This resource walks readers through how a company can systematically and strategically influence the behavior of others, including in its value chain, when seeking to prevent or address human rights risks.
November 2013 | Shift | Pages: 24
What is leverage? It is a company’s ability to influence the behavior of others.
The concept of leverage plays a key role for companies in meeting the corporate responsibility to respect human rights. The Commentary to Guiding Principle 19 states that leverage is considered to exist where the company ha the ability to effect change in the wrongful practice of an entity that causes harm
Leverage gets to the heart of what companies can realistically be expected to do in practice when faced with human rights challenges. Even when companies have a dominant or influential commercial position in a business relationship, there are many questions about how to identify and exercise the most effective forms of leverage. At the same time, every company — regardless of size, industry or geography — faces situations in which it does not have, or does not perceive, sufficient leverage to influence the behavior or others. This raises questions about what steps can be taken to create or increase leverage; what steps could have been taken earlier in the relationship to have created leverage; and when and how to consider terminating a business relationship.
Companies can ask themselves three questions when they are seeking to build and exercise leverage over an entity:
1. Over Whom?
What types of business relationships may a company have that would connect it to potential human rights harms? Very often, those types of relationships may be:
For specific examples of ways to exercise leverage over these groups, see page 17 of the resource.
Once a company identifies who it is trying to influence, it can try to systematize its approach for exercise leverage by examining five categories of leverage.
For more detail on types of leverage with examples, see page 14 in the resource. The Annex contains multiple examples of how companies have used these different types of leverage with suppliers, governments, joint venture partners and others.
3. For What Purpose?
Leverage is about creating the opportunity to change how people think and behave. In the context of the Guiding Principles, it is about changing the thinking and behavior of key people within a supplier, contractor, business partner, customer, client or government, where their organization’s actions are increasing risks to human rights.
The purposes of using leverage may range from obliging another entity to address the issue, to engaging another entity to discuss the issue, to persuading another entity to address the issue.
Companies may find it helpful to identify moments of traction, where there is a particular opportunity to exercise leverage. These moments may include:
In practice, real behavioral change may happen more often through persuasion than through obligation.
The art of persuasion has been studied in the field of dispute resolution, including by Dr. Robert Cialdini, who developed six principles of persuasion based on basic human instincts. These are:
See this video to hear Dr. Cialdini explaining these six principles.