The first comprehensive project to assess and rank the world’s largest publicly listed companies on their commitment to human rights has begun. The Corporate Human Rights Benchmark (CHRB), developed by a group of investors in conjunction with an international NGO, think-tank, and research agency, has just launched its pilot benchmark process.
The concept: to analyse and rate major corporates on their human rights governance and policies, processes and systems, practices across key industry risks, responses to serious, human rights-related allegations, and overall transparency. The overall goals are to promote transparency, recognize corporate human rights leaders, urge investors to consider the social cost of investing, promote a “race to the top,” and inform and empower regulators and civil society to hold companies accountable.
This year, 100 companies in the agriculture, apparel and extractives industries will be evaluated. Eventually, 400 companies from six additional sectors (heavy manufacturing and engineering, ICT and electronics, light manufacturing, finance, pharmaceutical and service) will be added. All companies will be ranked using a methodology aligned with the UN Guiding Principles and industry-specific global standards. Companies will be benchmarked both against each other and against companies within their specific sectors. Certain subjects will be out of scope for the purpose of the benchmarking: companies’ geographic footprints, impacts associated with the retention of services or products’ end use, companies’ CSR and philanthropic work, and collective impacts. That is to say instances where it is impossible to trace discrete impacts on particular victims to one company or its business relationships.
The first 100 companies were notified of their selection in February. From March through May, analysts will evaluate them using publicly available information drawn from company websites, financial and non-financial reporting, and annual, CSR, sustainability and/or human rights reports. Companies can but do not have to share information via the CHRB’s public, online disclosure portal. When reviewing how companies have responded to serious, human rights-related allegations, additional inputs such as media reports may be used and/or sources, including multilateral organizations, trade unions and NGOs, consulted. Only in cases where a victim’s well-being is at stake or in the event of an ongoing, confidential legal proceeding will non-publicly available information be considered.
Companies will receive their draft benchmark assessment scores and any outstanding issues this August and given a chance to respond and engage with the CHRB, which the initiative leaders note will be especially important in the context of third-party allegations concerning company impacts. The final scores will be released this November. For more on the CHRB read here.