping industry.
A company that implements Responsible Business Conduct standards as described above can indisputably claim that it meets the globally-agreed minimum standard for social, environmental and economic sustainability, i.e. the UNGPs and the OECD-GME. The company has, in other words, "a social licence to operate".
What constitute business relationships for the purpose of meeting the minimum standard?
The shipping industry has a global nature and companies build relationships both with their upstream value chain (suppliers) and the downstream value chain (distributors, customers and clients). While a company’s supply chain is usually understood to only be limited to the upstream value chain, the UNGPs and OECD-GME extended the responsibility to respect internationally-endorsed principles for human rights, environment and anti-corruption to all business relationships established by acompany.
Thus, a corporation’s duty to work with CSR covers suppliers, distributors, customers and clients. In the process of responsible supply chain management, however, it is often the case that a company's suppliers will often demand the most resources, so it is a good idea to prioritise this engagement.
Why is meeting the minimum standard for Responsible Business Conduct important?
RBC - when done correctly and in alignment with the globally-endorsed minimum standard (UNGPs and OECD-GME) - hugely increases a company's visibility in its value chain and allows the company to identify current and potential risks that could endanger its reputation or financial success. Here are some more benefits:
- Fulfil global expectations on CSR - By implementing the UNGPs and OECD-GME, you are complying with the globally-endorsed standard on business and human rights, environment and anti-corruption.
- Manage risks in your supply chain - Regular social, environmental and economic due diligence is preventative and can give you the knowledge to foreseerisks and end, mitigate or prevent them from materialising.
- Ride the wave - Identifying your impacts on human rights, environment andanti-corruption will help you avoid unpleasant surprises andenable you to show how your company respects these.
- Prevent near misses - By regularly identifying impacts on all rights and principles,you become aware of those you may have overlooked andcan prevent them from escalating.
Is the minimum standard on RBC difficult to meet?
Many companies find it challenging to navigate the guides and principles, especially where they cannot benefit from internal CSR expertise. This is where companies like Alexony can come in and assist businesses with identifying where they are in their journey, help them set up the necessary processes and procedures (including a policy commitment), conduct their first impact assessment across social, environmental and economic rights and principles, share guidance and specific templates, and make it easier for them to continue maintaining their work with CSR.
