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The wages of fear

EOS Insight
19 August 2022 |
With new US regulations and EU due diligence rules coming down the track, companies will need to work harder at identifying human rights risks in their supply chains. How do we engage with companies on this challenging issue?
The wages of fear

Runaway fuel and food prices, and the Covid-19 pandemic, have pushed many people closer to the brink of destitution over the last two years. The climate crisis is also negatively impacting working conditions for millions of people around the globe. Low-income outdoor workers, such as those employed in agriculture or construction, are especially vulnerable to heat stress, making their working lives a misery, and impacting productivity and output.

But with new regulations coming into force in the US and EU to tackle human rights issues, investors and companies must get ahead of these, or run the risk of fines, lawsuits or reputational damage.

Our engagement with companies on this topic focuses on their responsibility to respect human rights as outlined by the UN Guiding Principles. This begins with aspects such as policy and governance, but also encourages companies to do more to document effective human rights due diligence that has identified supply chain impacts and provided remedy. We engage on how a company can provide meaningful grievance mechanisms that allow affected workers to be heard, and provide feedback for solutions.

We also encourage companies to move beyond the relatively standard process of auditing supply chains to consider how their own actions may be exacerbating poor working conditions. Falling under the umbrella term of purchasing practices, this challenges the common approach of pushing much of the burden for improving working conditions on to suppliers alone. Companies should also use their leverage and collaborate with each other, recognising that transformative change requires collective action.

Read the full article in our Q2 2022 Public Engagement Report.

The wages of fear

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