Corporate giants are falling down on human rights, says study
Too many multinational companies are neglecting to protect human rights despite investors and customers urging them to do so, according to the 2020 Corporate Human Rights Benchmark.
When it comes to protecting and upholding human rights, some of the most powerful corporations on the planet are falling down.
That’s the conclusion of a report out this week by the World Benchmarking Alliance that compiles data to compare and rank companies’ performance on achieving the United Nations Sustainable Development Goals (SDGs).
The 2020 Corporate Human Rights Benchmark (PDF) surveyed 229 major global corporations and found that nearly half of them had at least one allegation of a serious human rights issue levied against them, but only four percent of companies adequately remedied the situation with the victim.
Corporate human rights disclosures were measured across five sectors including agriculture, apparel, extractives, information and communication technology manufacturing and – for the first time – the automotive industry.
Researchers found that only a minority of companies “demonstrate the willingness and commitment to take human rights seriously”, and the coronavirus pandemic has exacerbated glaring inequalities and human rights negligence throughout global value chains.
The failures begin with due diligence says the report, which found that nearly half of the corporations studied – 46.2 percent – didn’t perform on that metric.
“Nearly half is concerning,” benchmark lead Camille Le Pors told Al Jazeera. “What that means is that they don’t disclose any information on how they identify, assess or act on their human rights risk and that is very concerning.”
The automotive industry earned the worst ranking since the benchmark was first published in 2017 for its repeated failure to manage and document human rights risks in supply chains.
Automakers Ford Motor Company, Groupe PSA and Daimler faired best in promoting human rights due diligence within the company culture, while Great Wall Motor Company, SAIC Motor, Chongqing Changan and FAW Car Company ranked the worst.
“Some companies are getting better when it comes to making commitments and managing human rights due diligence. But there’s still a disconnect between making commitments and having those translate into positive impact on the ground for all stakeholders,” Le Pors said.
The benchmark found that while Unilever, Adidas, Eni and Ericsson have improved in demonstrating human rights due diligence, others including Starbucks, Ross Stores and Phillips 66 are lacking when it comes to progress.
The private sector and especially major multinational corporations have a crucial role to play in advancing the United Nations 2030 SDGs.
And while some companies are meeting the targets of the UN Guiding Principles on Business and Human Rights (UNGPs), entire sectors are simply not on track to meet the 2030 goals unless urgent action is taken.
“Supply chains of large companies are based in developing countries where rule of law is often weak and labor standards not strictly enforced giving businesses the space to cut costs at the expense of the rights of their employees or employees of their suppliers,” the human rights team at the UN Development Programme (UNDP) told Al Jazeera.
Eighty-five percent of all alleged impacts spotlighted in the benchmark are felt in developing nations despite the fact that 78 percent of companies assessed are based or headquartered in OECD member countries, the team added.
The World Benchmarking Alliance also underscored the need to bridge the divide between human rights and climate change issues, stressing that the two are interconnected. For example, it noted that auto companies that took action on climate issues lacked action in the human rights sphere and vice versa. The two issues, however, require a holistic approach, the report argues.
“Any action taken to achieve carbon neutrality without consideration for human rights will undoubtedly lead to greater inequalities and increase the potential for exploitation of already vulnerable groups,” Vicky Sins, climate and energy lead at World Benchmarking Alliance, told Al Jazeera.
Governments, stakeholders and investors all could play a part by enacting regulations, setting standards and engaging in advocacy work.
That leadership is crucial because without government regulation and standard setting, very few companies will take it upon themselves to ensure human rights and the environment are protected, the World Benchmarking Alliance warned.
“Companies traditionally act based on liability risks which are determined by national labor laws, often weak or lacking implementation, rather than following international standards,” UNDP’s human rights team added.