Developments and commentary in and around the ESG investment space.

Corporate Human Rights Performance For 2020
The latest annual report on corporate human rights activity has found too many conglomerates wanting, in spite of mounting consumer pressure and risks to reputation. The fourth edition of the Corporate Human Rights Benchmark (CHRB) published yesterday found that nearly half of the 230 global companies assessed are not meeting UN business guidelines on human rights. Assessed for the first time this year, the automotive industry made the worst debut of any sector, with a number of state-run Chinese manufacturers being scored dismally by the World Benchmarking Alliance (WBA), the organisation behind the research.

Established car makers such as Ford Motors, Groupe PSA (owner of Peugeot) and Daimler lead the sector scoring between 30 per cent to 42 per cent, while Chinese firms, including Great Wall Motors, SAIC Motor, Chongqing Changan and FAW Car Company scored under 1 per cent, according to the alliance. No global auto manufacturer scored above 50 per cent, and half of the 30 companies assessed scored below 10 per cent, the report found.

In a year where the pandemic is exposing corporate governance practices that can make or break reputations, progress is slow.

Marte Borhaug, global head of sustainable outcomes at Aviva Investors, a founding member of the group behind the research, said that too many of the largest global companies are failing investors, “especially around due diligence in their supply chains.”

The 2020 benchmark considered 225 serious allegations of human rights abuses that were marked on their severity. Out of 229 companies, 104 had at least one serious allegation connected to them. The chart below indicates the types of allegations considered:

After the alliance released its 2019 findings, 95 companies were targeted by a joint statement from 176 investors for scoring zero on all human rights due diligence indicators. A year on and 79 of these firms are still at zero, the group said.

“We’re sensing a real reluctance from the laggards to improve. When we look at the companies assessed for the first time this year, 70 per cent failed to score any points on human rights due diligence,” Camille Le Pors, lead at the WBA said.

The full 2020 benchmark, including a sector breakdown and individual company scorecards, is published here.