The Interfaith Center on Corporate Responsibility (ICCR) and the Responsible Contracting Project (RCP) have released Investor Guidance on Responsible Contracting, outlining the critical role of commercial contracts in supporting robust human rights and environmental due diligence (HREDD) processes. More than ever, investors are actively seeking to understand and mitigate the risks related to a company’s HRE performance to make sound investment and divestment decisions, the ICCR said. The new guidance provides them with multiple tools to engage their portfolio companies on the principles of responsible contracting to improve both HRE and financial performance, while aligning with evolving legal requirements. It draws on RCP’s core principles of responsible contracting and the toolkit – which outlines a shared responsibility model between buyers and suppliers for upholding HREDD processes – as well as decades of engagements between the ICCR and its members to push companies to develop equitable global supply chains that do not rely on forced labour. “Faith- and values-based investors, including ICCR members, see a commitment to positive HRE performance as a key metric in their investment decisions,” said Chavi Keeney Nana, Director of Equitable Global Supply Chains at the ICCR. “We hope this guidance will serve as a resource for investors to push companies to draft into contractual language the commitments they make in their sustainability reports.” The ICCR said the responsible contracting principles discussed in the document would help companies align their contracts with the UN Guiding Principles for Business and Human Rights (UNGPs), the Organisation for Economic Cooperation and Development’s (OECD) Guidelines for Multinational Enterprises on Responsible Business Conduct, and the Due Diligence Guidance for Responsible Business Conduct. “Commercial contracts are frequently overlooked as tools for effecting change in global supply chains, and yet they are powerful legal instruments that companies can use to implement human rights and environmental policies and standards across their supply chains – even in the absence of national law,” said Said Sarah Dadush, Director of the RCP.
