On May 1, 2019, EDC launched a board-approved Human Rights Policy, which aligns with the United Nations Guiding Principles on Business and Human Rights (UNGPs) and recognizes our responsibility to respect all internationally recognized human rights, both within our organization and through our transactional relationships. Importantly, the policy also creates the conditions for thoughtful and considered decision making, in a way that accounts for impacts on people and provides direction for navigating complex issues.
The development of EDC’s policy was an opportunity to highlight the work we’ve been doing to bring a human rights lens to the due diligence we conduct on transactions. As part of the process, we conducted extensive public consultation with civil society, government and industry, and sought guidance from Shift, a non-profit organization that is the leading centre of expertise on the UNGPs.
To help facilitate our CSR and human rights journey, we’ve made some important internal changes.
This is by no means a straightforward journey. Embedding human rights into our practices will take time and we may make mistakes along the way. But our view is that as long as we are continuing to evolve, mature and learn from our peers how best to address these complex issues, we’re making important progress.
Looking ahead, 2020 will be an important year for strengthening our human rights management capacity. In our Human Rights Policy Implementation Plan, we’ve committed to defining and implementing a formalized approach to engaging stakeholders on business and human rights, developing guidelines on leverage and remedy, and continuing to increase and improve our reporting and disclosing of our human rights performance in a meaningful way.
Deliver ongoing training, education and capacity building on key elements of the Human Rights Policy
Disclose EDC’s human rights due diligence guidelines
Accomplished and ongoing
Plan the development of new sector- or issue-specific due diligence guidance on human rights matters
In progress and ahead of schedule
By 2021, report more comprehensively on our annual human rights performance
Accomplished and ongoing
Participate in and influence industry and standard-setting bodies
Where potential and/or actual severe human rights issues are identified, a thorough assessment is conducted by EDC experts to examine country risk, the company’s track record and management capacity, the product being exported, and potential impacts on vulnerable peoples. This allows us to assess the level of risk and whether any mitigation measures are required to determine if we should support or decline a transaction. To determine if an assessment is required, the ESRM team conducts a screening to identify the risks related to a transaction. The ESRM team conducted 226 human rights risk screenings in 2019(1). These are a critical part of the overall risk assessment process and decision making, which may result in declining certain transactions or approving them with certain requirements to manage those risks where required.
(1) The ESRM team conducted 226 human rights risk screenings in 2019.
Grievance mechanisms are essential for ensuring that a company’s stakeholders, including community members, have a channel to raise complaints or concerns. When a high likelihood of potential and/or actual severe human rights impacts are identified, EDC assesses the effectiveness of a company’s stakeholder engagement program and grievance mechanisms as described in the UNGPs.
We believe it’s essential for companies to strive to prevent issues by engaging proactively with affected stakeholders. Shortcomings in a company’s stakeholder engagement program and grievance mechanisms may trigger the need for additional due diligence and dialogue, as well as the inclusion of time-bound commitments in our customer agreements.
The spring 2019 meeting of our CSR Advisory Council was devoted to discussing the use of leverage in the context of the UNGPs, and the role of financial institutions. John Morrison, CEO of the Institute for Human Rights and Business, spoke on expectations, scope and the limitations of using leverage.
Following this, the Council discussed important issues faced by EDC’s stakeholders, as well as principles to guide decision making on how an export credit agency can use leverage to support human rights. The Council arrived at the following aspirational statement: “EDC will accelerate respect for human rights internationally through leveraging its resources and stakeholder relationships – and in particular its relationships with Canadian businesses – in order to advance the positive impacts of Canadian businesses abroad.”