Business And Human Rights: Corporate Human Rights Benchmark 2020 Signals The Need For Businesses To Do More

• Published date: 21 December 2020
• Subject Matter: Corporate/Commercial Law, Government, Public Sector, Corporate and Company Law, Human Rights
• Law Firm: Mayer Brown
• Author: Mr Sam Eastwood, James Ford, Libby Reynolds, Audrey L. Harris, Nicolette Kost De Sèvres, Alexander W. Burdulia and Mark Uhrynuk

In November 2020, the World Benchmarking Alliance published the 2020 Corporate Human Rights Benchmark ("CHRB"), which ranks the human rights performance of 230 companies.¹ The CHRB has been increasing in prominence since its inception in 2017. The publication of the 2020 CHRB comes at a time when investors, shareholders and lenders are increasingly looking for meaningful data to measure the Environmental, Social and Governance ("ESG") performance of companies - particularly "Social" factors, where performance has traditionally been harder to measure.

Benchmarks such as the CHRB can also have internal business benefits: they represent an independent assessment of a company's human rights programme and areas for potential improvement; and provide an opportunity for the legal and compliance functions to highlight the growing importance of human rights and to make the case for programme reinforcement.

Companies may well take issue with the CHRB findings. Certainly, benchmarks such as the CHRB are not conclusive and do have their limitations - companies that report fully and apparently meet CHRB expectations may not in fact be adequately addressing human rights abuses occurring in their operations or supply chain. Equally, some companies may not report publicly on their human rights programme in as much detail as others, but may in fact have a better programme than appears at face value.

Nevertheless, increased regulation, investor and other stakeholder expectations will mean that businesses will have to report in ever more detail on their human rights programmes - and in particular their human rights due diligence processes - which will then be subjected to increasing external scrutiny, commentary and benchmarking.

How does the CHRB rank companies?

• The CHRB assesses the human rights disclosures of 230 global companies across certain sectors, being: agricultural products apparel, extractives, ICT manufacturing and, for the first time automotive manufacturing. The CHRB is likely to develop overtime to encompass more sectors.
• The CHRB Methodology focuses on companies' policies, processes, practices, as well as how they respond to serious allegations. The Methodology is grounded in the United Nations Guiding Principles on Business and Human Rights ("UNGPs") (see more on the UNGPs in our previous briefing) and covers over 80 indicators. This year, the CHRB methodology was slightly altered to take into account the impact of the COVID-19 pandemic on many...