A group of more than 175 big investors with $4.5tn in assets have written to 95 companies from Prada to Starbucks over a lack of transparency on human rights in their business and supply chains, calling for immediate action from some of the world’s best-known businesses.
The investors, which include Nordea and Aviva Investors, contacted the worst-performing companies on human rights due diligence according to a ranking from the Corporate Human Rights Benchmark, part of the World Benchmarking Alliance that tracks the treatment of employees and others in their supply chains.
Pauliina Murphy, engagement director at the WBA, said that with the outbreak of coronavirus it was more vital than ever that companies take human rights seriously.
“Businesses are facing extremely difficult decisions with regards to business continuity with short and long-term impact,” she said. “The companies that continue to take care of their people through this crisis, be it in their operations or supply chains, will be rewarded and at the front and centre of the efforts to rebuild the global economy.”
In the letter, which was sent earlier this month as the coronavirus outbreak was spreading, the investors called for companies to take “decisive action” to report on how they approach human rights before the CHRB begins its next round of assessments in 2020.
Human rights issues present material risks to many companies, as well as a financial risk to their investors
The letter targeted every company that scored zero on human rights due diligence in the CHRB 2019 ranking, which looked at how companies publicly outline how they identify, prevent, mitigate and account for the most severe risks to people in connection with their business. It uses publicly available information on issues such as forced labour, protecting human rights activists and the living wage to give companies a maximum possible score of 100.
Magdalena Kettis, active ownership director at Nordea Asset Management, said it was alarming that so many companies were “falling short” on human rights disclosures, warning that asset managers needed to know investments did not pose a risk to people.
Steve Waygood, chief responsible investment officer at Aviva Investors and chair of the CHRB board, said the UK asset manager would not hesitate to “withdraw our support of these company boards at their AGMs if they do not resolve this critical situation as a matter of priority”.
“Human rights issues present material risks to many companies, as well as a financial risk to their investors,” he said.
Costco Wholesale, Ralph Lauren and Carlsberg were also among the companies that were sent the letter.
Carlsberg said it already published information on human rights in its sustainability report. Prada said it started its first internal human rights assessment in its supply chain in 2019 and will publish information on this soon.
Costco declined to comment. Starbucks and Ralph Lauren did not respond to a request for comment.
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