Corporate transparency ‘critical’ across supply chains in conflict zones: GRI

Corporate transparency is “critical” during conflicts and wars amid growing expectations over conflict-sensitive due diligence, according to the Global Reporting Initiative (GRI).

In a policy paper, the GRI says businesses increasingly need to be transparent about their activities and supply chains in regions at risk of conflict or war.

But Peter Paul van de Wijs, chief policy officer at the GRI, said “there is no ‘one-size-fits-all’ approach”.

“Each company will have specific impacts to consider related to the nature of the conflict, their business model and presence of staff in the conflict area,” he said.

“Through stakeholder engagement and a comprehensive assessment of what’s relevant in a conflict, the GRI Standards enable organisations to understand their impact, which is the starting point for a well-considered response strategy. Transparency brings accountability; it’s what turns the guidelines on due diligence into powerful tools that facilitate action,” he added.

Setting out new advice for companies, in line with intergovernmental guidelines from the UN and OECD, GRI listed five essential pointers for corporate due diligence during conflict:

• Due diligence requires continuous communication: Companies need to regularly monitor changes to risks and impacts – from the conflict itself, and through their activities and operations. Maintaining close contact with key stakeholders – such as staff, business partners and local communities – is essential.
• Actions depend on the nature of the company and the conflict: Conflicts can emerge or change dynamically and businesses need to be ready to reassess decisions on mitigating measures. For example, national conflicts can spread internationally, or areas of operations might switch from government control to armed non-state groups. That means risk assessment, including human rights due diligence, is not a one-off exercise.
• Information is needed from multiple external sources: The ability to carry out full, conflict-sensitive risk and impact assessments may be challenging or impossible. Input from civil society actors, such as NGOs or human rights defenders, helps build a picture of the reality on the ground, while highlighting information gaps that need to be addressed.
• Recognition that tough decisions can be required: A company may face contrasting demands from different stakeholder groups – such as employees, communities and consumers. For example, how a business balances the international reputational damage associated with their presence in an area of conflict with their responsibilities locally towards those who rely on their goods, services or employment.
• Exiting a conflict-affected area brings obligations: Reaching a decision to cease operations needs risk assessment that involves and engages employees, local communities and human rights defenders. For example, identifying steps to ensure local staff receive income for the duration of the crisis, or capacity-building to mitigate the loss of employment.

Andrea Pradilla, director of GRI Latin America, said: “When you are working in a conflict, or you’re trying to build peace, it’s essential to create wide-ranging, multi-stakeholder partnerships. That takes time and commitment, but it’s the only way forward.”

Drawing on her experience of working in Colombia, Pradilla added that companies operating in the country “began to see GRI reporting as about more than just ‘a report’”.

“It became a way to communicate with stakeholders and tell the story of how they were navigating this complex context. Reports stopped being a monologue and became a dialogue,” she said.