Global companies still falling short on human rights, despite mounting pressure

The Automotive sector, included for the first time this year, is the worst performing industry ever to be ranked by CHRB, exposing the sector’s failure to manage or even adequately track human rights risks in supply chains.

Content Manager at RankiaPro

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The World Benchmarking Alliance (WBA) has launched its fourth edition of the Corporate Human Rights Benchmark (CHRB) assessing 230 of the world’s most influential companies on their human rights disclosures. 

Nearly half of the global companies assessed are failing to demonstrate they are conducting human rights due diligence in line with the United Nations Guiding Principles on Business and Human Rights. This is deeply concerning, given that human rights due diligence is at the heart of any good approach to managing human rights and is essential for companies to drive sustainable change and support the Sustainable Development Goals (SDGs). 

“There is a concerningly large group of companies who have made little to no progress in the last 12 months. We’re sensing a real reluctance from the laggards to improve. When we look at the companies assessed for the first time this year, 70% failed to score any points on human rights due diligence. While a small group of companies are demonstrating strong commitment and processes, it’s not always clear that these deliver their intended effects. Clearly, businesses alone won’t raise the bar and with COVID-19’s compounding impact, there is a real need for regulatory action, as planned by the European Union, as well as increased investor pressure to force change.” 

Camille Le Pors, CHRB Lead at WBA

Following the 2019 edition of WBA’s CHRB, 95 companies were targeted by a joint statement from a group of 176 investors for scoring zero on all human rights due diligence indicators. Of these, 79 are still scoring zero in 2020.

“Despite some progress, too many of the world’s largest companies are failing to meet investor expectations on human rights issues, especially around due diligence in their supply chains. This lack of improvement is unacceptable, and these companies should be required to explain to investors, as well as other stakeholder groups, why their disclosures on such an important topic are so poor. The societal, financial and moral imperative is clear – the global business community needs to step up its game if we want to have any chance of achieving the Sustainable Development Goals by the 2030 deadline.”

Marte Borhaug, Global Head of Sustainable Outcomes at Aviva Investors, a founding member of the CHRB

The Automotive sector, included for the first time this year, is the worst performing industry ever to be ranked by CHRB, exposing the sector’s failure to manage or even adequately track human rights risks in supply chains. Not a single automotive maker scored above 50%, and half of the 30 companies assessed scored below 10%. 

A just transition is undermined by a disconnect between human rights and climate issues

The 30 automotive companies researched by CHRB were also assessed by WBA’s Climate and Energy Benchmark, which shows that much more needs to be done to achieve the UN Paris Agreement goals in time by setting ambitious emissions targets. 

Most automotive companies that demonstrated action on climate issues disclosed very little, if any, information on how they manage human rights, and vice versa.

“This is extremely alarming as a distinct requirement of the UN Paris Agreement is to achieve a ‘just transition’; a future where no one is left behind in the movement towards a net zero-carbon economy. Without consideration for human rights, we will only exacerbate existing inequalities and increase the potential for exploitation of already vulnerable groups.”

Vicky Sins, who leads the Decarbonisation and Energy Transformation at WBA

WBA´s Automotive Benchmark, developed in partnership with CDP & ADEME using the ACT methodologies launched last year, and the 2020 Update is available here: https://www.worldbenchmarkingalliance.org/publication/automotive  

Nordea on the results

“As we have with the previous assessments data, we will integrate the 2020 results in our in-house ESG research platform and use them in our engagement with companies. The CHRB data is very important as driver for our work on human rights and as a source of information – we now have unique and comparable data over a number of years for some companies and are able to track their performance on human rights issues in a very systematic way.”

Katarina Hammar, Head of Active Ownership at Nordea Asset Management, a member of the CHRB

The full 2020 Corporate Human Rights Benchmark, including a sector breakdown and individual company scorecards, is publicly available here: www.worldbenchmarkingalliance.org/publication/chrb

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Global companies still falling short on human rights, despite mounting pressure