The World Benchmarking Alliance (WBA) published The state of play on business and human rights (November 2024). This report provides an overview of the trends and insights from five iterations of the Corporate Human Rights Benchmark (CHRB) from 2018 to 2023, which assesses the human rights disclosures of some of the largest global companies across five sectors identified as high-risk for their human rights impacts. These sectors are food and agricultural products, apparel, extractives, ICT manufacturing, and automotive manufacturing.
Human Level’s Take:
- While 64% of the companies assessed have shown measurable progress in implementing the UN Guiding Principles on Business and Human Rights (UNGPs), performance remains uneven.
- Companies score highest on implementing policy commitments to respect human rights and are increasingly integrating human rights oversight at the highest level of leadership, with board-level accountability.
- And many are conducting risk assessments, with those identifying human rights risks rising from 30% to 42% (operations) and 45% (supply chains). However, meaningful action is stagnant. Only 18% of companies demonstrate how they address significant risks in their operations (up from 16% in five years), and supply chain efforts remain at 16%.
- A key finding of the report shows that embedding human rights respect in management systems and culture leads to improvement in areas such as human rights due diligence (HRDD), access to and provision of remedy, and the mitigation of human rights risks.
- Mandatory human rights due diligence legislation is also linked to companies outperforming and improving faster across all components of HRDD.
- However, companies’ grievance mechanisms fail to align with all of the UNGPs eight effectiveness criteria and progress on implementing responsible purchasing practices is poor.
- CHRB recommends that companies move beyond commitments and embed them through assigning senior-level and day-to-day responsibility for human rights, building knowledge and capacity by training relevant functions, and incorporating human rights considerations into the selection and evaluation of business relationships. Companies can also ensure that grievance mechanisms meet the effectiveness criteria under the UNGPs, applying all eight criteria comprehensively and not selectively focusing on the easier ones. In addition, they can review their purchasing practices to ensure they are not punitive on suppliers and work with suppliers to meet their expectations.
Some key takeaways:
- The state of play of business and human rights: 64% of the companies assessed have shown measurable progress in implementing the UN Guiding Principles on Business and Human Rights (UNGPs). However, company performance across the CHRB’s measurement areas remains uneven. Companies score highest on implementing policy commitments to respect human rights and are increasingly integrating human rights oversight at the highest level of leadership, with board-level accountability being one area where companies have improved the most. Another area of clear progress is risk and impact identification, with those identifying human rights risks rising from 30% to 42% (operations) and 45% (supply chains). However, meaningful action is stagnant. Only 18% of companies demonstrate how they address significant risks in their operations (up from 16% in five years), and supply chain efforts remain at 16%. In short, companies need to move beyond commitments and prioritise embedding these principles in their daily operations in a meaningful and impactful way, as well as implementing concrete actions to address impacts on workers and communities.
- Embedding human rights is the foundation and catalyst for meaningful action: The findings show that progress on embedding human rights in management systems and culture is a strong predictor of improvements across other aspects of human rights respect. Nearly half of the variance in improvements in areas such as HRDD, access to and provision of remedy, and the mitigation of human rights risks can be linked to companies’ improvement on embedding human rights in their operation. The report recommends that companies dedicate resources to ensure the comprehensive embedding of human rights within company culture and management systems. Key levers for doing this include assigning senior-level and day-to-day responsibility for human rights, building knowledge and capacity by training relevant functions, and incorporating human rights considerations into the selection and evaluation of business relationships. The report also highlights how companies based in countries with mandatory HRDD legislation (mHRDD) consistently outperform and improve faster across all HRDD steps. For instance, companies based in countries with mHRDD are taking meaningful action on their supply chain human rights risks and impacts. The report references France, Germany, and Japan. In contrast, only 14% of companies in countries without mHRDD are acting on their supply chain risks and impacts.
- Grievance mechanisms and responsible purchasing are areas of concern: The report finds that grievance mechanisms are becoming more legitimate, accessible and rights-compatible, but they are lacking in transparency, equitability and are not based on engagement with stakeholders. This means that these mechanisms are not aligning with the eight effectiveness criteria under the UNGPs. The report also finds that 163 out of the 181 companies assessed on purchasing practices made no progress or even regressed over the past five years. This is despite the fact that over 60% of the allegations of severe adverse impacts the CHRB recorded between 2018 and 2023 pertained to companies’ supply chains, and poor purchasing practices is one of the root causes of supply chain human rights risks. The report provides several recommendations for companies. In relation to grievance mechanisms, companies should ensure that they meet the effectiveness criteria under the UNGPs, applying all eight criteria comprehensively and not selectively focusing on the easier ones. Establishing mechanisms based on engagement and dialogue is particularly important to ensure that they address the needs of affected stakeholders and that they feel confident in using them. In relation to responsible purchasing practices, companies should move beyond setting expectations and incorporating them into contracts. Actively supporting suppliers through and practicing responsible purchasing is key.
