Human Rights Day: The Role of Business in Respecting People and Their Rights

On December 10, 2023, we celebrate the 75th anniversary of the Universal Declaration of Human Rights. It’s a day to honor and remember the universality and indivisibility of human rights.

For this occasion, I sat down with SAP Chief Sustainability Officer Daniel Schmid and Stephanie Raabe, human rights officer at SAP, to explore what role enterprises including SAP play, what’s new in the company’s recently updated human rights commitment statement, and what trends and challenges both see for human rights in business.

Q: Daniel, what do human rights mean to you? And why is it important for businesses to respect human rights?

Daniel Schmid (DS): Human rights are basic rights for all people to live a life in dignity and be treated equally. For me it’s about ensuring a good life for all within the planetary boundaries. And businesses have a key role to play in this. While they can be a force for good around the world, they can also harm people and the planet; for example, through discrimination, unsafe working conditions, or industrial pollution and accidents with implications on human health. That is why the United Nations Guiding Principles (UN GPs) for Business and Human Rights not only set out the responsibility of states to protect human rights, but also the responsibility of business to respect human rights.

Q: How does this look in practice? How do companies in general and SAP specifically live up to their responsibility to respect human rights?

Stephanie Raabe (SR): Globally recognized frameworks such as the UN GPs or the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct provide clear guidance for companies. They describe how to establish ongoing human right due diligence processes to “know and show” where a company’s actual and potential negative impacts on people are and what actions are taken to prevent or mitigate these. This also entails tracking the effectiveness of actions taken over time, and communicating about efforts and results — internally and externally.

More than two years ago, we launched an interdisciplinary human rights due diligence project at SAP to take our existing human rights commitment statement, governance, processes, and disclosure to the next level and prepare for compliance with rising legal requirements such as the modern slavery acts in UK, Australia, or Canada, the German Supply Chain Due Diligence Act (LkSG), and the upcoming EU Corporate Sustainability Due Diligence Directive. We identified gaps in our policies and procedures, which we have been working to close.

Q: What kind of gaps? Could you share one or two examples?

SR: One example is our grievance mechanism. We collaborated across teams to expand the existing “Speak Out at SAP” tool to cover human rights and environment-related complaints from anyone, be it internal or external. We defined clear rules of procedure of how incoming complaints are processed and followed up on in a confidential and, if desired, anonymous way.

DS: Another example coming to my mind is related to living wages. As a founding member of the Value Balancing Alliance (VBA), we applied the living wage methodology co-developed within the VBA. This helped us find few employees in SAP Brazil in 2022 whose compensation had to be adjusted to meet our ambition of ensuring a decent living wage for our own workforce as measured through the VBA methodology. We are now working toward regular reassessments to avoid future deviations.

SR: I would like to add a third example related to our supply chain. As we proceed with integrating human rights due diligence into our supplier code of conduct and procurement processes, we increasingly notice how important it is to get not just colleagues from SAP’s procurement organization onboard, but also all other employees involved with supplier selection. All of us need to consider human rights and environmental criteria in our buying decisions. The earlier this happens, the better. The point at which contract negotiations with suppliers start may be too late.

Q: Coinciding with Human Rights Day 2023, SAP just recently updated and expanded its Global Human Rights Commitment Statement. What’s the reasoning and what’s new?

DS: When looking back at our sustainability journey that started in 2009, I remember human rights being embedded in SAP’s holistic understanding of sustainability from the beginning. It has been part of our objective to create positive economic, social, and environmental impact all along. We therefore also established our first Global Human Rights Commitment Statement in 2011.

SR: That’s right. SAP’s commitment to respect human rights is not new. But it evolved during the past years beyond our operations to also encompass our extended supply chain and product lifecycle.

In the latest update of our Global Human Rights Commitment Statement, we have expanded the description of our downstream action areas and how we aim to avoid negative impacts that can result from the use or abuse of SAP’s products and services. We added an entirely new chapter on the implementation of human rights due diligence at SAP, elaborating in detail on our procedures, including governance, risk analysis and prioritized risks, preventive measures, complaints process and remediation, monitoring and reporting, and stakeholder dialog. It makes transparent the results of our human rights due diligence project and helps us better meet the requirements by the UN GPs as well as the German Supply Chain Act.

Q: Speaking about the human rights impacts through the use of SAP solutions, where do you see the biggest risks and opportunities at the moment?

SR: As part of SAP’s downstream human rights due diligence, we have identified artificial intelligence (AI) as high impact solution area in the context of human rights. It’s also been frequently addressed as key topic throughout the recent UN Forum on Business and Human Rights in Geneva. AI is transforming our economy and society. This trend is expected to accelerate in the coming years, bringing new opportunities and challenges for society and human rights. SAP actively addresses legitimate concerns, coming up with new AI technology through SAP’s Guiding Principles for AI Ethics and dedicated due diligence governance, processes, and the SAP Global AI Ethics Policy. In addition, we have started to investigate human rights risks and mitigation measures in our upstream supply chain linked to the outsourcing of generative AI training.

DS: On the other hand, I also see the opportunity for SAP to advance human rights by developing innovative solutions that help customers embed human rights into their business and supply chain strategies. This includes our supply chain management solution that offers risk mapping based on financial as well as sustainability indicators, which also cover human rights aspects. Our human resource management solutions furthermore provide tools and features to address unconscious bias in recruitment and hiring, support inclusivity, and ensure equitable remuneration and career advancement. Finally, there is also the opportunity to leverage corporate social responsibility (CSR) programs to advance economic, societal, and cultural rights that support youth-in-need to thrive in the sustainable and digital economy. A prime example of our efforts is SAP Educate to Employ, targeting youth-in-need aged 14 to 30 with skill-building programs to bring them into jobs in the broad SAP ecosystem and beyond by linking education with employability within a sustainable and digital economy.

Q: Would you agree that, with mandatory human rights due diligence on the rise, embracing human rights in business is becoming mainstream? Against this backdrop, how is SAP doing compared to others?

DS: In my conversations with customers and peers in leading sustainability positions, compliance with human rights legislation definitely comes up as a key priority. However, I also notice that companies continue to struggle to manage their social effects. It did not really surprise me, when I read that a 2022 Economist survey revealed that companies haven’t made as much progress on social as on environmental issues, and only 36% had incorporated social impact into corporate strategy compared with 47% for environmental. This shows that we still have a way to go.

SR: Indeed! According to the International Labour Organization (ILO), 160 million children are still engaged in child labor. More than 27 million people around the world are in conditions of forced labor. And globally, 2.4 billion women of working-age are still not afforded equal economic opportunity. These are just some numbers that underline the need for more action by businesses.

The good news is that mandatory human rights due diligence helps get more companies on board and strengthen the efforts of those that already are. There is good and open exchange and mutual learning among companies. It therefore seems less of a competition in which one enterprise strives to outperform the others. You rather share experiences and gain insights where you are already doing really well and where you can further improve.

Overall, I would say that SAP has been progressing well and is on track but can still do even better. Our ambition definitely is to not limit ourselves to compliance with mandatory human rights due diligence, but to go beyond.

Q: Looking into the future, what trends and challenges do you see?

DS: I believe that the momentum for taking respect for human rights seriously in business will further increase, driven not only by legislative pressure but also increasing stakeholder expectations. It’s important, however, that we as business leaders do not get consumed by navigating the regulatory landscape and ensuring compliance. Let’s not allow this to become a check-box exercise — we must keep people in the center. The aim is to improve people’s lives.

SR: I fully agree. Some of the legislation does keep you very busy with a lot of administrative burden. This unfortunately takes away your attention and resources from ultimately making a difference for the affected people. I also see a risk that because value chains are becoming ever more complex with reliable data missing and because managing the human rights risks down to tier-n can seem so overwhelming, companies chose to prioritize de-risking. They rather pull out of high-risk countries which may actually worsen the human rights situation. The increasing complexity of geopolitical crises and need for heightened due diligence further exacerbates this risk.

As companies mature in human rights due diligence, they will need improved databases and methodologies to help them measure their actual and potential impacts on people, prioritize their efforts and assess the effectiveness of the preventive and remedial measures they put in place. We are testing some of the approaches for SAP at the moment and I am hopeful that they will help guide us toward achieving better outcomes both for people as well as for our business.

^{Christine Susanne Mueller is deputy human rights officer at SAP.}