A group of investors, an NGO, a think tank and an investor research agency, today announce the launch of the first wide-scale project to rank companies on their human rights performance. A total of 500 of the top global companies from four key sectors – Agriculture, ICT, Apparel, and Extractives – will initially be researched and ranked.
The Corporate Human Rights Benchmark (CHRB) will harness the competitive nature of the markets to drive better human rights performance, namely through developing a transparent, publicly available and credible benchmark.
Investors, companies, governments and consumers are increasingly aware of the impacts of business on human rights. Two years after the Tazreen factory fire and one year after Rana Plaza, the Bangladesh Accord has driven industry transparency, publically reporting on factory inspections; this year, Coca-Cola and Pepsi committed to zero tolerance policies on land grabs; the EU is soon to restrict exports on spyware surveillance technologies due to human rights concerns; and US conflict mineral legislation has led to a 65 percent drop in armed groups’ profits from the trade.
Public transparency, combined with public rankings of companies’ performance, is proving a powerful tool in driving a ‘race to the top’. The Access to Medicine Index has brought advances in the pharmaceutical industry’s approach to providing and pricing medicines for poor people suffering from diseases from HIV/AIDS to tuberculosis. Oxfam’s Behind the Brands has created competition between 10 food and beverage giants to eliminate land grabs, enhance the status of women in their supply chains, and reduce carbon emissions.
Steve Waygood of Aviva Investors said: “Our Benchmark will introduce a positive competitive environment as companies try to race to the top of the annual ranking. It will also shine a light on those where performance needs to improve. It took more than 60 years from the signing of the Universal Declaration of Human Rights before the UN Guiding Principles on Business and Human Rights were developed. We believe that within six years of their approval, we can help to make these Guiding Principles routine corporate practice through the development and use of the Benchmark.”
Phil Bloomer of Business and Human Rights Resource Centre said: “Our ranking will reward good practice by companies, and create a major incentive for poor performers to improve rapidly. The ranking will be a tool for campaigners, trade unions, investors and governments to encourage and press companies to deliver respect, dignity and essential freedoms to their workers, neighbouring communities, and the societies in which they invest.”
“The process of benchmarking and then ranking companies on their commitment and performance will reinforce the inescapable proposition that companies in all industries must respect human rights,” said Bennett Freeman of Calvert Investments. “Moreover, as investors become increasingly aware of human rights-related risk across sectors and asset classes, this framework will be a critical due diligence tool for evaluating how companies are managing those risks” Freeman said.
Peter Webster of EIRIS said: “We are delighted to make our long-standing experience of creating ratings, and the criteria on which they are built, available to this project. Our clients and other responsible investors are raising a growing number of human rights issues with companies, and by taking data out from behind a pay wall this project has the potential for much greater impact.”
John Morrison of the Institute for Human Rights and Business said: “The Corporate Human Rights Benchmark will be the first publicly available ranking of corporate policies, processes and performance on human rights. It will seek to assess the reality behind companies’ public commitments, including what they do to address negative impacts when things go wrong, and what kinds of collaborations they undertake to scale their resources.”
Giuseppe van der Helm of VBDO said: “As a sustainable investment forum, VBDO has 20 years’ experience with measuring company CSR performance in benchmarks. In our company engagements, we have noticed that public benchmarks make sustainability topics more concrete for companies and create a ‘race to the top’. We expect the Corporate Human Rights Benchmark to do the same.”
Over the next three years the six organisations, making up the CHRB Steering Group, will conduct a worldwide consultation on the methodology and results with diverse stakeholders, and incrementally collect and release information on 500 companies’ human rights performance. Powerful information will be made available through an open source, online portal to empower the range of business and human rights advocates among companies, investors, governments, local communities and NGOs.
When achieved, this will be an extraordinary breakthrough moment for the business and human rights field, creating greater corporate accountability, incentivising and requiring changes in business behaviour and creating greater leverage for policy-makers, investors, communities and consumers.
Amol Mehra of the Corporate Accountability Roundtable (ICAR), a coalition of human rights, environmental, labor, and development organizations who welcomed CHRB’s launch, said: “By building a comparative assessment of company performance on human rights, the Corporate Human Rights Benchmark initiative creates useful and needed momentum for corporate respect for human rights, and ultimately accountability.”