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July 11, 2015

Corporate Human Rights Benchmark Publishes Draft of Key Performance Indicators
    by Robert Kropp

The Benchmark publishes two documents about which it seeks input: a framework for multi-stakeholder consultations, and a draft list of key performance indicators. -- Launched late last year by a coalition including EIRIS and Calvert Investments, the Corporate Human Rights Benchmark (CHRB) draws upon the Guiding Principles on Business and Human Rights of Professor John Ruggie in an effort to benchmark the performance of large corporations in respect to honoring human rights in their business practices.

Additional coalition members are Aviva Investors, the Business and Human Rights Resource Center, the Institute for Human Rights and Business, and VBDO, a Dutch association of investors for sustainable development.

“CEO respondents felt benchmarking companies on their human rights performance would be the best option to enable them to better fulfill their corporate responsibility to respect human rights,” CHRB stated in a recently published draft framework for multi-stakeholder consultations. “In addition to incentivizing business behaviour, the CHRB will make an important contribution to creating greater leverage for policy-makers, investors, communities and consumers.”

“The Benchmark will be an open source, publicly available ranking of companies that empowers global stakeholders with information to use for their own purposes,” Peter Webster of EIRIS said.

In addition to the draft framework, CHRB has published its first draft list of key performance indicators (KPIs) pertaining to business and human rights. According to a press release, “The draft indicators span 5 measurement themes across 9 subtopics, totaling over 50 indicators.” When the methodology is finalized, the indicators will be used to benchmark the human rights performances of the top 100 globally listed companies in the Food & Beverage/Agriculture, Apparel, and Extractives industry sectors.

The five overarching measurement themes include leadership, governance, management systems, performance, and reporting/transparency. The nine subtopics include, under governance, policy commitments and board level accountability; under management systems, embedding policy, human rights due diligence, and remedies and grievance mechanisms; and under performance, KPIs and good practice, and adverse effects.

The expected impacts of the benchmark, according to the draft framework, are relevant for at least four stakeholder groups:
1. Investors will be better equipped with information to direct investments to companies actually performing against international human rights standards and away from those who are not;
2. Business will be incentivized to make information publicly available and when adverse events do occur they will be more likely to demonstrate how they addressed them and “lessons learned”, resulting in greater preventative measures as well as adequate remedies for victims;
3. Civil society, communities and customers will be empowered to make well-informed choices about specific companies to engage with, through greater transparency and better data on performance, and will have better information to encourage and pressure human rights advances by companies; and
4. Policy-makers and regulators will have an objective means by which to focus on those companies and business sectors that have the greatest human rights impacts and in particular those which are underperforming against significant human rights risks, highlighting where increased regulation and incentives might be necessary.

“Consultations will be held through till September 2015,” the press release states, “with the online consultation closing 31st August 2015. The CHRB are calling for feedback from the wide range of interested stakeholders, including business, investors, unions, and civil society.”

In a statement, Bennett Freeman and Mike Lombardo on behalf of Calvert Investments said, “The Benchmark will be a critical tool for investors to assess how companies address human rights-related risk. Participation in these consultations from investors is crucial to ensure we deliver a benchmark fit for this purpose.”

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