The United Nations Guiding Principles on Business and Human Rights (UNGPs) established the first authoritative global standard for preventing and addressing adverse human rights impacts linked to business activity (UN, 2011). The UNGPs rest on three pillars: the state duty to protect human rights; the corporate responsibility to respect human rights; and access to remedy for victims of business-related abuses.
The corporate responsibility pillar, which applies to all businesses regardless of size, sector, ownership or location, requires organisations to avoid infringing on the human rights of others and to address adverse human rights impacts they cause, contribute to or are directly linked to through their operations, products or services. This responsibility includes conducting human rights due diligence: identifying, preventing, mitigating and accounting for how the organisation addresses its actual and potential adverse human rights impacts (UN, 2011).
The impact of business activity on communities takes many forms. At the most direct level, organisations affect the communities in which they operate through employment decisions, environmental practices, land use and community investment. Research on CSR and community development published in Cogent Economics & Finance (2024) found that well-implemented responsible business programmes lead to substantial improvements in social development, economic progress, environmental sustainability and ethical standards in host communities. However, the same research found that without robust policy instruments and regulatory enforcement, industrial activities can cause severe adverse effects including pollution, health damage and the erosion of community livelihoods, particularly in contexts with weak regulatory frameworks (Mamo et al., 2024).
The Corporate Human Rights Benchmark (CHRB) 2023, which assessed companies across the extractives and apparel sectors, found that while most companies are making progress towards fulfilling their responsibility to respect human rights, the pace of improvement remains too slow to deliver the change that rightsholders urgently need. In the extractive sector, a great percentage of companies scored below 20 out of 100 on human rights performance. In apparel, 62% scored below that threshold. Community-level impacts in extractive industries include displacement, environmental degradation, health risks and threats to land and resource rights. In the apparel sector, the primary community-level impacts centre on labour conditions, inadequate wages and gender equality concerns at manufacturing sites (CHRB, 2023).
Cultural impact is a distinct and significant dimension of human impact that is not always addressed within standard CSR frameworks. The UN Declaration on the Rights of Indigenous Peoples (UNDRIP), adopted by the UN General Assembly in 2007, recognises the rights of indigenous and tribal peoples to maintain, protect and develop their cultural heritage, traditional knowledge and cultural expressions (Owen et al., 2022). A core principle arising from UNDRIP is Free, Prior and Informed Consent (FPIC); the right of indigenous and tribal peoples to give or withhold consent to projects that may affect their lands, territories, resources or cultural heritage before those projects begin (IWGIA, 2024). FPIC is firmly established under international law and is increasingly reflected in corporate due diligence requirements: the EU’s Corporate Sustainability Due Diligence Directive explicitly requires companies to address actual and potential abuses of indigenous peoples’ rights as part of their human rights due diligence obligations (IWGIA, 2024).
At the level of the individual, organisations affect people through employment conditions, health and safety practices, data privacy, consumer protection and the provision of grievance mechanisms. The UNGPs establish that every business should enable access to effective remedy for individuals harmed by business-related abuses through operational-level grievance mechanisms, judicial mechanisms or non-judicial state-based mechanisms (UN, 2011).
Harvard Business Review research published in 2024 found that the most effective responsible business programmes are those that involve continuous adaptation based on local knowledge and genuine community engagement, rather than standardised approaches applied uniformly across different contexts. Organisations that treat community engagement as a two-way process, which includes listening and adapting to local conditions, achieve measurably better human impact outcomes (HBR, 2024).
For CR&S practitioners, managing human impact requires moving beyond policy commitments to genuine due diligence, stakeholder engagement and impact measurement. This means identifying which communities, cultures and individuals the organisation’s activities affect directly, indirectly and through its supply chain, assessing the nature and severity of those impacts, taking action to prevent or mitigate harm, and providing access to remedy where harm occurs. It also means understanding the international standards that define what responsible practice looks like, including the UNGPs, UNDRIP, FPIC and the specific due diligence requirements of legislation such as the UK Modern Slavery Act, the EU CSDDD and the French Duty of Vigilance Law.
Action Point
Identify one group of people (e.g. employees, supply chain workers, local community members, consumers or others) whose lives are most directly affected by your organisation’s activities. Consider both the positive impacts and any potential or actual harms. What does your organisation currently do to understand, manage and remedy its impact on this group? Share your reflection with your skills coach.