Assessing corporate respect for human rights is powerful but challenging
Damiano de Felice, Strategic Adviser to the CEO of the Access to Medicine Foundation, co-director of the Measuring Business & Human Rights project and member of the World Economic Forum Global Agenda Council on Human Rights. The views expressed here are solely those of the author in his private capacity.
According to the United Nations Guiding Principles on Business and Human Rights (UNGPs), business enterprises are expected to act with due diligence to avoid infringing on the rights of others and to address adverse impacts with which they are involved. Since 2011, key elements of this corporate responsibility to respect human rights have diffused across international organizations, standard-setting bodies, governments, civil society organizations and companies themselves.
To mention a couple of examples within the context of the Organisation for Economic Co-operation and Development (OECD), the Guidelines for Multinational Enterprises now include a specific chapter on human rights that explicitly draws on the UNGPs. The Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence instruct OECD export credit agencies to “encourage protection and respect for human rights”.
This unprecedented convergence around a common set of standards has spurred widespread interest in how to measure whether and how much corporations are meeting their responsibility to respect human rights. It comes as no surprise, then, that ratings, reporting frameworks, certification schemes and impact assessment tools have taken center stage as some of the most promising developments in the business and human rights field.
For instance, today the OECD Global Forum on Responsible Business Conduct hosts a lunchtime session on the role of indicators and public benchmarks organized by the Corporate Human Rights Benchmark and the Danish Institute for Human Rights.
There is little doubt regarding the enormous potential of most of these initiatives. Measurement, assessment and reporting tools can be fundamental for:
- companies that want to manage their human rights risks and track their progress in the implementation of the GPs;
- investors and consumers who wish to compare the human rights performance of different corporations;
- governments willing to adopt evidence-based protective measures;
- local communities and human rights advocates who are concerned about the human rights footprint of corporate actors; and
- researchers interested in exploring the drivers of responsible business conduct.
Notwithstanding these promises, it is also important to recognize that measuring human rights is not an easy task. In a peer-reviewed article recently published by Human Rights Quarterly, I reviewed more than 80 business and human rights initiatives, and emphasized two main challenges: validity and emancipation.
A valid indicator is an indicator that measures what it purports to measure. By simplifying and standardizing complex but partial data, business and human rights indicators risk depicting misleading pictures of corporate performance.
To start with, indicators often fail to take into account important factors that can affect the “score” of a company. For example, without contextual information, it is impossible to say whether the low number of adverse impacts reported through a company’s grievance mechanisms is a positive result. The absence of incidents can be the consequence of several dynamics: previous (unjustified) arrests of community leaders, intimidation that prevents local communities from protesting and registering complaints, lack of legitimacy of the complaint mechanism itself, etc.
The human rights community calls this situation the “paradox of human rights statistics”: less information on rights violations may imply the existence of more violations. This is why it is great that the newly-launched UNGP Reporting Framework does not impose metrics but offers a set of meaningful questions.
In addition, assessment tools have to rely on partial information, mainly limited to corporate self-reporting and third-party documentation.
The problems with corporate self-reporting lie in its scope and trustworthiness. Companies still disclose little information on their human rights due diligence procedures and almost nothing on impacts. Self-reported data is also difficult to verify.
Third party reports are not perfect either. Information is frequently expressed in narrative form, which is difficult to aggregate for comparative purposes. Independent accounts also fail to cover all corporate operations. Their findings can therefore reflect the exception (an extraordinary rosy or gloomy picture) rather than the rule.
Conceptual clarity is a fundamental prerequisite for meaningful measurement. Unfortunately, while the GPs offer initial guidance on what business and human rights indicators should look like, they also leave many questions unanswered. According to their own text, the UNGPs “are not intended as a tool kit, simply to be taken off the shelf and plugged in”.
What this means in practice is that the production of numerous business and human rights indicators is not a merely technical exercise, but an implicit normative process in which new standards are actually created. As highlighted by Navy Pillay, “devising a policy or statistical indicator is not a norm or value-neutral exercise”.
The consequence is that the production of ratings, reporting frameworks and human rights impact assessment tools can disempower human rights victims and legitimate centers of power (such as the Human Rights Council, national Parliaments, local councils) at the expenses of distant Economic, Social and Governance (ESG) experts. Innovative mechanisms, such as the community-based human rights impacts assessment tool advocated by Oxfam and FIDH and the multi-stakeholder process at the basis of the Access to Medicine Index, are welcomed to avoid this risk.
Another problem related to emancipation is that the mere “language” of indicators, with its seemingly objective aspect, may make it more difficult for human rights abusers to be held accountable.
First, using indicators introduces a risk of condoning a low level of human rights abuses. From a human rights perspective, every adverse human rights impact is one too many; there is no need to count and measure. What business and human rights indicators often do, in contrast, is give the false impression that a “good” score (for instance, a 2 in a scale from 1 to 5) equates to “good” behavior.
Second, using indicators introduces a risk of making the contestation of misleading information more difficult. While scores and ratings are the outcome of controversial normative and methodological decisions, as seen above, they are often incorrectly presumed to be – or are presented as – scientifically objective. When companies proudly announce their inclusion in sustainability benchmarks, the underlying subjective choices of the raters are rarely discussed.
Business and human rights benchmarks, reporting frameworks and impact assessment tools have enormous potential. Their production should therefore be encouraged. However, the business and human rights community should not fall victim of the erroneous “article of faith” that any data is better than no data.
We do not need whatever measurement initiatives. We need good measurement initiatives.
In the end, indicators are only tools, not ends in themselves. They can be compared to crutches. If not proportioned to the needs of the users, crutches can hinder rather than help.
Measuring Business & Human Rights is a research project that aims to advance the capacity of business managers and corporate stakeholders to assess the extent to which companies meet their responsibility to respect human rights. For more information about the project, see http://blogs.lse.ac.uk/businesshumanrights. Here is a link to the article at the basis of the blogpost.