We take more than 3,000 companies and analyse their human rights policies. The result? Not very encouraging. But fortunately there are those who stand out for the right reasons.
Are the world's largest companies doing enough on the subject of human rights, publicly declaring their responsibilities and the processes they have put in place to respect them and prevent abuses? The answer, unfortunately, is "not yet": this is demonstrated by a monumental analysis carried out by Vigeo Eiris on more than three thousand companies.
Corporate policies on human rights are scored on a scale of 1 to 100: 0 to 29 is considered "poor", 30 to 49 "limited", 50 to 59 "strong" and 60 to 100 "advanced". Taking the average across all the cases analysed, the result is a resounding failure: companies stop at a meagre 32 out of 100. This is even worse than the previous edition, dating back to 2012, in which they reached at least 37/100.
The main reason for this decline, analysts explain, lies above all in the fact that the vast majority of human rights commitments have been made in industrialised countries, whereas in this edition the sample was expanded to include emerging countries, where regulations are often less stringent. In the top 30, unsurprisingly, European dominance is overwhelming.
| Name | Country | Sector | Score |
|---|---|---|---|
| Red Electrica Corporacion | Spain | Electricity and gas | 85 |
| E.on | Germany | Electricity and gas | 81 |
| Groupe PSA | France | Automobiles | 81 |
| Umicore | Belgium | Chemicals | 79 |
| La banque postale | France | Banking | 79 |
| Norsk Hydro | Norway | Metals and mining | 78 |
| Engie | France | Electricity and gas | 77 |
| Carrefour | France | Supermarkets | 76 |
| L'Oreal | France | Cosmetics and luxury goods | 76 |
| Gas Natural Sdg | Spain | Electricity and gas | 75 |
"Human rights", however, is an extremely broad definition. Looking more closely, it emerges that 67 per cent of companies communicate the measures they have put in place to combat discrimination, 48 per cent make public the processes for integrating human rights protection throughout the entire supply chain, while only 10 per cent cite measures for respecting workers' freedom of association or the right to collective bargaining.
Fewer than 4 per cent of companies (to be precise, 3.66 per cent) have formulated global commitments, policies and processes, successfully integrating human rights into their strategies, operations and management. In general, reporting on human rights is limited, with marked differences depending on geographical areas, countries and sectors. Best practices come above all from traditionally higher-risk activities: mining, forestry and paper, tobacco, luxury goods and cosmetics, and telecommunications.
More than two in ten companies among those analysed in the study have faced at least one human rights controversy. Analysts tracked 1,122 controversies, half of which concern violations of fundamental rights such as privacy, private property, freedom of expression, and the rights of indigenous peoples, among others. Eleven per cent are linked to labour issues, 21 per cent to discrimination and a further 17 per cent to abuses along the supply chain. More than one in three cases comes from the United States, where taking companies to court is fairly common. The most sensitive sector is banking, primarily due to issues related to financed projects; food and mining follow closely behind.
What is striking is that, faced with accusations that can be very serious, in 43 per cent of cases there was no reaction whatsoever. Only three companies in every 100 proved proactive, consulting their stakeholders to find a solution.
The study was carried out by Vigeo Eiris, one of the most important social and environmental rating agencies in Europe. It is a monumental survey involving 3,189 companies belonging to 38 different sectors, headquartered in thirty-five countries across Europe, North America, Asia-Pacific and emerging markets. The survey period covers exactly two years, from September 2014 to September 2016.
The report does not cover the field of human rights in its entirety, but focuses on the four key topics of social responsibility:
But how does one go about giving a company a score? Analysts chose three dimensions. First, the lines of conduct established by companies, assessing how transparent and comprehensive they are and how closely the company itself monitors compliance with them. On the other hand, the consistency and efficiency of the measures adopted for the respect of human rights (processes, monitoring, internal controls, reports on the resolution of any issues). Finally, results, meaning quantitative data, stakeholder opinions, and responsiveness in the face of criticism or legal action.
How can a genuine change of course be triggered? Every citizen can play their part by making conscious choices about how they spend and invest their money. The world of sustainable investment, which integrates performance analysis with that of environmental, social and governance (Esg) factors, is now increasingly vast — and increasingly diverse and accessible to all. The second pillar of the triad, that of society, concerns precisely the virtuous relationship between a company and its workers, the local area and the community. And studies show that sustainability is the best choice for the planet, for people and for financial performance too.