- Top firms fail human rights standards
- Private sector neglects social responsibilities
- Majority lack corporate responsibility measures
More than 90% of the world’s 2,000 most influential firms, including Amazon, BMW, Nestle, Rio Tinto, Pfizer, Shein, and Standard Chartered, are failing to fulfil society standards for human rights, working conditions and corporate ethics, according to a first-of-its-kind study.
Despite accounting for 45 per cent of global income, the world’s top firms still need to take advantage of the opportunity to improve the lives of hundreds of millions of people, according to research released on Tuesday by the nonprofit World Benchmarking Alliance.
“The firms have the resources and power of some of the world’s largest governments, affecting more people than many countries’ whole populations. The fact that 90 per cent of these companies are failing to act on fundamental social expectations demonstrates the state of play in the private sector,” said Namit Agarwal, social transformation lead at the World Bank, which tracks companies’ commitment to the UN Sustainable Development Goals.
“Showing leadership in establishing an equitable, inclusive, and just society might considerably help governments eradicate poverty, reduce inequality, and ensure access to good jobs for all. “Regulation, guidance, and external pressure are required to steer businesses in the right direction,” Agarwal said.
The WBA’s Social Benchmark evaluates companies’ commitment to “act ethically, provide and promote decent work, and respect human rights”.
According to the WBA, which receives funding from the European Union and the governments of Canada, the Netherlands, and Denmark, at least 30% of companies scored between 0 and 2 out of 20 points. There is an apparent “mismatch between what companies disclose on decent work and society’s expectation of them.”
According to the WBA, whereas more than 60% of companies reveal salary information and at least 45% report working hours information, just 29% monitor the health and safety of supplier workplaces.
According to the NGO, only 20% conduct human rights due diligence on their supply chain partners, and only 4% commit to paying a decent wage.
According to the score, most corporations fell short on corporate responsibility, with only 10% declaring their tax payments and 9% describing how they engage with stakeholders such as employees and trade unions.
According to the WBA, despite their significant economic power, only 5% of examined corporations revealed their spending on corporate lobbying.
“The lobbying efforts of the world’s 2,000 most prominent corporations, which generate $45 trillion in sales, can either drive or impede sustainable development. However, there is yet to be a way to determine which route corporations are taking. According to the charity, most firms must be more forthcoming about their political participation plans or funding.
Of the 14 industries questioned, clothes and footwear, ICT, and retail scored the highest for matching social expectations, with scores ranging from 28 to 33 per cent, compared to the average of 23 per cent.
The funds and financial services sector received the lowest score (11 per cent), followed by the transportation business (14 per cent) and real estate (16 per cent).
Companies with headquarters in Asia Pacific had the highest average score, at 35%.
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However, the WBA stated that this was owing to Australia’s significant effect and commitment to revealing tax payments.
The region was followed by Europe (33%) and North America (24%).
The Middle East received the lowest score of 11 per cent, trailing only South Asia and East Asia at 14 per cent.
According to the World Bank, if the world is to reach the UN Sustainable Development Goals, which include halving poverty by 2030, the private sector must assume greater responsibility for the economic and social conditions it contributes to.
According to the organisation, protest movements that have emerged around the world in the last decade demonstrate that people want an economic system that benefits the poorest majority rather than the richest few.
To achieve the Sustainable Development Goals, businesses must engage in socially responsible business practices, such as respecting human rights, providing decent work with living wages and a fair and safe environment, acting ethically by paying their fair share of taxes, and lobbying responsibly.
