Interest in the impacts of big business on human rights and demands for greater transparency have grown over recent years. The Corporate Human Rights Benchmark (CHRB) is the first-ever ranking of the world's largest publicly listed companies on their human rights performance. Following a methodology developed over two years and in consultation with over 400 companies, industry associations, investors, governments, civil society representatives, academics and lawyers, the final scores of its first pilot will be available in November 2016.
Whilst many have welcomed the initiative, a number of questions arise for the business community: Is this the beginning of the end or only the end of the beginning on company benchmarking? Will demands for transparency and accountability from companies lead to further human rights legislation? Will the CHRB have the desired impact for stakeholders? What are the likely implications for those coordinating their company’s response to developments in the business & human rights arena?
These were some of the topics discussed at the RSA on the 22nd June by a highly engaged group of mainly corporate professionals. The session was moderated by Manny Amadi, CEO of C&E Advisory, and co-led by Richard Morgan and Elodie Grant-Goodey**.
Amidst the debate and questioning, five important observations emerged:
1. The benchmark may well trigger a productive dialogue
The clear perception is that we are only at the end of the beginning. Businesses can expect more benchmarks and other ranking frameworks in future. And despite assurances from the creators of the CHRB, the benchmark will require considerable investment of time by those responsible for coordinating their company’s response and information provision.
However, the CHRB may, in time prove to be valuable in bringing human rights to the forefront of corporate consciousness by acting as a “burning platform” for some, and pointing to role models for others. It may increase questioning and help trigger a cultural shift which will in turn drive change within businesses and through their supply chains. The UK’s Modern Slavery Act was cited as already acting as a catalyst for enhanced business engagement on the human rights agenda. CHRB could similarly support the evolution of this important agenda.
2. But data never tells the whole story
It is complex to quantify the risks inherent in human rights and a large amount of data is requested by the CHRB producers in their attempt to create the benchmark. However, data analysed without an understanding of business culture and context will not have the desired impact. It is therefore important not to let the data alone tell the story. Corporates will have to be proactive in framing their story through effective communication. As is the case in the tax transparency arena, country-level reporting will be most relevant for companies wishing to frame their narrative and will enable corporates to set the data within a specific context.
3. Benchmarking presents a number of pitfalls
An additional concern about benchmarking is that it does not give corporates sufficient opportunity to explain how they understand risk, the prevalent culture within the organisation and also set the context in terms of right holders.
Benchmarking can also lead businesses to a false sense of security and encourage complacency for those organisations that overly ‘believe the greens’ – that is to say, assume that things that are ranked ‘green’ are fully and permanently in good order.
4. There is room for improving the CHRB
One of the criticisms of the CHRB is that it may not effectively support consumers or investors with decision making.
Media coverage seems to inform the score to a great extent but this can be misleading as it can be unsubstantiated and in some cases businesses are not allowed to comment.
Privacy, data protection and diversity are becoming key issues for corporates and should be added to the scope of CHRB to make the approach more relevant.
Whilst corporates have increasingly tried to identify and work with what is deemed to be most material within their business context, the CHRB approach has a much broader scope and fails to prioritise material issues for each sector.
Some respected NGOs had not yet heard about the benchmark and there is a risk that this could affect the credibility of the initiative.
5. Corporates will have to deliver far more than a benchmark submission
Cultural change is the best way to deliver and sustain positive impact. To enable improvements in learning and to support cultural change, some companies are asking NGOs to perform a gap analysis and getting in the habit of responding to queries from stakeholders within a set timeframe, as with media queries. Others are offering training to their employees to ensure there is a practical understanding of what human rights means within the context of the company’s operations.
It was also noted that corporates will need to show leadership and ensure they do not solely focus on the issues that might be in the media. They will also have to train their Boards to ask the right questions – as is the norm in matters related to for instance, health and safety.
About the Breakfast Dialogue Series
C&E’s Breakfast Dialogue series are free, by invitation, informal discussions held over a light breakfast and involving a dozen or so senior participants from corporate, NGO and public sector backgrounds. They are highly interactive, informed discussions in which participants share their perspectives, experiences and insights - under Chatham House rules. Guests for this particular session were drawn mainly from leading companies including, HSBC, Sky, Statoil, Jaguar Land Rover, Aviva, CBRE, M&S, John Lewis, RBS, Tui Group, and Oxfam.
* Richard Morgan is Head of International & Government Relations, for AngloAmerican, one of the world’s largest mining companies. Prior to this role, Richard was the Director of Communications and Public Affairs for Africa, the Middle East and Turkey for Unilever. He joined the private sector following a distinguished career as a diplomat. Richard began his career at the British Embassy in Tokyo as a Commercial officer. Later he held a position at the Communications/Media team at the FCO in London, followed by working as First Secretary at the British High Commission, South Africa (1995-2000) and in the Middle East and North Africa Department. He has held the role of Head of Public Diplomacy at the Foreign and Commonwealth Office and has also served as Head of Press and Public Affairs in the British Embassy in Paris. Richard holds a BA in Modern Languages from the University of Oxford.
** Elodie is a new associate to C&E Advisory and brings to the team wide experience in societal issues management. She is a senior communications and external affairs professional with 20 years' international experience in external issues management, societal risk assessment, corporate responsibility, government and civil society relations, external and internal communications. Elodie was formerly BP's Head of Societal Issues and Relationships, leading social policy management, social risk assessment, advocacy and stakeholder engagement. She also worked as Head of Communications for BP's Exploration & Production business and as Communications and External Affairs Director for BP's North Africa business (Algeria/Libya). Previously, Elodie worked for the BBC World Service and volunteered for a number of human rights NGOs. She played a key role in BP being voted the best in responsible investor communications in 2004.