Companies are scored on 100 indicators, focusing on policies, governance, processes, practices, and transparency

Companies are scored on 100 indicators, focusing on policies, governance, processes, practices, and transparency

First feedback on last week's launch of the Corporate Human Rights Benchmark (CHRB) has welcomed the move – but warns against drawing conclusions too quickly and highlights a number of critical issues such as the quality and credibility of information, governance and price pressures.

The benchmark, led by investors and non-profit groups, is the first public ranking of corporate human rights performance. Companies are scored on 100 indicators, focusing on policies, governance, processes, practices, and transparency, as well as how they respond to serious allegations.

The aim is to get investors thinking far more about the human rights impacts of their investments, and reward companies that are more transparent about their policies and practices.

Companies assessed against the benchmark included Gap, H&M, Inditex, Next, Tesco, and Marks and Spencer, with the latter scoring the highest.

Marks & Spencer tops human rights benchmark

Cindy Berman, head of knowledge and learning for the Ethical Trading Initiative (ETI), believes the benchmark is ambitious and welcome, with the potential to be "catalytic" if it drives change through greater transparency.

However, she says it must get company buy-in, and needs to build on the collaboration it has established with key stakeholders. She also points out that very few companies in the assessment have scores to be proud of.

Marked out of a potential score of 100%, only six of the 98 companies analysed across three industries scored over 50%, with the assessment based only on publicly available information.

M&S, one of 30 large apparel companies assessed, scored between 60-69%. Adidas, meanwhile, scored 50-59%, Hennes & Mauritz (H&M), Gap Inc, and Nike all scored 40-49%, while VF Corp, Hanesbrands, and Target scored 30-39%.

"It is important to caution against drawing conclusions too quickly about who is "best in class". Being rewarded for what they publish does not necessarily equate to leadership on what companies do.

"Some companies may not be as good at communicating ethical success. As important as transparency is, it doesn't tell the whole story."

Berman highlights four issues she believes need critical attention: ensuring companies have the right systems in place to conduct due diligence, recognising workers cannot continue to bear the cost of price squeezes, impunity and remediation for worker violations; and an agreement on what constitutes credible and verifiable information.

John Morrison, chief executive of the Institute for Human Rights and Business, one of the companies involved in developing the Benchmark, says there is much more analysis to draw out the examples of leading practice and gaps to fill, which they are aiming to be producing in the coming weeks and months.

In particular, Morrison says, there will be a look at how the Benchmark influences investor behaviour, and the leverage and incentives this might start to build within companies.

"Government itself is an economic actor, and we hope that CHRB is a tool embraced by those looking at how human rights can be best integrated into public procurement or export credit decision-making. Finally, last but not least, is the ultimate incentive of all, informing consumer choice – known for its fickleness but potentially a huge driver for change. We hope that consumer groups will start to use CHRB to produce materials and tools that will allow consumers to reward companies directly, through their wallets and purses."

The Benchmark was developed by Aviva Investors, the Business and Human Rights Resource Centre (BHRCC), Calvert Investments, the Institute for Human Rights and Business (IHRB), VBDO and VigeoEiris.