World Benchmarking Alliance reports lacklustre progress on social goals, as Labour Rights Investors Network seeks support and modern slavery benchmark launches.
Companies are “nowhere on track” to delivering the UN Sustainable Development Goals (SDGs), with a “significant gap” in action needed, according to Sofia del Valle, Engagement Lead for Social Transformation at the World Benchmarking Alliance (WBA).
Founded in 2018, the WBA analyses top companies progress in achieving the SDGs through public benchmarks on their performance. This week, the WBA published its latest Corporate Human Rights Benchmark and Gender Benchmark.
On the Gender Benchmark, Valle said it presented a “very grim picture”, with the overall score of 1,006 companies assessed being 17%. “Only two companies scored above the 50% mark. Most companies are stuck at the beginning of the road [on gender].”
Further, Valle said 12% of companies scored zero across all indicators and in 44% of the companies, women are underrepresented across all levels of leadership. Only three companies have gender balance – 40% to 60% of women across all levels of leadership.
On top performers in the benchmark, Valle said what set them apart from other companies was a public commitment to gender equality and addressing unpaid care. Italy-based Eni and US-based HPE were the only companies in the benchmark to score a 50-60% score band. 271 companies in the benchmark scored 0-10% including household names Netflix and SHEIN.
The Corporate Human Rights Benchmark, which assessed 55 major apparel firms such as Adidas and Kering, showed some progress compared to previous benchmarks, with 69% having improved their score since 2018 on key human rights indicators.
WBA’s research, however, showed the industry still failed to fully protect workers’ rights, with more than 60% of companies scoring less than 20/100 points on the human rights indicators, and 38% scoring less than 20/100 on the gender equality indicators.
Further, apparel companies were found to have high expectations for their suppliers, but these were not backed by responsible purchasing practices or supply chain mapping.
The research found that 94% of companies place expectations on their suppliers regarding human rights and/or gender equality, but less than a third of these companies take actions that set suppliers up for success, such as avoiding short notice requirements and delayed payments, mapping supply chains, or providing targeted support on gender equality.
Of all apparel companies assessed, only 12 companies (22%) disclose evidence of activities that support their suppliers in the payment of a living wage. When it comes to corporate commitments, only 7 companies (13%) disclose a timebound target for the payment of living wages across their supply chains or include living wage requirements in their contracts with suppliers.
Union network for investors
The work of the WBA comes as the new Labour Rights Investors Network, which will seek to provide investors with actionable information they need to engage on labour issues and uphold human rights and mitigate workplace risks, held an introductory event this week.
The Network, which is being led by the Global Unions’ Committee on Workers Capital (CWC), plans to act as an education and exchange platform and a place to connect on issues related to freedom of association and collective bargaining. It will compose of investors who commit to integrating labour rights into their stewardship practices.
Labour rights is rising up the agenda for investors with UK-based asset manager CCLA launching its first annual modern slavery benchmark this week, ranking which of the UK’s largest listed companies are contributing most to ending modern slavery in their operations and supply chains. Encouragingly, it found 26% of companies had found modern slavery in their supply chain and had disclosed it publicly. But only one company disclosed providing remediation that was satisfactory to victims.
Recent data published by the International Labor Organization and the Walk Free Foundation in their Global Slavery Index estimates that 50 million people worldwide are in a state of modern slavery with 28 million of those in forced labour.
Further, nearly two-thirds of all forced labour cases are associated with global supply chains with most forced labour occurring in the lowest tiers of supply chains, such as the extraction of raw materials and in production stages.
The UK annually imports US$26.1 billion products at-risk of being made using forced labour including US$15 billion of electronics and US$10 billion in garments and textiles.
Dr Martin Buttle, Better Work Lead at CCLA, said: “Our intention is that the benchmark, through regular repeated assessments of companies on their modern slavery commitments and practices, will provide an accountability mechanism by allowing investors and other stakeholders to assess whether companies are effectively managing the business risks associated with modern slavery.
“We also believe it will provide a vehicle for companies to learn and to share examples of good practices and create a mechanism to leverage business competition to drive improvement.”