Lack of public communication suggests the majority of companies benchmarked are not adequately assessing or mitigating human rights risks.
NEW YORK, NY, MONDAY, MAY 10TH, 2021 – A group of 208 global investors organized by the Investor Alliance for Human Rights (the Alliance) and representing US$5.8 Trillion in assets under management announced it has sent a statement to 106 companies that have scored zero on all the human rights due diligence indicators in the 2020 Corporate Human Rights Benchmark (CHRB) report.
The CHRB assesses companies on a set of human rights indicators established by the UN Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct, considered the leading global standards for best-practice corporate human rights performance.
Based on the latest 2020 CHRB ranking, 106 companies – nearly half of the 230 largest publicly traded companies in high-risk sectors measured against five human rights due diligence indicators – scored zero on all five indicators, a strong indictment of their human rights performance. Sectors included in the benchmark are agricultural products, apparel, extractives, ICT manufacturing and, for the first time, automotive manufacturing. Two thirds of automotive companies scored zero on all the human rights due diligence measures making it the worst performing sector in the CHRB.
“Only a minority of companies demonstrate the willingness and commitment to take human rights seriously,” said Camille Le Pors of the CHRB. “If we are to achieve the SDGs by 2030, we need all companies to participate in this effort and to place people and planet above the pursuit of profit at all cost.”
“A company’s public communication on these factors will impact its score on the CHRB ranking, so while some companies may well be doing more, their failure to disclose will count against them,” said Anita Dorett, Director of the Alliance. “Disclosure is critical to transparency and accountability of companies in addressing human rights risks, and will provide investors with needed insights into how a company is meaningfully working to fulfill its responsibility to respect human rights.”
A sample of the companies receiving the letter include PetroChina ($PTR), Devon Energy ($DVN), Costco Wholesale ($COST), Starbucks ($SBUCKS), Yum! Brands ($YUM), Target ($TGT), General Motors ($GM) and Honda ($HMC). The investors say in the case of several companies, this represents the fourth time they have reached out to zero-scoring companies requesting that they disclose through the CHRB, and while some companies have responded, the vast majority have failed to do so.
"We have been calling on companies to act on CHRB results since 2017,” said Anna Pot of APG Asset Management. “While we do see that some scores have improved, only a minority of companies are demonstrating their commitment to human rights. As a responsible investor, APG wants to see companies perform human rights due diligence and report on outcomes. Period. We have clearly communicated our expectations in the joint investor letter. Companies need to take it seriously. It is time to act."
In March 2020, 176 international investors sent a letter to the 95 companies that failed to score any points on the human rights due diligence indicators, calling for urgent improvement. Of those 95 companies, 79 continue to score 0 on human rights due diligence.
“A core tenet of the UNGPs’ human rights due diligence process is that companies be prepared to ‘know and show’ their potential risks on an ongoing basis,” said Magdalena Kettis of Nordea Asset Management. “We are expecting companies to take action in response to this latest outreach and If not, we are fully prepared to invoke the proxy process to motivate laggard companies.”
“As investors, we expect companies to demonstrate their respect for human rights across their operations and value chains, including through the disclosure of strong public commitments on human rights, explanations of rigorous human rights due diligence processes, and transparent mechanisms that enable remediation of negative impacts,” said Vaidehee Sachdev of Aviva Investors. “Companies scoring zero on the CHRB are clearly failing in their responsibility to meet these expectations. Workers and communities along the value chain have endured devastating impacts as a result of the pandemic - now is the time to embrace the responsibility to protect human rights, not withdraw from it. We encourage investors in these companies to hold these recalcitrant companies to account.”
About the Investor Alliance for Human Rights
The Investor Alliance for Human Rights is a collective action platform for responsible investment that is grounded in respect for people’s fundamental rights. Its members include asset management firms, public pension funds, trade union funds, faith-based institutions, family funds, and endowments. Collectively, they represent over US$5 trillion in assets under management and 18 countries. The Investor Alliance is an initiative of the Interfaith Center on Corporate Responsibility. Visit our website at: https://investorsforhumanrights.org/ and follow us on Twitter: @InvestForRights
ICCR, Director of Communications