New research from the World Benchmarking Alliance (WBA) has revealed 90 percent of the world’s 2000 most influential organisations are failing to meet fundamental societal expectations in respecting human rights, providing decent work and acting ethically.
Alarmingly, more than 30 percent of the assessed companies scored between 0 and 2 points out of 20 possible points, with the full 90 percent not even halfway to meeting expectations, according to the non-profit.
The companies – dubbed the ‘SDG2000’ – include some of the largest apparel and food brands in the world, such as Amazon, the Coca-Cola Company, BMW, Shein, McDonald’s and Pfizer.
Between them, they generate revenue that is equivalent to 45 percent of global GDP and employ 95 million people directly, plus hundreds of millions more indirectly through their value chains.
The ‘2024 Social Benchmark’ report reveals that over 60 percent of the companies have disclosure on decent wages, while more than 45 percent have some on working hours.
However, only 4 percent of companies are committed to/are currently paying their employees a living wage and just 3 percent have a working hours policy that complies with standards set by the International Labour Organization (ILO).
When it comes to monitoring the health and safety of their suppliers’ workplace, only 29 percent comply, while just 20 percent conduct human rights due diligence to identify and address their human rights risks and impacts.
Namit Agarwal, Social Transformation Lead at the World Benchmarking Alliance, said the SDG2000 companies have resources and influence equivalent to some of the biggest countries, impacting more people than the populations of many nations.
“The fact that 90 percent of these companies are failing to act on fundamental social expectations shows the state of play of the private sector. Demonstrating leadership in creating an equal, inclusive and just world could significantly aid governments in eradicating poverty, reducing inequality and ensuring access to decent work for all. Regulation, guidance and external pressure are necessary to steer businesses in the right direction.”
Of the SDG2000, only 2 percent disclose their global gender pay gap, 10 percent disclose how much tax they pay in the countries they operate from and a mere 5 percent disclose their lobbying expenditures.
The majority also fell short on communicating examples of how they engage with affected or potentially affected stakeholders, including employees, trade unions, suppliers, civil society and local communities. Only 9 percent take necessary steps.
As a result of the findings, the WBA is calling on leaders to ensure companies are being held accountable through four priority areas, including:
- Paying a living wage and preventing excessive working hours
- Being transparent in lobbying to avoid undue political influence
- Engaging with affected stakeholders to help improve human rights and decent work practices
- Driving change through regulation, guidance and pressure
The report revealed some of the 14 sectors surveyed are performing better than others, including apparel & footwear (33 percent), ICT (30 percent) and retail (28 percent).
“A major commonality among these sectors is that they are all consumer-facing so the costs of failing stakeholder expectations are greater. Companies within these sectors are more prone to public scrutiny on their human rights performance, particularly by consumers who would themselves be impacted by the products or services or put off by human rights abuses within the supply chain,” said the WBA.
Regional insights suggest companies headquartered in the Pacific, Europe and North America perform better overall, with companies based in the Pacific scoring the highest across all three of the measurement areas due to a boost from Australia.
“The region has the greatest proportion of companies that demonstrate efforts to pay supply chain workers a living wage (11 percent) and disclose the amount of corporate income tax paid for each tax jurisdiction where they reside (19 percent). This is primarily due to Australian companies, where 19 percent disclose their income taxes paid compared to the benchmark average of 9 percent of companies,” said the WBA.
Australia’s Coles Group and Woolworths Group are the top-scoring companies in the region, both accumulating 13 out of the 20 possible points.
On the other end of the scale, companies based in the Middle East and North Africa displayed the poorest performance, with an average total benchmark score of 11 percent.
None of the SDG2000 companies in the region demonstrated efforts to pay supply chain workers a living wage, alongside zero commitment to the ILO standards on working hours.
Commenting on the findings, Lysa John, Secretary General of CIVICUS and Advisory Board member of the World Benchmarking Alliance, said companies must prioritise human rights and sustainable development.
“This includes ensuring due diligence and disclosure of impacts along with clear plans for a just transition towards a net-zero emissions future with decent work for all. How we create shared values, improve systems for corporate accountability and support allies to change unjust systems will make a timely difference.”
Read the full report here.
