Ever wondered how your portfolio companies do when it comes to human rights? A new report, which has the endorsement of institutional investors and money managers representing $5 trillion in assets, will show you.
The Corporate Human Rights Benchmark, a not-for-profit organization, ranks corporate performance based on companies' policies, processes, practices and how they respond to serious allegations related to human rights. Its latest report shows improvement among the firms it tracks.
CHRB found that the use of benchmarks and investor pressure have culminated in a "race to the top," the report said, with some companies committing to further improve their performance.
Nestle, Gap, Freeport McMoRan, Mondelez and Tesco are cited in the report as reviewing and positively evolving policies to manage and report on humans rights.
Further, some money managers, such as Union Investment, are using CHRB data to assess holdings for human rights performance, the report said. The manager aims to shift portfolio companies to a "human rights green area," and those that do not reach this point are shifted to an internal negative list and no longer included in sustainability strategies.
The report also names 28 companies that have not meaningfully engaged with the CHRB by failing to respond to invitations, consultations or communication, and by not taking part in the 2018 benchmark process.
The initial focus at CHRB was on companies in the apparel, agriculture and extractives sectors.
Daniel Neale, program director in London, said in a telephone interview that CHRB first and foremost provides data for others to use. "We need to provide information that either convinces the companies it is good for them (to make changes), or to provide the information that makes a change enforced by investors or government," Mr. Neale said.