Sustainability Pays Off

March 18, 2017

 Image Credit: CHRB

 M&S, Unilever Lead on Human Rights; 14:1 ROI for Food Waste Reductions 

This week, new research further underscored the business case for sustainability: A report by Pure Strategies revealed that increased corporate spending in 2016 resulted in gains of $5-8 billion; research on behalf of Champions 12.3 found that companies who reduce food waste receive a 14:1 return on investment; and an ING report described how the adoption of a circular model for water usage could save 11 percent of global water demand and safeguard fragile agricultural sectors in water-stressed regions. Meanwhile, M&S, Nestlé and Unilever topped a new Corporate Human Rights Benchmark; a report by the NYU Stern Center for Business and Human Rights identified a gap in crucial social metrics for investors to identify corporate sustainability leaders; and THRIVE Farmers shared how third-party certification and collaboration with similarly certified companies can help organizations maximize impacts. Enjoy your weekend!

 

The first-ever public ranking of corporate human rights performance launched today, seeking to highlight the moral and commercial advantages for companies with a strong human rights record.

BHP Billiton, Marks & Spencer, Rio Tinto, Nestlé, Adidas and Unilever were identified as some of the top performers, while Costco Wholesale, Macy’s, Grupo Mexico and Yum! Brands were among the brands with the lowest scores.

The result of a two-year consultation with over 400 companies and organizations, the Corporate Human Rights Benchmark is supported by 85 investors, accounting for $5.3 trillion in assets under management. The Benchmark is led by investors and non-profit groups and analyzes 98 companies from three high-risk industries — agricultural products, apparel and extractives — but will grow year-on-year to cover the world’s 500 largest listed enterprises.

“Competition is a beautiful thing when it is used to do good. For the first time, we have a public measure of companies’ human rights performance which will focus attention in the boardroom on their performance versus other companies and allow investors to ask the right questions. More transparency and a desire to improve in the rankings will spark a race to the top in corporate human rights,” said Mark Wilson, Group Chief Executive Officer of Aviva.

The Benchmark examines companies’ policies, governance, processes, practices and transparency, as well as how they respond to serious allegations of human rights abuse. This is done by scoring the companies on 100 indicators across six measurement themes. A small number of companies emerged as leaders scoring between 55 – 69 percent, but the results skew significantly to the lower bands. A clear majority, 63 out of 98 companies, score below 30 percent.

Investors are encouraged to use the CHRB’s results in their analysis of companies and investment decision making, including the identification of key human rights risks to discuss with management. Successful companies will have lowered their exposure to potential legal, reputational and financial risks that could arise from human rights abuses. The ranking also paves the way for governments to use a smart mix of regulation and incentives to enhance transparency and minimum standards of corporate behavior to make the business case for the respect of human rights.

Companies in the middle and lower bands of the Benchmark should demonstrate their respect for human rights and seek to emulate the best practice of industry leaders. Companies that have yet to start implementing their human rights responsibilities have no time to lose, because any inaction runs a high reputational risk with investors, customers and prospective employees.

“This first Benchmark is a baseline. In the future, we want to see companies move up as they respond to increased public scrutiny and engagement from investors. Inaction runs a high reputational risk and low scoring companies should act decisively, learn from leading practices and rapidly improve,” said Vicky Dodman, Chief Executive of the Corporate Human Rights Benchmark.

The Benchmark is based on publicly available information from company websites, documents and additional company input to The Benchmark Disclosure Platform. As such, some companies may have non-public human rights, policies, processes and practices which would not be taken into account in the benchmark.

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