The World Benchmarking Alliance finds most companies are not well placed to address the major sustainability challenges in a ‘just or equitable’ way.
The World Benchmarking Alliance (WBA) has launched its Social Transformation Baseline Assessment of the world’s most influential companies, representing multiple sectors, including food and agriculture, technology and heavy industries, such as oil and gas, automotive and electric utilities.
These companies have a key role to play in addressing the major sustainability challenges of our time, says WBA, ranging from fighting climate change to ending the loss of biodiversity. However, based on the WBA assessment, the majority of these companies risk ‘leaving people behind’ in these transformations.
WBA found that out of the 1,000 companies assessed, only 1% meet the majority of the fundamental expectations of WBA’s Core Social Indicators (CSIs).
These 18 indicators measure companies’ responsibility to respect human rights, their role in providing and promoting decent work, and their ethical conduct in areas such as lobbying and taxation.
WBA’s findings suggest that with eight years to go until the UN’s 2030 Sustainable Development Goal deadline passes, companies are not well placed to address the major sustainability challenges in a ‘just or equitable’ way, WBA says.
The report highlights that while the overall picture is ‘bleak’, WBA says, there are some examples of good practice.
‘A sobering picture’
Dan Neale, Social Transformation Lead at WBA, said: “WBA’s research paints a sobering picture, with 99% of companies failing to demonstrate they truly value people.
“Businesses are, overall, on course to entrench, rather than end, the social inequalities that pose a global systemic risk and their inability to put people at the heart of their thinking also undermines efforts to address the risks of climate change and biodiversity loss.”
At least 500 of the 1,000 companies assessed scored ‘disappointingly low’ – between 0 and 5 points, out of a possible 20. Providing and promoting ‘decent work’ is one measurement area where companies perform particularly poorly.
WBA’s research paints a sobering picture, with 99% of companies failing to demonstrate they truly value people.
Decent work is defined by basic fundamentals such as health and safety, living wages and working hours. WBA says its findings suggest a ‘big difference’ between company approaches to these issues, while most companies commit to health and safety, only 4% of companies disclose they have achieved paying their own workers a living wage or have targets to pay them.
51 companies can demonstrate evidence of activities, such as contract requirements, that support payment of a living wage in their value chains. These include household and personal products giant, Unilever, which is highlighted in WBA’s report for its efforts to secure a living wage beyond its own employees.
Going further
Human rights due diligence – where risks and impacts to people are identified, assessed and acted upon – will be a ‘critical tool’ to drive a positive post pandemic recovery and support a just transition to sustainable economies, WBA says.
WBA data suggests that more than three quarters (78%) of the 1,000 companies scored zero on all three human rights due diligence indicators, suggesting ‘many fail to show they can understand and manage their social risks and impacts’, WBA says.
Even when companies publicly commit to respect human rights – and 550 in the sample have – far fewer are able to evidence this commitment through tangible action.
Dan Neale continues: “We’ve found a huge gap between what companies are doing and what they must do to help address inequality and ensure a just transition to a sustainable future.
“The findings clearly show voluntary approaches are insufficient, especially around human rights. Now we aim to incentivise and mobilise companies to close that gap as the 2030 deadline of the SDGs approaches.”
WBA has launched the Collective Impact Coalitions (CICs) to bring together multiple stakeholders including investors, civil society organisations, business platforms and academics, who have come together to develop solutions for achieving a system transformation.
The inaugural human rights CIC will aim to propel action for human rights due diligence, and help companies to make those the norm for businesses.