A/HRC/14/27 what is unique to human rights, the “protect, respect and remedy” framework lays out the basic parameters of human rights due diligence. Because the process is a means for companies to address their responsibility to respect human rights, it must go beyond simply identifying and managing material risks to the company itself to include the risks a company’s activities and associated relationships may pose to the rights of affected individuals and communities. 82. But one size does not fit all in a world of 80,000 transnational corporations, 10 times as many subsidiaries and countless national firms, many of which are small- and mediumsized enterprises. The Special Representative’s aim is to provide companies with universally applicable guiding principles for meeting their responsibility to respect human rights, recognizing that the complexity of tools and processes companies employ, will necessarily vary with circumstances. 83. Considered in that spirit, human rights due diligence comprises four components: a statement of policy articulating the company’s commitment to respect human rights; periodic assessment of actual and potential human rights impacts of company activities and relationships; integrating these commitments and assessments into internal control and oversight systems; and tracking and reporting performance. Company-level grievance mechanisms perform two functions: under the tracking and reporting component of due diligence, they provide the company with feedback that helps identify risks and avoid escalation of disputes; they can also provide remedy, as discussed in section IV. Each of these components is essential. Without them, a company cannot know and show that it is meeting its responsibility to respect rights. 84. Merely having a set of components in place, however, is no guarantee that the system will work. Accordingly, the Special Representative is also developing guidance points for their implementation. One example is that companies must understand that the responsibility to respect human rights is not a one-time transactional activity, but is ongoing and dynamic. Another is for companies to accept that, because human rights concern affected individuals and communities, managing human rights risks needs to involve meaningful engagement and dialogue with them. A third is that, because a main purpose of human rights due diligence is enabling companies to demonstrate that they respect rights, a measure of transparency and accessibility to stakeholders will be required. The Special Representative’s online consultation is exploring how to elaborate these components and processes. 85. This discussion of due diligence concludes with two provisos. One might be described as “the dilemma of normalization”. Making human rights a standard part of enterprise risk management should reduce the incidence of corporate-related human rights harm. However, it could also give companies a false sense of security that they are respecting rights if they lose sight of what makes rights unique. Human rights risk management differs from commercial, technical and even political risk management in that it involves rights-holders. Therefore, it is an inherently dialogical process that involves engagement and communication, not simply calculating probabilities. 86. The second proviso concerns the limits on what companies should expect to gain from human rights due diligence in legal terms. Conducting due diligence enables companies to identify and prevent adverse human rights impacts. Doing so also should provide corporate boards with strong protection against mismanagement claims by shareholders. In Alien Tort Statute and similar suits, proof that the company took every reasonable step to avoid involvement in the alleged violation can only count in its favour. However, the Special Representative would not support proposals that conducting human GE.10-12629 17