A New Tool by Maala for Human Rights Management in Businesses in Israel
To access the tool (in Hebrew) click here<<
Managing human rights is a widely recognized expectation among stakeholders seeking to see companies identify, manage, and report on their human rights impacts as part of an overall commitment to corporate responsibility. Following the UN guidelines, corporations bear responsibility for identifying, preventing, and addressing adverse human rights impacts resulting from their activities or from the activities of their business partners. In accordance with the United Nations Guiding Principles on Business and Human Rights (UNGPs), companies have a responsibility to avoid infringing on human rights and to address adverse human rights impacts linked to their operations, products, or services. Similarly, the OECD and the European Union (including EFRAG and the CSDDD) have established that companies are required to identify, prevent, and remedy negative human rights impacts, not only within their own operations, but also across their supply chains and environmental footprint.
International rating agencies, such as MSCI, Sustainalytics, and DJSI, evaluate companies based on indicators related to human rights, including labor rights and fair employment conditions, diversity and inclusion, preventing discrimination, freedom of association, data privacy, workplace safety, and more. In recent years, a global trend has emerged toward deepening corporate responsibility in the field of human rights, alongside updates to rating methodologies and company assessments. Rating agencies, regulators, and investors are changing their approach in recognition that formal policy compliance is no longer sufficient; companies are now expected to demonstrate effective and measurable management of human rights impacts, including at the operational level and throughout the supply chain. The focus is shifting from declarations and commitments to quantitative indicators, from policy to implementation and outcomes, and from reactive responses to proactive prevention. Companies that do not implement structured human rights management processes may face lower ratings, reduced investor confidence, or limitations on global partnerships.
In Israel, there is a growing recognition of the need for human rights due diligence even among companies operating primarily in local markets, as part of the preparation for new European regulation and the expectations of customers globally. The Maala ESG Index views human rights as a central pillar in assessing corporate responsibility in Israel and integrates the topic across areas including ethics, working conditions, diversity and inclusion, and corporate governance.
This new tool offers a practical roadmap for companies seeking to embed policies and processes for managing human rights as part of responsible and transparent business conduct. It includes guiding principles for developing a human rights policy, guiding questions for conducting due diligence, examples of human rights policy documents, and additional practical resources.
The tool enables companies to build a structured overview that brings together multiple topics already reflected in the Maala ESG Index and in their corporate responsibility reporting, and to better connect them in addressing inquiries received regarding human rights.
