The World Benchmarking Alliance’s new Corporate Human Rights Benchmark shows that corporate action on human rights has significantly improved in the past five years, with Board-level responsibility proving essential to driving progress. Out of companies that improved the most on human rights due diligence, 75% have a process in place at board level to address human rights issues. Conversely, 70% of companies that score zero on human rights due diligence do not. The research assessed the policies, processes and practices of 127 companies spanning food and agriculture products, ICT and automotive manufacturing sectors. Companies analysed included Unilever, PepsiCo, Coca-Cola Company, Marks & Spencer, Ford Motor Company, BMW, Amazon, Samsung, Sony and Microsoft.
This is the fifth iteration of the benchmark since 2017– and there are clear signs that holding companies to account on human rights is driving faster progress. Since first being included in the benchmark, 66% of food and agricultural products companies, 65% of ICT companies, and 57% of automotive companies have improved their scores.
More companies are making human rights commitments than five years ago, taking steps towards a human rights due diligence process, and establishing grievance mechanisms for workers. However, huge gaps remain, with 36% of all companies scoring zero on human rights due diligence.
To tackle this, the World Benchmarking Alliance is calling for mandatory legislation to force the companies who are lagging behind to act.
In 2011, the UN Guiding Principles established businesses’ responsibility and defined their duties to ensure that human rights are respected in their operations and supply chains. While this has set an important baseline for action, further regulation is required to mandate corporate action on human rights where voluntary efforts are proving insufficient.
Some regions have promising legislation in the pipeline. The EU Corporate Sustainability Due Diligence Directive is a potential game-changer in bringing human rights due diligence to the fore. In addition, the EU is considering a law prohibiting the sale of goods linked to forced labour. In another positive step, Japan has committed to develop legislation on human rights due diligence.
Namit Agarwal, World Benchmarking Alliance’s Social Transformation Lead, said: “This benchmark shows that while some companies have made human rights a priority, driving important progress, others are severely lacking and moving very slowly. A decade after the UN Guiding Principles were established, their impact on the ground is very limited. It is high time that companies take serious actions to implement their commitments. With the right legislation, governments around the world can ensure effective corporate respect for human rights. Legislation levels the playing field in areas where voluntary efforts are failing—such as meaningful stakeholder engagement and human rights due diligence. As part of this, we need to harmonise approaches across countries, helping to put in place internationally aligned and stringent legislation.”
This year’s benchmark uses a revised methodology, with greater emphasis on assessing company performance on the implementation of their policy and commitments. Companies including Corning and General Motors have significantly stepped-up after comparatively poor performance in previous years. Corning is an American multinational technology company specialising in materials for ICT products, such as gorilla glass used in handheld devices like mobile phones. It is one of the companies that has improved the most, jumping from 19th place in the ICT sector in the 2019 CHRB to 2nd in the sector in the 2022 iteration.
The top five scoring companies in the benchmark are:
- Unilever – The multinational consumer goods company performed best of all companies for its governance and policy commitments, embedding respect and human rights due diligence, and company human rights practices.
- Wilmar International – The Singapore-based food processing and investment holding company performed best in remedies and grievance mechanisms. It also performed well across governance and policy commitments.
- PepsiCo – The American multinational food, snack, and beverage corporation performed well on its governance and policy commitments, and for embedding respect and human rights due diligence.
- Hewlett Packard Enterprise – The American multinational information technology company was the top-scoring ICT company, performing well on its governance and policy commitments.
- Coles Group – The Australian public company, operating several retail chains, performed well on its response to serious allegations.
The research shows that all benchmarked companies need to do more to translate commitments to stakeholder engagement into action. In the 2020 benchmark, 66% of companies committed to engaging with stakeholders on human rights. Yet this year, 71% of companies scored zero on their approach to regularly engaging with stakeholders.
Too many companies are taking a hands-off approach to human rights in their supply chains. While many businesses do state expectations of suppliers, the vast majority fail to follow through by supporting them and monitoring progress. When it comes to risks such as child labour, land rights, women’s rights and living wages, 33% of companies include such issues in supplier codes of conduct and contractual agreement. However, just 2% assess how many people are affected in supply chains.
There are clear signs that benchmarking works, with sectors who have been assessed for longer performing better. Food and agricultural products companies were assessed for the fifth time, ICT manufacturing companies for the third time, and automotive manufacturing companies for the second time. The food and agriculture products sector received the highest average score for every measurement area – with the sector featuring in six of the top 10 companies. Though despite its relatively good performance, more than half of the companies in the food and agriculture products sector still score below 20% overall.
The automotive sector received the lowest maximum score (39%) and average score (10.7%) overall, as well as the lowest average score for every measurement area.