Preventing adverse impacts on workers, communities and consumers is one of the most pressing challenges almost every company faces in today’s globalised marketplace. The Corporate Human Rights Benchmark (CHRB) seeks to tap into the competitive nature of the market as a powerful driver for change in confronting this challenge.
The 2019 Corporate Human Rights Benchmark assesses 200 of the largest publicly traded companies in the world on a set of human rights indicators.
Landmark Meeting Press Release
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.”