Benchmarking Corporate Human Rights and Gender

Our key takeaway: The World Benchmarking Alliance (WBA) has come back with its first Corporate Human Rights Benchmark (CHRB) since 2017… and the results are mixed. While many companies have made at least some progress since the previous benchmark, “the overall pace of improvement remains too slow.” The assessment highlights “the failure of many companies to involve rightsholders effectively and meaningfully throughout key parts of their process to respect human rights,” a fundamental part of conducting meaningful human rights due diligence. The WBA’s gender benchmark, in its second year, likewise highlights mixed progress. While many companies are putting in place policies and grievance mechanisms for issues like harassment and violence, they are failing to disclose the effects in practice. In addition, companies are treating issues like parental leave as a benefit rather than a right. Across both the CHRB and gender benchmark, companies are setting high standards for their suppliers on human rights and gender equality, and then undermining them by continuing to use harmful purchasing practices. Yet the CHRB demonstrates that change is possible: 12 companies have made significant progress, transforming their practices over the past six years. Other companies can reach this level of performance through five core “calls to action”: (1) Ensure allocation of resources, train all employees on human rights, identify and assess human rights risks and improve the quality of grievance mechanisms. (2) Clearly assign responsibilities for human rights and offer tailored human rights training for different roles, “with companies that do both outperforming their peers by 150%.” (3) Prioritise consultation with affected people, a fundamental need to ensure that their input feeds company practice on the human rights issues that affect them. (4) Relatedly, “grievance mechanisms need to be a two-way street and involve rightsholders in the entire process, in line with the UNGPs.” (5) Ensure “an enabling environment and adequate support” for suppliers to implement the standards companies set for them on human rights and gender equality, through responsible purchasing practices and supply chain mapping. Investors can support progress in these areas by engaging with companies on these topics at early stages of assessment and investment.‍

The World Benchmarking Alliance (WBA) released its 2023 Corporate Human Rights Benchmark (November 2020) and 2023 Gender Benchmark (November 2023):

• The pace of change is slow: The 2023 Corporate Human Rights Benchmark (CHRB) assesses 110 large apparel and extractives companies on their corporate human rights performance. Between 2023 and the previous benchmark in 2017, WBA finds that there is still some ways to go for many companies. For example, “[m]ost companies fail to include rightsholders in their human rights due diligence processes. While 61% of companies have a part of a human rights due diligence process in place, only 27% engage with rightsholders during this process.” What’s more, although a majority of companies have grievance mechanisms, few companies are meaningfully including rightsholders in the development of them. In addition, companies are still setting high standards for their suppliers, while undermining these standards through harmful purchasing practices.
  

• But leading companies demonstrate “transformative change”: The CHRB reports that a group of 12 companies have made “remarkable progress,” increasing their score “by more than five times the average and improved their sector ranking by over ten places (out of 55), demonstrating the potential for transformative change.” There are four key practices they have implemented: First, “they have assigned senior-level responsibilities for human rights and structured the day-to-day management of human rights.” Second, they have improved human rights due diligence (83% of these companies now have HRDD in place, compared to 8% in the last benchmark). Third, they have “built internal capacity, with the share of companies providing training on human rights rising from 25% to 67% in the last five years.” Fourth, they have established grievance mechanisms for external stakeholders and implemented measures to prevent retaliation. While “[o]nly 25% of the companies disclosed these mechanisms and measures in their first iteration. Today, 83% of companies disclose information on external grievance mechanisms and 92% on measures against retaliation.”
  

• For gender, “we still have a long way to go”: The WBA’s second gender benchmark ranks 112 of large apparel and food and agriculture companies “on their responsibility to drive and promote gender equality in their entire value chain.” In addition to this deep dive, the benchmark assesses 1,006 companies from ten sectors on gender equality efforts. The benchmark has five top findings. First, “[p]erformance on gender equality is dismal,” with a 17% average score across companies. “[I]n most companies, women are not adequately represented in leadership and their concerns are left unheard.” That said, the second finding is that the top 100 companies are making progress by setting the tone at the top and providing childcare and family support. Of these top companies, 74% made a public commitment to gender equality and women’s empowerment compared to only 20% of the bottom 906 companies. Similarly, 59% of the top companies provide childcare and family support compared to only 19% of the other companies. Third, companies continue to view parental leave as a benefit rather than a human right: “Only 36% of the 1,006 companies assessed disclose a parental leave policy, and the majority of these policies do not apply globally. Fewer companies provide details on the number of weeks offered as maternity and paternity leave, and in many cases it is unclear whether this leave is paid.” Fourth, although two-thirds of companies have policies prohibiting violence and harassment at work, only 4% publish information about the remediation process. Per the WBA, “[t]his is a concerning gap, because simply prohibiting something that is as deeply engrained in society as violence and harassment is not enough to ensure its eradication.” Fifth, mirroring the finding in the CHRB, suppliers are being held to high standards on gender equality, but are challenged to achieve these standards by companies’ own purchasing practices.