From a business perspective, it can seem pragmatic to start your sustainability efforts with an environmental focus. Quantifying environmental impact can be complicated but is essentially data-driven and measurable. Social parameters, by contrast, are more likely to be qualitative than quantitative and often seem harder to grasp.
However, with the increased focus on social impact in our value chains, we have seen a rise in companies adding human rights policies to their sustainability approaches, rather than integrating them in existing efforts. In practice, environmental or circularity approaches are dealt with by different teams and through separate workstreams from their social counterparts.
As experienced sustainability advisors, we see both aspects – the environmental and the social – as two sides of the same coin. One cannot go without the other. Environmental efforts that harm human rights are not sustainable, nor is the protection of human rights at the expense of the environment. Climate change and its detrimental effects have not only had an affect on the environment but also affect human life and wellbeing. In 2012, the United Nations already stated that the effect on the environment is linked to human rights. The UN has also appointed an independent expert on Human Rights & Environment. Recently, the United Nations have underlined this interconnectedness by declaring a healthy environment a human right.
From a practical, corporate sustainability viewpoint, this means that it makes sense to integrate both elements into one approach. Instead of having two policies or strategies regarding sustainability efforts, we encourage businesses to create a single, strong, purposeful policy that brings both the social and environmental aspects together. If that is a bridge too far, consider evaluating potential human rights risks related to your environmental efforts, and vice versa.
To illustrate this, let us take the EU Environmental Taxonomy as an example.
The EU Taxonomy currently focuses on environmental sustainability at financial institutions. Its aim is to create a common language for investors to know if, and to what extent, a financial product is produced with regard for the environment.
To comply with the EU Taxonomy as it is today, even with its present focus on environmental sustainability, it is necessary to implement minimal social safeguards. This means that companies that have or develop sustainable products must also comply with the ILO core conventions on labour rights, the OECD Guidelines and the UN Guiding Principles on Business and Human rights.
In this example, the Taxonomy guidelines clearly recognise that environmental sustainability cannot be achieved without social sustainability. And this makes sense, because how can you work on a positive contribution to the environment by producing e.g., solar panels or recycled raw materials if the social impact of these activities is not considered? Products or business models cannot be promoted as sustainable if both aspects are at odds. Solar panels may reduce our carbon footprint, but they should not be made under harmful labour conditions along the value chain. Recycling of raw materials is applaudable and essential for the reduction of pressure on brittle ecosystems, but the recycling process should be done with care for human rights.
So, if your company wants to contribute to a sustainable future, your sustainability policy must be drafted with both topics in mind. And we are here to help.
This article was written by Anne Manschot and Marijn de Haas.