This is an update about the Corporate Human Rights Benchmark, or CHRB, which promises to be the biggest such project in 2016 in this fast-evolving space.

Several weeks ago, I had written about CHRB’s pitch to gauge businesses globally for “their human rights policy, process and performance, harnessing the competitive nature of the markets to drive better human rights performance", and that by June 2016, CHRB, a collective of several organizations from the investment and human rights spaces, hopes to issue a pilot profile of 100 companies using its initial benchmark.

The list of these companies is now out and I urge you to take a look. They currently number 108 to ensure, says CHRB, that “we have at least 100 publically listed companies for the ranking". Three Indian companies, Coal India Ltd (CIL), Oil and Natural Gas Corp. Ltd (ONGC) and Hindustan Unilever Ltd (HUL) are part of the list of 108.

Of the current total, 43 are from the extractives industry (hence Coal India and ONGC), 34 are in the agricultural products business (that’s how Hindustan Unilever makes the cut), 23 are in apparel, and eight have interests in both apparel and agricultural products. CHRB says it selected businesses by cross-referencing several criteria: market capitalization according to Financial Times’ FT 500 list; ensuring that a company derived a minimum of 20% of revenues from the industry segment into which it has been slotted; that, in case of dual slotting, a company would need to earn 15% or £1 billion from another industry covered by the benchmark process; a geographical mix to ensure “at least" six companies from each continent—for this spread and market capitalization parameters CHRB has used the Forbes Global 2000 list; this latter list has also been used to maintain balance between industries and to include top 10 companies based on market capitalization.

As I mentioned in my earlier column, by June 2017, the intention is to extend the reach to finance and engineering industries. By June 2018, the methodology is expected to be tweaked—CHRB calls it Methodology 2.0—with pharmaceuticals and the information and communication technology sectors added to the list. By then, the ranking is expected to reach 500 companies across several sectors.

CHRB is a collaborative effort of the Institute for Human Rights and Business and the Business and Human Rights Resource Centre, both based in the UK, along with Calvert Investments Inc. and Aviva Investors which provide core private sector input. Other partners are VBDO (The Dutch Association of Investors for Sustainable Development) and EIRIS, organizations that offer advisory for responsible investment. Representatives from these organizations form CHRB’s steering committee. Aviva Investors is currently the chair. The initiative was formally launched in 2013, the process of consultations took place the following year and shaping of draft parameters began in June 2015 and ended early last October.

According to CHRB, the current industry segments “take into account… the severity of human rights impacts of the industry, the extent of previous work on human rights in the industry, including through industry-specific initiatives, the existence of other human rights-related benchmarks covering the industry, and the global economic significance (in terms of size) of the industry".

CHRB is hardly exaggerating. The list of 108 companies includes, in no particular judgmental order, and besides the three Indian companies already mentioned, the following cross-industry sample: The Coca-Cola Co., PepsiCo., Nestlé SA, General Mills, Wal-Mart Stores Inc., Costco Wholesale Corp., Marks & Spencer Group, Cheil Industries, LVMH Moet Hennessy Louis Vuitton, Macy’s, Nordstrom, Gap, Anglo American, BHP Billiton, BP, Chevron Corp., China Petroleum & Chemical Corp., Exxon Mobil, Gazprom, Rio Tinto and Royal Dutch Shell.

Those in this varied and impressive list will be gauged, as I had recorded in an earlier column, on various parameters. Leadership, governance and reporting are each being given 10% weight; management systems 30%; and performance 40%. ‘Governance’ is subdivided into two sub-themes: policy commitments; and board-level accountability. ‘Management systems’ has three sub-heads: embedding policy, human rights due diligence and remedies and grievance mechanisms. ‘Performance’ has two: key performance indicators and sector-specific practices, and adverse events, which can remake, or break, a business.

An update from CHRB states that its steering committee has decided to “undertake an additional online consultation from 8-26 February on the revised measurement themes and indicators, focusing on the changes made since the previous consultations". This is described as a “final opportunity for stakeholders to provide input" before the final Methodology 1.0 is published this March.

Sudeep Chakravarti’s latest book is Clear.Hold.Build: Hard Lessons of Business and Human Rights in India. His previous books include Red Sun: Travels in Naxalite Country and Highway 39: Journeys through a Fractured Land. This column, which focuses on conflict situations in South Asia that directly affect business, runs on Fridays.

Respond to this column at rootcause@livemint.com

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