Most businesses failing on human rights due diligence, major ranking shows
- Over half of major companies in apparel, extractive, food & beverage and tech manufacture are failing on human rights – particularly on due diligence – in new Corporate Human Rights Benchmark;
- Steady improvements seen over three years, but one in five companies fail to improve on low scores;
- Tech manufacturing sector added for first time and scores poorly – urgent action needed;
- Monster Beverages, Starbucks and Costco still amongst the poorest performers in the ranking, while Adidas, Rio Tinto, Unilever, M&S and Hewlett Packard are leading their sectors.
The latest Corporate Human Rights Benchmark (CHRB) shows how most companies in the apparel, food & beverage, extractive and tech manufacture sectors are failing to meet basic corporate human rights expectations.
CHRB measures how companies perform across 100 indicators based on the UN Guiding Principles (UNGPs) on Human Rights. It uses publicly available information on issues such as forced labour, protecting human rights activists and the living wage to give companies a maximum possible score of up to 100% (2).
While some leading companies have improved significantly, more than half of those assessed are failing to demonstrate they are meeting any of the UNGP’s basic requirements on human rights due diligence (3). As this is the tool for companies to both “know and show” that they are respecting human rights, this year’s benchmark shows that more urgently needs to be done by companies, investors and governments. The CHRB data is already being used by multiple investors (such as Aviva Investors, APG and Nordea to inform investments and dialogue) and is used by multi-trillion-dollar investor coalitions when they engage with companies (4).
“Our rankings show some leading companies demonstrating that action on human rights is possible within a competitive environment. But far too many low scoring companies have not changed their practices at all. CHRB is calling for a rapid acceleration in the uptake of human rights due diligence to ensure companies respect human rights. States and investors also have a key role and they should use this data to motivate companies to rapidly improve,” said Steve Waygood, Chief Responsible Investment Officer, Aviva Investors and Chair of the CHRB Board.
75% of companies have improved their scores, with top movers since 2017 including ENI, Diageo, Repsol, Danone, Heineken, Fast Retailing, Kellogg, Inditex and Pepsico. Leaders, such as Adidas, Unilever and Marks & Spencer retain top positions and score above 70%. But most companies are performing poorly – the average overall score is 24%, while companies added to the ranking this year scored 17% on average (5). Tech companies averaged just 18% in the 2019 ranking, although this is the first year they are featured.
CHRB believes the data shows its benchmarking, supported by stakeholder pressure, has prompted some companies to change their approach to human rights. However, there are still plenty of laggards who consistently refuse to meet the basic requirements and who need further and greater pressure to act.
“The CHRB scores reflect the market failures around human rights where some companies rely on business models and practices that abuse people’s rights and avoid scrutiny and accountability. This latest data shows welcome improvements from many, but the majority are not moving fast enough toward respecting human rights. States have a duty to protect people from corporate abuse and while recent measures to improve human rights due diligence are welcome, more needs to be done to make respect for human rights ‘business as usual’,” said Phil Bloomer, Executive Director of the Business & Human Rights Resource Centre and board member of the CHRB (6) (7).