Respect – Respecting human rights is a long and continuous journey for companies, but one that is achievable if there is enough motivation. It is vital that companies just ‘get going’ and we hope the public rankings will be used to create more motivation for change. The UNGPs remains the benchmark framework for respect for human rights and the CHRB encourages companies to commit to its implementation across their value chains.
Learn – Many companies have reported the usefulness of the CHRB analysis, particularly in understanding where there are gaps in policies, systems or disclosures. Companies should take steps to address those gaps and learn from their peers; there are leading companies in each sector and with the publication of the 2018 research, lower scoring companies are provided with a wide range of resources to learn from. The big jumps by some companies clearly show that rapid improvement is feasible and low scoring companies should be learning and emulating their approach to improve.
Disclose – Some companies, particularly in North America, appear hesitant to disclose substantive details relating to human rights. We would encourage them to look at some better performing in-country peers for inspiration and to step up to meet the global expectations on human rights.
Dragging the Lagging – Some leading companies may be pleased with their score, but less pleased with the overall low score in their sector. If they believe there is a free-rider problem, the CHRB would encourage them to try and level the playing field by lobbying for mandatory human rights disclosures, sharing how they have approached human rights as a company, and using their leverage to push for better performance across their industry.
Investors now have a great opportunity to demonstrate their commitment to human rights by using their available leverage to drive positive changes:
Equity – If investors have influence through share ownership, they should use it: Continually low scoring companies should be engaged, and we would encourage investors to use the CHRB research to identify gaps and to help set time-bound expectations for companies on improving their approach to human rights during engagements. Where companies continually score poorly (overall, or on specific issues that are important to the investors), we encourage investors to make use of their voting rights to express their concerns and, where viable, to work with others and propose shareholder resolutions for AGMs in 2019. Finally, where low scoring investee companies refuse to improve, we encourage investors to ask whether it is worth being linked to a company who may not be committed to respecting human rights.
Screening – The CHRB companies are only a small sample of the whole investment universe (although arguably these largest-in-sector companies should also be better placed to demonstrate their respect for human rights). If investors are considering investing or providing capital to one of these companies, we encourage them to review their scores as part of the investment analysis and capital allocation decision making. Where the scores are low, we encourage investors to consider if association with the company aligns with the investor’s own commitments to human rights, or if an investment opportunity might also bring with it an opportunity to exert leverage in line with the UNGPs to drive improvements in the company’s approach to human rights.
Showing – The UNGPs apply equally to investors, who should ‘know and show’ their respect for human rights. The CHRB encourages investors to demonstrate where they have integrated human rights thinking into their approaches, to be more transparent about engagement, screening, voting and divestment that is linked to human rights, and to support the CHRB if the research has proven useful. By ‘showing’, investors will not only encourage broader, systematic changes, but will also demonstrate that they too are integrating the UNGPs across their own operations.
NAPs – With two sets of results, showing a trend towards improvement, but at a slow pace and complemented by unacceptably low average scores, governments have the means to better understand the implementation of the UNGPs in sectors with significant human rights risks and impacts and, by implication, how well the various National Action Plans on Business and Human Rights (NAPs) and legislation on mandatory disclosures are working to date. The CHRB encourages governments to use our findings when reviewing their NAPs and/or legislation and guidelines.
Mandatory Disclosure – The CHRB data suggests that while a mixed/ low legislative approach to business and human rights (and its disclosure) can in theory work to improve company performance, it is not yet reaching its full potential. As such, the CHRB recommends that governments recognise and reward those companies who show they are seeking to respect human rights, particularly when the current environment means those companies may face a ‘first mover disadvantage’. Conversely, governments should recognise that the lower performing companies may be reaping a competitive advantage by not respecting human rights and should consider whether the bar on mandatory disclosures on business and human rights is currently set too low.
Standard-bearer – Finally, the CHRB would encourage elements of government that directly engage with business to be standard bearers for integrating respect for human rights in business practices: Governments, through state-owned-enterprises, procurement, private-partnerships, export credit, trade deals and licensing, have huge leverage that could result in the trickle down of human rights requirements to companies both at home and abroad. Where possible, the CHRB encourages governments to make best use of this and to understand how the CHRB data and methodology may support this.
CIVIL SOCIETY, WORKERS, COMMUNITIES, MEDIA AND CUSTOMERS
The CHRB is providing a wealth of information to civil society, workers and society at large, to enable these groups to make better informed decisions, and we rely on these stakeholder groups to utilise the publicly available data to support their own agendas.
We would encourage civil society to prioritise efforts on the low scoring companies who have yet to be sufficiently motivated to change their approach to human rights. While no company is perfect and while it is likely that high-scoring companies will also have ongoing or emergent human rights issues, the lack of demonstrated respect for human rights implied in the lowest scoring bands should generate much greater scrutiny in the future.
Consumers have not yet been a major focus of CHRB engagement, but we would encourage the media and civil society to consider where high and low scoring companies (and their associated brands) may provide interesting narratives to drive changes in consumer behaviour to reward those companies who are clearly demonstrating their respect for human rights.
The CHRB encourages civil society and interested stakeholder groups to get in touch to better understand the nature of the data provided and where specific issues, such as labour rights or living wages, may be identified to support single issue campaigns.