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03-07-2024
More than 90 percent of the world’s 2,000 most influential companies, including Amazon, BMW, Nestle, Rio Tinto, Pfizer, Shein, and Standard Chartered, are failing to meet societal expectations towards human rights, working conditions and corporate ethics, a first-of-its-kind assessment has found.
Despite commanding revenues equal to 45 percent of the global economy, the world’s top companies are missing the opportunity to positively affect the lives of hundreds of millions of people, the nonprofit World Benchmarking Alliance said in a report released on Tuesday.
“The 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,” said Namit Agarwal, social transformation lead at the WBA, which tracks companies’ commitment to the UN Sustainable Development Goals.
“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,” Agarwal added.
The WBA’s Social Benchmark assessed companies’ commitment to “act ethically, provide and promote decent work, and respect human rights”.
At least 30 percent of companies scored between 0 and 2 out of a possible 20 points, with a clear “mismatch between what companies disclose on decent work and society’s expectation of them,” said the WBA, which receives funding from the European Union and the governments of Canada, the Netherlands and Denmark.
While more than 60 percent of companies disclose some information about wages and at least 45 percent report some information about working hours, just 29 percent monitor the health and safety of supplier workplaces, according to the WBA.
Only 20 percent carry out human rights due diligence on their supply chain partners and just 4 percent are committed to a living wage, according to the nonprofit.
Most companies also fell short in the area of corporate responsibility, with just 10 percent disclosing their tax payments and 9 percent outlining how they engage with stakeholders like employees and trade unions, according to the index.
The WBA said just 5 percent of surveyed companies disclosed their spending on corporate lobbying despite their outsized economic influence.
“The lobbying efforts of the world’s 2,000 most influential companies, representing $45 trillion in revenue, can either drive or hinder sustainable development. Currently, however, there is no way to know which direction companies are pushing. Most companies are not transparent about their political engagement strategies or spending,” the nonprofit said.
Of the 14 sectors surveyed, apparel and footwear, ICT and retail ranked the highest for meeting societal expectations, with scores of between 28 percent and 33 percent, compared with the average score of 23 percent.
The funds and financial services sector scored the lowest, with 11 percent, followed by the transportation industry at 14 percent, and real estate at 16 percent.
By region, companies with headquarters in the Asia Pacific scored the highest, with an average score of 35 percent.
However, the WBA said this was due to the outsize impact of Australia and its commitment to disclosing tax payments.
The region was followed by Europe at 33 percent and North America at 24 percent. (Int’l News Desk)
