As global business becomes increasingly people-centric, human rights have become a key part of ESG strategies and corporate governance. Allegations of labor exploitation, child labor, discrimination, or unsafe working conditions can destroy a company’s reputation in a short time. This is why the UNGPs – the United Nations Guiding Principles on Business and Human Rights – are the most widely adopted framework globally. With clarity, practicality, and accountability, the UNGPs help businesses protect people, reduce legal risks, and improve sustainability in their supply chains.
What is UNGP?
UNGP (UN Guiding Principles on Business and Human Rights) is a set of principles issued by the United Nations in 2011 to guide countries and businesses to ensure human rights in all business activities. This is the most widely recognized set of principles in the world on the relationship between business and human rights.
The UNGPs are not binding law, but are seen as a global standard for corporate human rights. Multinational companies, financial institutions, investment funds, non-profit organizations, and governments rely on the UNGPs to develop policies, assess risks, and operate supply chains.
Goals of the UNGP
The UNGP helps address the core question:
“What should businesses do to avoid causing or contributing to human rights violations?”. The principles provide a framework of reference that includes:
- The role of the state in protecting human rights.
- Corporate responsibility to respect human rights.
- The need to provide redress mechanisms for victims when rights are violated.
The UNGPs have become the basis for modern regulations such as the German Supply Chain Law (LkSG), the EU Corporate Sustainability Reporting Directive (CSRD) or human rights requirements in international ESG standards.
Structure of the UNGP: Three main pillars
The UNGPs are built on three pillars. Each pillar reflects the roles and responsibilities of each party in the socio-economic system.
1. The State has the responsibility to protect human rights (Protect)
This pillar emphasizes that the State must develop, monitor and enforce laws to protect individuals from human rights violations committed by businesses. This includes:
- Building labor, safety and occupational health laws;
- Prevent exploitation and discrimination;
- Create a legal mechanism to handle violating businesses;
- Promote human rights standards in public procurement or trade agreements.
This is the foundation for creating a healthy and fair business environment.
2. Businesses have a responsibility to respect human rights (Respect)
Businesses must not only comply with the law, but also proactively ensure that their operations – and supply chains – do not violate human rights. This pillar emphasizes:
- Identify and assess human rights risks;
- Develop internal human rights policies;
- Conduct human rights due diligence;
- Require suppliers to comply with minimum human rights standards;
- Transparency in ESG reporting and disclosure.
In the context of strong ESG development, this is an important part for businesses to build reputation and attract investors.
3. Victims have the right to access Remedy
When violations occur, victims must have access to effective remedies. The UNGPs recommend mechanisms for:
- Judiciary (courts, investigative agencies),
- Non-judicial (internal corporate complaint mechanism, mediation center),
- Multi-stakeholder initiatives.
The goal is to restore rights to victims and ensure businesses are held accountable for repairing the damage.
The role of the UNGPs in the context of ESG and global supply chains
The role of UNGPs in the context of ESG and global supply chains is very important. UNGPs are not only a set of ethical principles but also an effective risk management tool. Many large corporations such as Apple, Nike, Ikea or Nestlé use UNGPs to control risks in the supply chain, ensuring there is no forced labor or child exploitation. In the context of ESG, UNGPs contribute to the “S” pillar – Social, helping businesses demonstrate responsibility for labor rights, occupational health and safety, gender equality, the rights of migrant workers and communities affected by project activities. In particular, international investment funds often consider UNGPs as a criterion to assess the level of social risk of businesses before making financial decisions.
How does the UNGP apply to businesses?
Although not legally binding, many countries and markets have “legislated” the content of the UNGP in various forms. Businesses wishing to comply with the UNGP often follow these steps:
1. Building human rights policies
Enterprises should issue a Human Rights Policy Statement demonstrating their commitment to the UNGPs. This document should be approved by senior management and widely communicated internally and to relevant partners.
2. Conduct Human Rights Due Diligence
This is at the core of the UNGPs. Businesses need to identify potential human rights risks in their operations and supply chains, and then assess the severity and likelihood of each risk. This is followed by the development of appropriate mitigation measures, implementation, and ongoing monitoring. Regular updates and dialogue with stakeholders—including workers, local community representatives, and suppliers—are essential to ensure transparency and accountability.
3. Supplier management and supervision
Companies should develop a Supplier Code of Conduct based on the UNGPs. This sets out minimum human rights standards that suppliers must adhere to. Compliance monitoring is particularly important in high-risk human rights sectors such as textiles, electronics manufacturing, agriculture, fisheries and construction.
4. Establish an effective complaints mechanism
Companies should develop accessible, safe, and non-retaliatory channels for receiving feedback. These may include hotlines, dedicated emails, anonymous complaint platforms, or in-factory suggestion boxes. These mechanisms are important evidence of a company’s commitment and accountability to the UNGPs.
5. Reporting and information disclosure
Companies can integrate the UNGPs into their ESG reports, sustainability reports or annual reports. Human rights reporting is often based on a number of globally popular standards, such as GRI (human rights indicators), SASB (Social section of industry reporting), ISSB S1 (disclosure of material risks related to people) or the OECD Due Diligence Guidance. Incorporating the UNGPs into these standards helps companies raise their disclosure levels and increase the credibility of their reports.
What benefits does UNGP bring to businesses?
UNGPs bring many practical benefits to businesses. Not only does it help businesses comply with international requirements, it also creates long-term business value. Applying UNGPs helps reduce legal risks when businesses participate in markets such as the EU, the US or Japan. At the same time, it improves relations with investors, as human rights responsibility is increasingly becoming an important criterion in ESG assessment. UNGPs also enhance brand reputation, especially for businesses in the consumer and export industries. In addition, applying this principle helps attract workers thanks to a safe and humane working environment, while increasing operational efficiency by minimizing labor conflicts, strikes or compliance risks. More importantly, UNGPs guide businesses to develop in a sustainable direction, ensuring that people are not sacrificed in exchange for economic growth.
The UNGPs are a set of core principles that help States and businesses protect human rights in the modern business context. With three pillars of “Protect – Respect – Remediate”, the UNGPs have become the global standard for managing human rights risks in businesses and supply chains.
In an era where ESG has become a market imperative, adopting UNGPs is not only an ethical responsibility but also a wise business strategy. Enterprises that adopt UNGPs early will find it easier to compete in the international market and build a sustainable brand image in the eyes of investors, customers and society.