Too many multinational companies are falling short when it comes to protecting and upholding human rights, despite calls from investors to step up their commitments and conduct proper due diligence. That’s according to the 2020 Corporate Human Rights Benchmark (CHRB) released last week at the United Nation annual Forum on Business and Human Rights.
The annual ranking, which assesses the human rights disclosures of 229 of the world’s biggest companies, found that despite an overall improvement in scores, more than a third failed to improve on their 2019 results, and many of the lowest scorers from that year are still refusing to move.
Car manufacturing - reviewed for the first time - was the worst-performing sector. The other four sectors surveyed included apparel, extractives, information and communication technology and agriculture. Swiss multinationals Nestlé and Glencore came fifth and sixth in the ranking for agriculture products, with both companies improving their score on the previous year - although falling well short of top marks for embedding respect and human rights due diligence.
The researchers said that “only a minority of companies demonstrate the willingness and commitment to take human rights seriously,” with human rights due diligence one of the key areas where companies showed the least improvement. In fact, nearly half of the companies assessed (46.2 per cent) failed to score any points for this part of the assessment.
Camille Le Pors, CHRB lead at the World Benchmark Alliance, said: “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.”
“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.”
Negative human rights impacts are overwhelmingly felt in developing countries. Nearly half (104) of the 225 companies measured faced at least one allegation of a serious human rights issue - the most common of these involving situations of forced labour, child labour or health and safety breaches that resulted in death or injury.
The benchmark found that only a third engaged in dialogue with stakeholders, with just four per cent providing a remedy that satisfied victims. Despite the fact that 78 per cent of companies in the survey are based or headquartered in OECD member countries, 85 per cent of all alleged impacts occurred in developing countries. India and China were where these most regularly occurred.
The #CHRB2020 @RankBHR checked 225 allegations of severe #humanrights impacts. 85% of alleged impacts occurred in developing countries even though 78% of the companies are based in OECD nations.— World Benchmarking Alliance (@SDGBenchmarks) November 18, 2020
➡️Companies must implement #UNGPs across their value chains! https://t.co/W0UVSn9cPr pic.twitter.com/UzVmuGsdWr
Another worrying find is that some companies that scored well in human rights due diligence also faced allegations against them, showing a disconnect between what companies pledge to do, and the realities of what happens on the ground.
The Corporate Human Rights Benchmark, part of the World Benchmark Alliance, is a UK-based non-for-profit funded by an alliance of investors, foundations, and governments including the Swiss federal department of foreign affairs.
Companies in the benchmark are scored against the United Nations Guiding Principles on human rights indicators, a set of guidelines for states and companies to prevent, address and remedy human rights abuses committed in business operations.
The findings come as Swiss voters this week prepare to go to the polls to decide on whether to establish new rules for Swiss multinationals doing business abroad. The Responsible Business initiative wants to make businesses legally accountable for their activities abroad with respect to human rights and the environment. Other countries are also planning similar steps while in the European Union efforts are underway to streamline current regulations.