What SMEs need to know

Human rights are relevant to all companies, including small- and medium-sized enterprises (SMEs). Respecting human rights is a global standard of expected conduct wherever you do business. In recent years, pressure has increased on companies to ensure they manage human rights across their operations and supply chains. Discover why respecting human rights isn’t just the right thing to do—it adds great value to your business.  

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What are human rights?

Human rights are everyone’s basic rights and freedoms. In a business context, examples include the right to:

  • Be treated with dignity, respect and fairness 
  • Work and do business in a safe and healthy environment 
  • Be free from discrimination and harassment
  • Be protected from forced labour, child labour and trafficking 
  • Fair compensation and equal pay for equal work 
  • Be free to voice ideas and complaints openly  

                       

                       

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How do human rights apply to your business?

The activities of your business, as well as your suppliers and partners, can affect people and their human rights in both good and potentially negative ways. Positive impacts can include providing decent working conditions. Negative impacts can include instances of discrimination against employees, for example, by race, gender or sexuality.  


Your company has a responsibility to respect the human rights of people you impact directly and indirectly, including your employees, customers, suppliers and community members. Depending on where you do business, you may be subject to human rights obligations on three different levels: 

Canada

Applicable federal, provincial and municipal laws and regulations.

Other countries of business

Applicable human rights, laws and regulations in other countries where you do, or plan to do business.

International guidelines

The most relevant standard for SMEs is the United Nations Guiding Principles of Business and Human Rights. Released in 2011, it formalized the responsibility of all companies to respect human rights.

The responsibility of business enterprises to respect human rights applies to all enterprises regardless of their size, sector, operational context, ownership and structure.

United Nations Guiding Principles for Business and Human Rights

                       

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How do human rights affect Canadian exporters?

                       

Increasing global regulation and standards

There are a growing number of international guidelines and standards around human rights. Also, more governments are introducing or strengthening human rights laws. Many of these require proof of a company’s efforts to uphold human rights, especially in incidents of human rights abuses. Exporters must align their practices with these tougher requirements. 

Higher risk exposure

SMEs that operate in particular countries and industries can be exposed to  human rights risks. These risks include possible child or forced labour and violations of labour rights such as appropriate working hours and wages in sectors, like apparel, footwear and textiles, and manufacturing. In some industries, the majority of workers are women who may be more vulnerable to gender-based inequalities and risks. 

Partnering with EDC

Export Development Canada (EDC) expects our customers to meet their responsibility to respect human rights, in a manner that’s appropriate to the size, nature and context of their operations, as well as the risks to which they’re exposed. For transactions with higher risks of negative impacts on people, EDC will engage with our customers and conduct human rights due diligence and when required, monitor the human rights performance of our customers. 

                       

The Business Case > Benefits and opportunities for your company 
 

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Reduces risk

Robust human rights practices can reduce business risks. Human rights complaints or abuses can be damaging to your company, resulting in legal actions, regulatory measures, financial costs, negative media attention, loss of revenue, and more. Human rights abuses can also have serious consequences on people—from your employees to those living in local communities where you operate. 
 

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Increases trust and attracts customers

A good human rights record is simply good business. It can enrich your company’s brand and reputation. It can help you build trust with employees, customers and other stakeholders. And it can help you earn new customers and deepen relationships with existing ones. 
 

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Opens access to capital

Many financial institutions and credit agencies like EDC are paying more attention to a company’s human rights performance before financing or investing in them. In the absence of key human rights practices, your business may not qualify for credit funding and other financing opportunities.
 

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Improves community relations

The world is seeing a new landscape of company-community relations. With the rise of social media, local communities that may be adversely impacted by a business are being more proactive to ensure companies respect human rights, engage communities in dialogue and support local development. Businesses that do so are rewarded with strong community relationships and continued business.
 

                       

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What you can do

In Canada, SMEs operate under various human rights laws and manage human rights issues often without realizing it. But more is expected of employers today, here and in the global marketplace, with calls to step up due diligence on human rights.  

If you’re already operating internationally, or plan to, we encourage you to take steps to ensure your company addresses the full range of human rights it could impact. Identify all human rights relevant to your activities—not just your own workforce, but also your business relationships and the communities where you operate. Then put the right policies and safeguards in place to uphold those rights. 

Whether you’re just getting started or building on existing efforts, having good human rights practices can position your business for long-term success. 

Questions to consider

  • Has your company made a clear commitment to uphold human rights? 
  • Do you have procedures to identify, prevent, mitigate and account for your human rights impacts? 
  • Have you educated your staff and suppliers on the company’s human rights commitments and what it means for them? 
  • Do you have processes to receive feedback and complaints from employees, customers and other stakeholders?  

                       

                       

Take action

Use EDC’s Human Rights Checklist of essential steps SMEs can take to advance their human rights efforts.

For more resources

Review the UN Guiding Principles on Business and Human Rights

                       


Also in this series

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Date modified: 2023-11-23