How do companies use the Corporate Human Rights Benchmark?
Launched in 2013, the Corporate Human Rights Benchmark (CHRB) helps companies to understand society’s expectations of them regarding business and human rights. Our methodology provides companies with guidance on how to practically implement the United Nations Guiding Principles on Business and Human Rights and our results can help companies understand gaps in their human rights management. Periodical revisions ensure that the methodology remains in line with stakeholder expectations. Below are some examples of how companies have used the CHRB in their efforts to improve their corporate human rights practices.
To increase accountability and incentives
French integrated oil and gas company Total Energies has been included in the CHRB since 2017. In 2020, the company decided to include the CHRB as one of the five non-financial data metrics to assess its CEO’s CSR performance. This assessment determined a potential bonus of up to 15% of his or her annual variable compensation. By linking the company’s performance on the benchmark to executive compensation, the company is increasing executive level accountability and incentives for respecting human rights.
Canadian mining company Barrick Gold has been included in the CHRB since 2019 and ties management and other functions’ compensation to the company’s performance in the CHRB. In its 2020 Sustainability Report, the company announced:
We tie the performance of our human rights program to our Sustainability Scorecard, which impacts the compensation of our partners from all functions and disciplines across the company”. In 2020, performance against the Sustainability Scorecard accounted for 25% of long-term incentive compensation for senior leaders. Human rights accounts for 20% on Barrick Gold’s Sustainability Scorecard. Performance in the CHRB is one of two human rights indicators, the other being the percentage of employees trained on human rights.
As a continual feedback loop for improvement
Beverage manufacturing company Anheuser-Bush InBev (AB InBev) has been included in the CHRB since 2017. The company scored 9.4% out of 100 in its first year of inclusion. This came as a shock to the company, Andres Peñate, Global Vice President of Regulatory and Public Affairs, explained:
The results came, and they were dreadful. We came with a 9.4% score – out of 100! That was a shock. Our immediate reaction? “There must be something wrong with the benchmark!” We sat down with the Corporate Human Rights Benchmark team. Obviously, I wasn’t a happy person in that meeting, but we learned about the metrics, and that there were key elements missing. There were fundamental gaps, and all these gaps were about transparency: publishing our policies, publishing our clauses related to human rights. Very fundamental things. After the meeting, we asked ourselves, “how come we haven’t been doing this before? Read or listen to more of Peñate’s thoughts on being benchmarked by the CHRB.
The results from the Benchmark and engagement with the CHRB team allowed AB InBev to identify gaps in performance, while the methodology itself provided guidance on how to tackle these. The company improved its score to 17% in the second year, when it also realised there were more gaps.[/sidenote]
We went back and began to see that there were more gaps. It was essential to develop a way of managing risk, or applying a risk mentality that you apply in so many aspects of business, to human rights; so that you can not only respect human rights, but also prevent issues. It was a revelation.
Through incorporating the learnings from these two benchmarks, the company was able to improve its policies, processes and practices regarding respect for human rights significantly. AB InBev increased its score to 36% in its third year, moving from being in the bottom five of benchmarked companies to the top thirty.
Benchmarks are also key to continue making progress when money is scarce. They show where the priority needs to be and where your resources are going to have the most impact. It gives you priorities and allows you to be more efficient.
To track progress and compare their performance against peers
Adidas, the German apparel and footwear company, has been included in the CHRB since 2017. On its website the company states that it uses the “the Corporate Human Rights Benchmark amongst others, to track our performance and programs in relation to our industry peers” on modern slavery and forced labour.
