The human rights responsibilities of business in a changing world
The overall average score of companies on human rights is assessed as ‘limited’ and stands at 32/100. Compared to our 2012 survey, this score has decreased from 37/100. This decrease is likely due to two reasons. Firstly, human rights commitments appear to have largely stood still from companies located in industrialised countries. Secondly, Vigeo Eiris’ rating universe now integrates companies listed in emerging market countries where there are typically more limited regulatory requirements and appeals from civil society organisations towards businesses on their responsibilities for respecting human rights.
Less than 4% of companies (3.66%) have formulated comprehensive commitments, policies and processes, and therefore have achieved advanced performance for the integration of human rights principles and goals into their strategy, management practices and operations.
From a global perspective, corporate reporting on human rights is limited and reveals important disparities among geographic areas, countries and sectors.
» Geographical areas - Companies headquartered in Europe achieve a better average performance compared to their peers located in Asia Pacific, North America or Emerging Markets. 96.6% of the top 30 performers are headquartered in Europe, compared to 80% in our 2012 review.
» Countries - France ranks first, followed by Sweden, Spain, Finland, Denmark and Norway. Nine out of the top 10 countries are European ones, while laggards are mainly South Eastern Asian countries.
» Sectors - the Development Banks sector is the highest performer, followed by the Luxury Goods & Services and the Publishing sectors.
Overall, companies’ scores range from 5/100 to 85/100.
Similar to the findings of our 2012 review, this study finds that the respect and promotion of employees’ labour rights is the human rights thematic area that is the least addressed. One way that Vigeo Eiris assesses this is the ‘rate of information available’, which considers the level of transparency of companies on the theme, and the relevance and exhaustiveness of their reporting on questions under analysis. For employees’ freedom of association and the right to collective bargaining, the rate of information available is 34%. In comparison, for human rights in the supply chain, the rate of information available is 48%; for the respect of fundamental human rights in society it is 53%, and for non-discrimination it is 59%.
How companies’ approaches to human rights differ
For non-discrimination issues, specific and detailed commitments are given by 73% of companies. The majority of such commitments are related to gender, racial or religious discrimination, while only 12.4% concern people with sensitive medical conditions (e.g. AIDS).
Half of companies disclose tangible commitments that integrate human rights considerations in their supply chains, focusing mainly on issues such as employees’ health and safety, non-discrimination, child labour or forced labour.
Just under half of companies (47%) formulate exhaustive commitments about the respect and promotion of fundamental human rights in society. Among these rights, the
right most often referred to is the right to privacy. By contrast, a minority of companies explicitly refer to the rights of indigenous peoples, the right to personal security or to freedom of expression.
Finally, only 16% of companies clearly report that they respect employees’ labour rights, with a minority of companies specifically mentioning the non-discrimination of employee representatives or the effective exercise of trade union rights at work.
Alongside this, 67% of companies communicate on measures in place to deal with nondiscrimination; 48% provide details on processes to integrate human rights considerations into their supply chain; 37% report on measures adopted to address the respect of human rights in society, but just 10% of companies report on measures concerning the respect of workers’ freedom of association or the right to collective bargaining.
Best practices are seen among companies from sectors that are particularly exposed to potential risks of violations (e.g. Mining & Metals, Forest Products & Paper, Tobacco, Luxury Goods & Cosmetics and Telecommunications). These sectors have launched initiatives and set up tools to support businesses in the adoption of due diligence approaches that adequately assess, mitigate and remedy potential or effective human rights violations.
As in our 2012 survey, more than 20% of companies faced at least one human rights controversy. A third of companies were involved in controversies that are assessed as being of high or critical severity.
Controversies on human rights represent 10.9% of all controversies collected by Vigeo Eiris in its Equitics© database.
This study finds that 3% of companies were very proactive in solving the issue raised, by cooperating with stakeholders and implementing permanent corrective measures. However, 43% of companies did not react to allegations they faced.
The Banks sector faced the highest number of controversies, followed by the Food and Mining & Metals sectors.
Overall, more than one-third of the controversies occurred in the United States, where abuses are more frequently brought to court.
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