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Companies fail to ensure human rights and decent work

The World Benchmarking Alliance (WBA) has today published its first Social Benchmark, assessing the world’s 2,000 most influential companies on their responsibility in meeting society’s fundamental expectations towards three measurement areas – respecting human rights, providing decent work, and acting ethically. Alarmingly, 90% of the assessed companies are not even halfway to meeting fundamental societal expectations on human rights, decent work and ethical conduct. The world’s 2,000 most influential companies include some of the largest apparel and food brands and generate revenue equivalent to 45% of global GDP. They employ 95 million people directly and hundreds of millions more indirectly through their value chains.


Companies should commit to paying a living wage and preventing excessive working hours

There is a mismatch between what companies disclose on decent work and society’s expectation of them: over 60% of companies have some disclosure on decent wages and over 45% have some on working hours. However, only 4% of companies commit to or are currently paying their employees a living wage, and only 3% have a working hours policy that complies with International Labour Organization standards.


Governments can help by implementing policies that ensure regular reviews and adjustments of the minimum wage to align with living costs. They can also provide support for small and medium enterprises to promote collective bargaining and implement complementary social policies to reduce the burden of living costs on low-wage workers, especially in supply chains.


Companies should be transparent in lobbying to avoid undue political influenceOnly 11% of the 2,000 most influential companies have established a policy that publicly sets out its lobbying and political engagement approach. A mere 5% of companies assessed in the benchmark disclose data on their lobbying expenditures.


To maintain credibility, companies must ensure that their publicly stated social sustainability strategies are coherent with their lobbying activities behind the scenes.


Companies must engage with affected stakeholders to help improve human rights and decent work practices

Only 9% of companies communicate examples of how they engage with affected or potentially affected stakeholders, including employees, trade unions, suppliers, civil society and local communities. Companies that engage with affected stakeholders perform better on average across every indicator in the benchmark, including commitments to respect human rights and provide decent work through respecting worker health and promoting equality.


Regulation, guidance and pressure are essential for driving change

Companies headquartered in countries with human rights legislation score nearly 60% higher on human rights due diligence (HRDD) than those in countries without such regulations. Still, only 6% of companies have fully implemented them.


Two trends emerge among the 6% companies that fully meet the HRDD indicators. Firstly, they are primarily from regions with robust government guidance and regulatory frameworks on human rights, namely Europe and parts of East Asia. Secondly, they tend to operate in high-impact sectors that have been subject to greater public scrutiny and are better equipped with detailed HRDD tools and guidelines.


Governments can set minimum legal standards of behaviour expected from companies of all sizes and operating contexts on HRDD to prevent and address their human rights risks and impacts in alignment with the UN Guiding Principles on Human Rights, while investors and the civil society should continue applying collective pressure on low-scoring companies and advocating for robust due diligence processes.



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Oct 13

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