Report: More than half of corporates not meeting 'basic requirements' on human rights
A study of 200 of the world's biggest apparel, food & drink, tech manufacture and material extraction firms have found that less than half are able to show they are meeting the UN's Guiding Principles on Human Rights.
Conducted by UK-based non-profit Corporate Human Rights Benchmark (CHRB), the study assesses how corporations in these sectors are performing across 100 human-rights-related indicators, using publicly available information on issues such as forced labour and wages. The resulting findings are then translated into a percentage score.
Of the 200 corporations assessed, 100 have been assessed since the CHRB’s inception in 2016 and 100 have been added for this year.
While praising the original 100 firms for increasing their average score from 18% to 32% over the past 12 months, the report states that the average score of 17% among the new cohort is “very concerning”. Moreover, when the 200 firms are analysed as a whole, one in four received a score of 10% or less and one in two failed to meet any of the UN’s five basic criteria for human rights.
Companies to have scored poorly in their respective sectors include coffee chain Starbucks, energy drink brand Monster, US-based fashion giant Ross Stores and retail giant Costco. On the other hand, Adidas, Unilever and Marks & Spencer (M&S), Rio Tinto and HP all achieved scores of 70% or higher, making them the “leaders” in their respective sectors.
Taking all of the trends documented into the report into account, the CHRB has concluded that stakeholder pressure – particularly from investors and consumers – has prompted many corporates to change their approach to human rights. Indeed, the likes of Eni, Diageo, Repsol, Danone, Heineken, Fast Retailing, Kellogg, Inditex and Pepsico have all improved their percentage scores by 10% or more on a year-by-year basis.
But the organisation believes “further and greater” pressure, coupled with benchmarking, will be needed to create change among the “significant proportion” of laggard corporates that are yet to have “taken part in the race”.
CHRB’s chair Steve Waygood said: “The annual improvements for most companies, the static nature of some companies and the very low average score of new companies points to two conclusions: Firstly, public benchmarking of corporate human rights performance has a clear place in driving positive changes in corporate behaviour and should be continued.
“Secondly, when companies are not motivated to move out of the lowest scoring bands then the limitations of benchmarks should be acknowledged, and the evidence should be used to support more robust interventions.
“For this reason, the CHRB is calling for a rapid acceleration in the uptake of human rights due diligence and for companies, governments and investors to ensure respect for human rights is not optional.”
Supply chain challenges
The report comes at a time when the UN estimates that 40.3 million people globally are living in slavery, with three-quarters “hidden” in global supply chains. CHRB assesses businesses within the apparel, food & drink, tech manufacture and material extraction sectors as supply chain workers in these industries are widely regarded to be at high risk of human rights failures.
The good news is that, amid increased media attention on the social and environmental impacts of supply chain practices, investors and consumers are putting more pressure on firms in these sectors to disclose human rights information and to implement ambitious targets and frameworks in this area.
As a result, CDP has recorded an eight-fold increase in corporates asking their suppliers for sustainability data since 2008 and businesses have begun to adopt a more collaborate approach to human rights in supply chains. A coalition of the UK's largest fashion retailers, including John Lewis and M&S, for example, recently partnered with the Gangmasters and Labour Abuse Authority and UK Government’s Modern Slavery Taskforce to help reduce forced labour risks in the sector. Similarly, C&A's charitable arm, the C&A Foundation, has co-developed an open-source digital map helping fashion firms to improve transparency.
To mark the anniversary of the Moderns Slavery Act, edie recently published a blog co-authored by Dr. Joy Murray, Senior Research Fellow, Integrated Sustainability Analysis at the University of Sydney; Dr. Arunima Malik, Lecturer in Sustainability, ISA, School of Physics and the Sydney Business School; and Dr. Darian McBain Global Director of Corporate Affairs and Sustainability at Thai Union Group. You can read that piece in full here.