Boards taking responsibility appears to be the key that unlocks better corporate performance on human rights, according to a new report.

The 2022 Corporate Human Rights Benchmark finds that companies have elevated their attention to human rights over the past five years.

But looking at the companies that have improved, most of them have a board-level process to deal with human rights.

The top five scoring companies on the benchmark are Unilever; Wilmar International—a Singapore-based food processing company; PepsiCo, Hewlett Packard and Coles Group, the Australian retail group.

The benchmark assumes “due diligence” as a key indicator for signalling that a company cares about human rights. The report finds that a creditworthy 75% of those companies that increased their human rights focus most have a boardroom operation in place focused on the due diligence issue. Those companies that tanked on human rights—70%—appear to indicate little or no board involvement.

The benchmark report says: “Our assessment shows a strong positive correlation between companies’ scores on assigning board responsibility for human rights as well as responsibility and resources for day-to-day human rights functions, and overall HRDD [human rights due diligence] scores.

“Out of the companies that improved the most on HRDD, the majority…have a process in place at a board level to discuss and address human rights issues. Conversely, most of the companies that scored zero on HRDD do not have such a process in place.”

Supply chain issue

However, it’s not all good news in the report. Many companies appear to ignore their supply chains when it comes to human rights. The report finds only 33% put human rights in their supplier code of conduct, while only 11% actively work with suppliers on the topic. A dramatically smaller number of companies, 2%, actually assess human rights in their supply chains.

Stakeholder engagement on human rights also appears underwhelming, according to the report. While 66% of companies covered by the new report commit to engaging with stakeholders, 71% scored zero on their approach to “regularly” engaging with them.

There is disappointment at the World Benchmarking Alliance, producers of the report. It is 11 years since the UN launched its Guiding Principles on Business and Human Rights and, according to Namit Agarwal, the Alliance’s social transformation lead, “their impact on the ground is very limited”.

‘Corporate respect’

Agarwal backs the introduction of legislation around the world to mandate “corporate respect” for human rights. This levels the playing field, he adds, for multinationals, while a harmonised approach to business and human rights internally would ease the way even more. “It is high time that companies take serious actions to implement their commitments,” he says.

There was another message from the report. The Alliance says companies with an “effective” performance on human rights appear to be better prepared for climate change. The organisation found a correlation between a high human rights score and handling a “just transition”. And yet most companies that disclose action on climate change provide little information on human rights. A disconcerting result given the “road to climate hell” messages emerging from COP 27 in Sharm El-Sheikh.

There is action on human rights due diligence. For many jurisdictions it remains voluntary or non-existent, but the European Union is introducing new laws for mandatory human rights and sustainability due diligence, (and some of its states already have measures in place, for example France’s Loi de Vigilance, in place since 2017).

Meanwhile, a vigorous campaign is under way in the UK to persuade Westminster to follow suit. The UK may be slow to move; the government has much on its agenda. But, globally, progress—albeit painfully slow progress—is being made.