Many firms are falling behind on human rights issues and need to learn from the industry leaders and adapt quickly, according to a report.
In a benchmark by Corporate Human Rights Benchmark (CHRB), BHP Billiton, Marks and Spencer Group and Rio Tinto were ranked the top three respectively among nearly 100 firms.
The three firms were part of a cluster of companies that have taken a leadership role on human rights, CHRB said. It said that more firms needed to follow suit.
CHRB said the majority of low-performing firms were “falling overwhelmingly behind, with all the dangers for human rights abuse of workers and communities that this implies”. Engagement with communities, workers and other affected stakeholders was also lacking.
“[Firms] need to act decisively, learn from leading practices, and emulate rapidly their existing standards… With increasing public scrutiny, any inaction runs a high reputation risk with investors, customers, and the talent that their future success depends on,” it said.
The report analysed 98 publicly-listed companies in the apparel, agriculture and extractive sectors, chosen because of their revenue and market capitalisation. They were ranked based on their performance on six indicators: governance and policy commitments, due diligence, grievance mechanisms, business practices, response to allegations and transparency.
Firms were evaluated based on publicly available information, and given an opportunity to provide any additional information on their efforts. CHRB said its scores were an estimation for human rights performance, and a low score did not necessarily mean bad practices were present.
There was a “clear gap in [firms] moving from having a policy paper… to taking the first step towards making the policy work in practice”, the report said. “More work is to be done at the day-to-day or micro-level of the company to systematically implement all components of the human rights due diligence process.”
Of the firms surveyed, one third did not adequately demonstrate public policy commitments to human rights, and in over half the issue was not reaching the top table. But more than a third did integrate human rights into their risk management processes, and a similar percentage are monitoring their commitment.
Of the 60 firms assessed on treatment of workers in the supply chain, only Unilever showed it publicly determined what the living wage was in the countries where it operated. More firms publicly described how they worked with or issued guidelines to suppliers on paying a living wage.
In the agriculture and apparel industry, only nine of 57 firms demonstrated how they avoided putting pressure on suppliers though their purchasing decisions, such as pricing and short notice requirements.
Still in these sectors, 12 firms publicly indicated they knew who their suppliers were to the level of their farms or factories and 18 publicly disclosed their mapping for the “most significant” parts of their supply chains.
Top five firms on human rights performance:
1. BHP Billiton
2. Marks & Spencer Group
3. Rio Tinto
1. Costco Wholesale
3. Grupo Mexico
4. Yum! Brands
5. Oil & Natural Gas Corporation
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