A New Tracker for Corporate Human Rights
Global companies continue to grapple with issues of human rights across their operations, so in the spirit of creating a race to the top, some investors and non-profit organizations just launched a benchmark to help shape corporate policies and responses in this area. Based on the inaugural mark-up, any help should be welcome.
The Corporate Human Rights Benchmark, a collaborative of pension fund managers, socially-minded investors and non-profit groups, looked at 98 large companies in the agricultural products, apparel and extractive industries and scored them on 100 human rights indicators. In what the group said is “an uncomfortable finding,” all but six companies researched scored under 50% overall, and only 18 of them had scores above 40%. The average score “is a mere 28.7%,” the CHRB report said. “There is clearly no perfect company or industry in human rights terms, and no scope for complacency anywhere,” said Steve Waygood, chief responsible investment officer at Aviva Investors, in the foreword. “However, it is clear that some are trying much harder than others and we have identified clear leaders and laggards.” At the top of the heap, with scores between 60%-69%, are BHP Billiton PLC, retailer Marks & Spencer & Spencer Group PLC, and Rio Tinto Nine companies scored at the lowest rung below 10%, and they included Coal India, Sinopec, Kohl’s Corp. and Macy’s Inc.
By dividing the scoring into six themes, CHRB found that companies tend to perform better on policy commitments and governance, but they start to weaken in their responses to human rights risks and remediating harms. When it comes to engaging with communities and workers potentially affected by the risks, 56% of the companies scored zero for their commitment to such engagement and 84% had no framework for it. The benchmark is also tracking companies’ responses to serious allegations of human rights risks, and it found 41 of the 98 examined fit its definition of severity. Most of these are at the top or bottom of the performance ranking, and most of the allegations relate to work conditions at supply chain, including child and forced labor issues. “Competition is a beautiful thing when it is used to do good,” said Mark Wilson, chief executive of Aviva, in a statement. “More transparency and a desire to improve in the ranking will spark a race to the top in corporate human rights.”