August 2023

Decisions regarding whether or not to remain in a challenging operating environment, and how best to respond to a deteriorating human rights situation, are rarely, if ever, straightforward. A business enterprise will often be concerned with identifying and evaluating the various sources of risk to the enterprise. There are likely to be a host of legal and real-world issues to consider, as well as issues arising under the enterprise’s own policies or commitments. Commercial and reputational risks will also often be assessed, against the background of wider political developments and trends, operational constraints, and public or consumer pressure. While the steps needed to guard against risks to an enterprise may sometimes be the same or similar to those needed to address the risks of adverse human rights impacts, this is not always the case. Indeed, in the face of public pressure to exit a challenging context, a business enterprise’s exit may result in reputational benefits, but this may not necessarily lead to better outcomes for people on the ground. A responsible business understands this distinction and will take the latter considerations into account in decision-making.

The UNGPs are concerned with preventing and mitigating risks to people and provide business enterprises with a blueprint for responding to such risks, including through the exercise of human rights due diligence. While human rights due diligence can also help reduce risks to the enterprise (e.g., reputational, financial, and legal risks), these kinds of risks are not the focus of the UNGPs.

The purpose of this note is to provide clarification of what is expected from business enterprises under the UNGPs to meet their responsibility to respect human rights when they find themselves in challenging contexts. Such contexts present a range of dilemmas for responsible businesses, due to both the general operating context as well as the heightened risk of business involvement in human rights harms, including through business relationships...