4 questions for…

Carsten: Forced and child labor remain challenging across various industries. Companies are increasingly mandated to implement due diligence processes to prevent them in their supply chains. Examples outside Germany include the Modern Slavery Acts in the UK and Australia and the Child Labour Due Diligence Law in the Netherlands. Ensuring workers receive fair compensation and work in safe environments remains a major concern, with legislation pushing for more transparency and improvements in labor practices.

Human rights and environmental sustainability are increasingly interconnected in legislative agendas. The impact of climate change, pollution, and resource depletion on communities is receiving heightened attention. Access to healthcare is an emerging area of concern, not least because the Covid-19 pandemic shone a light on healthcare disparities. Legislative efforts might highlight companies’ responsibilities to contribute to the health and wellbeing of employees and communities. Finally, with social movements gaining global momentum, discrimination based on gender, race, sexual orientation, and other factors is gaining prominence.

Evolving human rights legislation and litigation presents a dynamic challenge for businesses. We are witnessing a global trend towards bolstering regulations governing human rights in business operations, with a focus on ratified International Labor Standards, as established by the International Labor Organization. The German Supply Chain Act stands out as one of the more comprehensive legislations addressing these concerns.

Carsten: Businesses need to extend due diligence beyond supplier relationships to include their own practices. Fair treatment of employees and scrutinizing the practices of suppliers and sub-suppliers are equally important. The following elements are central to human rights governance:

• Implementation must be driven by senior management’s commitment to respecting human rights.
• Develop a human rights policy in line with international standards, such as the UN Guiding Principles on Business and Human Rights, tailored to the company’s specific risks.
• Create a due diligence process to identify, prevent, and mitigate for human rights risks across the company’s operations and supply chains.
• Assess and manage human rights risks with regular assessments of suppliers and the company’s own operations as well as with audits and monitoring activities.
• Provide regular training to ensure employees understand their responsibilities related to human rights.
• Establish grievance mechanisms to allow stakeholders, including employees, suppliers, and communities, to raise human rights concerns and seek remedies.
• Monitor and report on the human rights strategy, keeping internal and external stakeholders informed.
• Continuously improve human rights policies, processes, and practices based on feedback, lessons learned and new developments.

Carsten: Allianz Group has a long-standing commitment to human rights, which predates the legal requirements outlined in the German Supply Chain Act. Since joining the UN Global Compact (UNGC) in 2002, Allianz has aligned its business activities with the Global Compact’s 10 principles pertaining to human rights, labor, the environment, and anti-corruption. Our ongoing commitment to improving our human rights due diligence processes is shared in an annual Communication on Progress on the UNGC website.

With the enactment of the German Supply Chain Act, Allianz Commercial’s self-commitment has turned into a legal obligation, requiring comprehensive compliance and reporting globally.

To fully comply with the German Supply Chain Act, we are conducting deeper risk analyses within our own operations while meticulously vetting our suppliers. The appointment of an Allianz Commercial Human Rights Officer last year underscores the dedication to this cause.

Allianz Commercial’s commitment is twofold: to prevent any contribution to human rights abuses and to actively address any adverse impacts related to our operations and supply chain. 

Guided by international standards such as the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, we are focused on protecting rights mentioned in the International Bill of Human Rights and the core International Labour Organization Conventions.

This article is taken from the latest edition of Allianz Commercial's biannual client publication, Global Risk Dialogue, which features a number of insights on risk management and insurance topics around the world.