Companies and investors convene to discuss human rights issues in landmark meeting
New York: On Human Rights Day, Corporate Human Rights Benchmark (CHRB(1)) convened investors and companies at BlackRock to discuss progress by companies towards meeting corporate human rights expectations and to unveil CHRB’s 2019 rankings.
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 paying a living wage to give companies a maximum possible score of up to 100% (2).
The 2019 benchmark shows that the majority of the 200 key listed companies assessed (3) in high risk sectors are failing to demonstrate respect for human rights. A sustained lack of progress from many low scoring companies has led to calls for mandatory human rights due diligence regulation, particularly in Europe. The Investor Alliance for Human Rights’ call for such measures and already have 60 investors onboard.
Former UN High Commissioner for Human Rights Prince Zeid Ra’ad Zeid al-Hussein set the global scene for business and human rights at the end of the decade at a time when international institutions and standards are under pressure and human rights defenders are under attack. He challenged companies and investors alike to strengthen respect for human rights and expand human rights due diligence prevent harm to people involved in business operations and supply chains, as well as to local communities and consumers.
Daniel Neale, Director of Corporate Human Rights Benchmark said, “This is a big step for the human rights agenda in the US. It is great to see so many US based investors and corporations discuss our 2019 ranking on Human Rights Day. Investors hold huge power for change – but they can also block it. That is why it is so encouraging to have investors with over $10 trillion under management joining us today. We hope these investors will now use our freely available data to push those companies who are lagging behind their peers to improve their disclosures and approaches to human rights.”
Anna Pot, Head of APG Responsible Investment Americas and member of the CHRB Advisory Board explained how they have already used the data: “At APG, we use the CHRB data in our investment analysis. We also bring it to the table with us when we engage companies on their human rights performance. It helps us be explicit about our expectations. While it is encouraging that average scores show an overall improvement since 2017, more action is required to effectively implement the UN Guiding Principles.”
“A company’s approach to managing environmental and social factors can be a key driver of long-term performance and value creation,” said Michelle Edkins, Global Head of BlackRock Investment Stewardship. “Investors are paying more attention to human rights issues and need better disclosure by companies to be able to assess and engage on governance and business practices in relation to human rights. This event was an invaluable opportunity to learn from a diverse group of practitioners about how investors and companies alike are navigating these issues.”
Investors including APG, Nordea (both CHRB members) and Nuveen, plus benchmarked companies (Newmont-Goldcorp, PepsiCo and Chevron) discussed the results of the latest rankings and the role of human rights benchmarks within their companies. Regarding investor use of the data and the progress seen from some companies, Magdalena Kettis, Thematic Engagement Nordea and member of the CHRB Advisory Board, said, “The CHRB results assist Nordea in encouraging companies to meet investor expectations on human rights and to raise awareness about the material risks for failing to do so. Some companies have responded positively to the challenge of a public benchmark, however there are still many who still need to demonstrate improved human rights performance.”
US-based companies make up one-third of the companies in the rankings, scoring an average of 23% (compared to 37% in Europe). One half of US companies scored zero points on all the CHRB’s human rights due diligence indicators. Leading companies include Freeport-McMoran, Kellogg, Newmont-Goldcorp, Gap, VF Corp and Coca Cola, while repeatedly low-scoring companies include Costco, Monster Beverages, Starbucks, Ross Stores, Phillips 66 and EOG Resources. CHRB co-founder and former Calvert Investments Senior VP Bennett Freeman added, “It is time to narrow the trans-Atlantic gap that these results show between European and U.S-based companies. American companies must meet established global standards to address the global human rights risks and responsibilities they face.”
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For copies of the report and interviews, please contact Oliver Courtney, oliver@digacommunications.com +44 (0)7815 731889
Editor’s notes
(1) CHRB (www.corporatebenchmark.org) is a UK based not for profit, supported by a mix of investors, civil society organisations and governments. It produces in-depth assessments and rankings of how well companies in high-risk sectors perform on human rights issues. CHRB aims to harness the competitive nature of the markets to drive better corporate human rights performance, by providing companies, investors, consumers, governments and civil society with the information to make better decisions on the allocation of capital, purchasing, procurement, legislation and campaigns. CHRB is part of the World Benchmarking Alliance (WBA) and is in the process of merging with the WBA. The WBA will assess and rank 2,000 keystone actors on their contribution to the 2030 sustainable development agenda, with all companies being assessed against social indicators, which will have human rights at their core.
(2) CHRB assesses companies on Human Rights Due Diligence via five indicators in Theme B.2. 95 companies from the total group scored zero on each of the five indicators (looking at identifying, assessing, acting, tracking and communicating on human rights impacts and risks), while 110 companies failed to achieve a score of 1 point (basic requirement) in any of the five indicators. 22% of companies scored half the max available points on B.2 (roughly equating to meeting the basic expectations in each of the five indicators).
(3) The CHRB Methodology used to assess companies is the result of extensive multi-stakeholder consultation, involving representatives from over 400 companies, governments, civil society organisations, investors, academics and legal experts. Grounded in the UN’s Guiding Principles on Human Rights, it produces a proxy for corporate human rights performance across six key themes: governance and policies, embedding respect and human rights due diligence into the business, remedies and grievance mechanisms, human rights practices, responses to allegations of serious human rights impacts and transparency. The research, delivered with our partner EIRIS Foundation and supported by RepRisk (a provider of ESG risk metrics and analytics for the CHRB serious allegations), is based on public information, supported by (optional) company engagements and is made freely available to all interested stakeholders. Scores of zero does not necessarily mean that bad practices are present or that there is no company action on the issue. Rather, it means that we have been unable to identify the required information in public documentation.