The 2018 Corporate Human Rights Benchmark: Some Successes but Ongoing Challenges in Company Efforts to Advance Human Rights

Foley Hoag LLP - Global Business and Human Rights
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On November 12, The Corporate Human Rights Benchmark (CHRB) released the results of its 2018 Corporate Human Rights Benchmark.  The 2018 Corporate Human Rights Benchmark assesses over 100 of the largest publicly traded multinational companies in the world on a set of key human rights indicators, including governance policies, remedies and grievance mechanisms, responding to serious allegations, due diligence, and transparency.

Established in 2013, The Corporate Human Rights Benchmark is a non-profit multi-stakeholder initiative that draws on expertise from seven organizations: APG Asset Management, Aviva Investors, Business and Human Rights Resource Centre, EIRIS Foundation, Institute for Human Rights and Business, Nordea Wealth Management, and VBDO.  The CHRB is also an Ally of the World Benchmarking Alliance.

The 2018 results reviewed and ranked companies from the agricultural products, apparel, and extractives industries on their corporate human rights performance against a detailed methodology, developed and revised through extensive multi-stakeholder consultation.  Following some improvements to the methodology, CHRB redrew the 2017 scores using 2018 rules, to enable meaningful comparisons to be made.

The results, based on publicly available information, are a proxy for corporate human rights performance and not an absolute measure of performance.  The CHRB notes that while there is extensive work being undertaken to understand and value respect for human rights, there are no agreed fundamental units of measurement for human rights.  As such, the CHRB stresses that the results provide a subjective assessment at a specific point in time.  In addition, the CHRB explains that the results are drawn exclusively from publicly available information from company websites, documents, and additional company input to the CHRB Disclosure Platform.  As such, some companies may have non-public information that has not been taken into account in the 2018 results.

The Benchmark is grounded in the U.N. Guiding Principles on Business and Human Rights, as well as additional human rights standards and guidance focused on specific industries and specific issues.

Ultimately, the CHRB aims to provide a comparative snapshot from year to year of the human rights performance of the largest companies on the planet, looking at their policies, processes and practices, and how companies respond when challenges and problems arise.

The 2018 CHRB reported several key findings:

  • Starbucks and Kraft Heinz are among the major multinational companies that scored poorly on human rights benchmarks.  Other low-ranking companies include Hermes International, Prada, Macy’s, Costco Wholesale, and Shoprite.  In addition, the results note poor performance by state-owned energy companies such as CNOOC, PetroChina, and Gazprom
  • The majority of clothing and agricultural companies are failing to do enough to prevent child labor
  • 40 out of 101 major extractives, agricultural, and clothing and footwear companies are failing to demonstrate respect for human rights on paper or in practice
  • In this year’s ranking, two-thirds of companies scored less than 30 percent in the overall Benchmark
  • The average score across all companies has increased since the pilot CHRB was launched in 2017, but remains low at 27 percent
  • Of the 101 companies surveyed, 40 percent failed to show any evidence of identifying or mitigating human rights issues in their supply chains, as required by the U.N. Guiding Principles
  • Companies that performed the best in the overall Benchmark include Adidas, Mark & Spencer, Unilever, Rio Tinto, and BHP Billiton

On the whole, the CHRB concludes that global businesses could improve ‘walking the talk’ by matching their paper commitments with clear, consistent action when human rights abuses or risks are identified.

The CHRB notes that many companies have reported the usefulness of the Benchmark, particularly in understanding where there are gaps in policies, systems, or disclosures.  Companies can use the data and results to take steps to address those gaps and learn from their peers.  As the results reveal, improvements by some companies clearly show that rapid change is feasible and low scoring companies could learn from and emulate this approach as part of efforts to improve their human rights compliance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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