First Corporate Human Rights Benchmark reveals significant weaknesses in practice

Almost six years on from the announcement of the UN’s Guiding Principles on Business and Human Rights, the publication of the Corporate Human Rights Benchmark indicates that companies have a long way to go in the implementation of effective human rights programmes.

Of the 98 companies included in the benchmark, the first-ever public ranking of corporate human rights performance, only six had scores above 50 per cent and only 18 had scores over 40 per cent. The average score was just 28.7 per cent.

The benchmark ranked companies from three industries, agricultural products, apparel and extractives, for their implementation of the UN’s Guiding Principles on Business and Human Rights using 100 human rights indicators across six measurement themes, each with different weights. Companies were ranked using publicly available information that indicated how policies, governance, processes and practices in relation to human rights were managed. Companies were also ranked for transparency and how they responded to serious allegations of human rights abuses.

The benchmark shows a clear gap between the leaders and the laggards, with many companies receiving a zero score against the indicators. Companies tended to perform more strongly on policy commitments, high-level governance arrangements and the early stages of human rights due diligence. However, even here the average score out of ten for governance and policies was just 2.1.

This chimes with our experience, businesses find it much easier to make statements of commitment than to effect real change on the ground. It can be genuinely difficult to identify the real risks and mitigate them effectively, especially in those organisations with a multi-layered supply chain.

This is borne out by the benchmark which showed that even among the top performing companies, mitigating the risk of human rights abuses, tracking responses, communicating effectiveness and remediating harm was poorly managed.  Corporates should be wary of making statements about their commitment to human rights without the actions to back them up.

Engagement with stakeholders was also particularly lacking, with over half the benchmark receiving no points for such engagement. A significant 84 per cent had no framework for engaging with stakeholders and 91 per cent were not seen to be involving end-users in the development of their grievance mechanisms.

Business’ licence to operate is under more scrutiny than ever before, with society adopting a zero-tolerance approach to human rights abuses and investors taking a material interest in the impact of business operations. Creeping legislation in the UK, France, California, the EU is also placing real pressure on corporates to demonstrate how they manage their human rights impact and businesses will need to comply. To date, the response has been poor. Business’ response to the Modern Slavery Act has been criticised, with too few companies following the six requirements set out in the Government’s guidance.

GoodCorporation welcomes the Benchmark and shares the view of Mark Wilson, Group Chief Executive of Aviva, one of the companies behind the initiative, that a public measure of performance will focus board attention, leading to a desire to improve in the rankings that should drive a race to the top in terms of human rights management. To do this effectively, businesses will need to commit time and resources.

GoodCorporation has been working with corporates for over 15 years to help measure and manage the impact of the activities on all stakeholder groups. Our Human Rights Framework is based on the UN Guiding Principles, recognised as best practice guidance for responsible human rights conduct. We can help assess human rights risks and put a plan in place, evaluate and strengthen policies, measure performance against key indicators and advise on effective speak-up and grievance mechanisms. Contact us for more information.

 

Posted April 2017

 

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