A/HRC/41/49 • In general, the measurement of social impacts, and the effectiveness of efforts to address them, is significantly less developed than for other non-technical risks. In other words, the “S” of “ESG” (environmental, social and governance) risk analysis done by investors and companies currently suffers from a lack of understanding and common approaches and indicators. There is a need for better understanding of the impact of human rights policies and practices on people and on commercial strategies. At the moment, most indicators focus on management performance, but little is known about the impact of policies and processes oriented to respect for human rights. • There is a disconnect between investors and civil society, particularly groups on the ground that are at the “frontline” of addressing business-related human rights harm. • Company engagement is a very important and useful tool for investors in driving change in behaviour. However, there is a gap between the information coming from businesses and information from the people affected, conveyed through civil society organizations and stakeholders. With regard to the latter point, the challenge may not be lack of information available from civil society and human rights defenders, but rather the aforementioned “disconnect”, or a lack of platforms for exchange between the investment community and human rights campaigners on the ground. • Initiatives like Platform Living Wage Financials and Investor Alliance for Human Rights are important steps in taking a more proactive approach to measuring social issues in investment portfolios; however, more needs to be done to engage leadership at the executive level in companies and more mainstream investors to advance changes in practices. • More transparency and more accurate data are needed from companies concerning their own practices and impact measurement, as well as from investors concerning how effective their engagements are in changing corporate behaviour and conditions for rights holders. E. Role of business lawyers 64. In its report on human rights due diligence and its companion paper on business practice, the Working Group included a special focus on the role of business lawyers, citing a “reluctance or even pushback from traditionally oriented legal counsel, both in-house and external” and a “lack of integration of business and human rights into the core advisory services of corporate law firms” (A/73/163, paras. 25 (a) and 35 (b)). At the same time, it identified the great potential for business lawyers to integrate advice on human rights due diligence more widely as part of advisory services for clients, and noted that “some bar associations and large law firms … endorse the Guiding Principles and acknowledge that human rights should be a core part of the advice provided by a wise counsellor” (ibid., para. 41). The members of the Working Group also observed that there was an emerging view within the legal profession that advice on human rights risk management formed a core component of providing legal and commercial advice to businesses. This observation provided the background for a Forum session dedicated to exploring the role of business lawyers as drivers for more effective human rights due diligence by companies. The meeting was co-organized by the International Bar Association, which has published tools for lawyers on this topic.15 65. Participants in the session examined what lawyers could do in practical terms to support businesses in meeting the responsibility to respect human rights as set out in the Guiding Principles. They highlighted how lawyers’ extensive transactional and investigative experience in conducting human rights diligence could support companies, and how they could help balance the demands of the Guiding Principles and deal certainty. Participants affirmed that there was a growing awareness of a connection between business 15 IBA Practical Guide on Business and Human Rights for Business Lawyers and Handbook for Lawyers on Business and Human Rights. 15

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