The World Benchmarking Alliance (WBA) recently published its its 5th iteration of the Corporate Human Rights Benchmark (CHRB). The 2022 benchmark scores and ranks 127 of the largest and most influential companies in the food and agricultural products, ICT manufacturing and automotive manufacturing sectors on their human rights commitments, due diligence processes, grievance mechanisms, supply chain practices, and responses to serious allegations. This fifth iteration of the CHRB offers an opportunity to pause and reflect on where companies stand compared to the first iteration in 2017.
Nearly two-thirds of companies in scope have improved their scores on key indicators, such as those relating to human rights commitment and due diligence, since their first CHRB assessment, and there are many examples of good practice and disclosure across all topics assessed. This progress is even more meaningful given that the CHRB underwent a methodology review in 2021 that raised the bar for companies in line with evolving stakeholder expectations of corporate respect for human rights.
Although these results are encouraging, there is still a long way to go. 82% of companies still score below 30 points out of 100, and 36% score zero on all human rights due diligence indicators. While we see a growing group of companies committing to improve their human rights disclosures and practices, another group of companies seems ‘stuck’ at a place of low to no disclosure on how they are fulfilling their responsibility to respect human rights.
Over a decade since the launch of the UNGPs and faced with upcoming due diligence legislation, the pace of improvement needs to speed up. From five years of benchmarking data, we have gathered the following learnings that can help companies improve.
Assign senior level responsibility for human rights
Undertaking appropriate human rights due diligence (HRDD) is central to fulfilling corporate responsibility to respect human rights, but with 36% of companies scoring 0 on HRDD indicators, many are a long way off. So where should these companies start?
Data from the CHRB displays a clear link between having people and processes in place at the top levels of a company to manage human rights and performance on HRDD. In other words, a simple first step for companies to improve their due diligence and broader human rights performance is to make human rights a core part of senior-level roles and responsibilities and to carve out time and resources for it.
Monitor supply chains and work with suppliers on salient issues
Two thirds of the companies assessed disclose that they take human rights performance into account when deciding to renew, expand or terminate business relationships with suppliers. And yet, more than Instead of just passing responsibility upstream, companies have an opportunity to work collaboratively with suppliers to enable commitments to be met in practice. This can be achieved not only through capacity building and training, but also through revising sourcing/purchasing practices.
Engage more meaningfully with affected stakeholders
Dialogue with (potentially) affected stakeholders such as workers and communities can help companies understand and mitigate factors that (may) contribute to negative human rights impacts, and get feedback on how to effectively respond when they do cause harm. As such, stakeholder engagement is particularly essential in human rights due diligence. While 66% of companies assessed in 2020 committed to engage with stakeholders on human rights issues, these commitments have not translated into action. 71% of companies assessed in 2022 failed to disclose how they engage with stakeholders on a regular basis, which should include identifying key stakeholder groups, engaging in dialogue with them and ensuring they are properly informed, and integrating their needs and experiences into action. Implementing meaningful stakeholder engagement on human rights can help companies to address stakeholder concerns early and effectively before human rights risks turn into impacts.
Serious allegations caused in OECD, felt in non-OECD
The CHRB includes an assessment company responses to serious allegations of negative human rights impacts on a variety of topics. In 2022, more than half (52%) of the companies were assessed on at least one serious allegation connected to them. A geographical mapping of these allegations reveals interesting patterns: while the majority (82%) of allegations were against companies headquartered in OECD member countries, the vast majority (82%) of alleged impacts occur in non-OECD countries. Moreover, while the highest share of allegations were linked to forced labour, health and safety and discrimination, regions in the global south suffered a disproportionate number of allegations linked to child labour, forced displacement and lack of a safe and clean environment.
Five years of CHRB data shows that many companies have made significant improvements on their human rights disclosure and practices, but it also shows that big gaps remain. To further drive company action on human rights there is an urgent need for government legislation, as well as pressure from investors and civil society. And it is in companies’ own interest to do so, as the results demonstrate that those willing to up their efforts on human rights are better equipped to plan for a just energy transition and get ahead of mandatory human rights legislation. Companies that are ready to take this step can refer to CHRB methodologies as a roadmap for the implementation of the UNGPs as well as learn from best practices through our published results.