CHRB D.2.2.S1 Aligning purchasing decisions with human rights
Does the company describe the practices it adopts to avoid price or short notice requirements or other business considerations undermining human rights OR does the company describe the practices it adopts to pay suppliers in line with the agreed timeframe(s) and for the amount(s) agreed in the payment terms AND does the company review its own operations to mitigate the negative impacts of its purchasing practices in planning, merchandising and costing?
About the data
This metric is from the Corporate Human Rights Benchmark (CHRB), part of the World Benchmarking Alliance (WBA), which has been assessing the human rights disclosures of some of the largest global companies since 2017. By ranking these companies on their policies, processes and practices, as well as how they respond to serious allegations, the CHRB aims to create a race to the top through which companies strive to fulfil their responsibility to respect the human rights of the individuals and communities that they impact.
Performance: Company human rights practices
What do the UN Guiding Principles on Business and Human Rights
expect?
• Guiding Principle 14 asserts that businesses should have policies and processes in place that are proportionate to factors including size, sector, operational context, business structure, and the severity of the business' adverse human rights impacts.
• The commentary to Guiding Principle 14 states ‘severity of impacts will be judged by their scale, scope and irremediable character’.
• The Interpretive Guide to the UN Guiding Principles elaborates further on ‘severity’, noting that the gravity of the impact (its scale) and the number of individuals that are or will be affected (its scope) and irremediability meaning any limits on the ability to restore those affected to a situation at least the same as, or equivalent to, their situation before the adverse impact are relevant factors in determining severity.
Why is this important?
• Key sector risks are risks commonly regarded as potentially severe or likely within the sector and that companies are expected to demonstrate, through a process of human rights due diligence, how they are preventing them or why they are not relevant.
• For businesses to effectively manage these key sector risks, identified by the gravity of their impact (scale) and irremediability, its important they first understand and can articulate the scope of the problem(s) being faced.
• As such, several indicators in Measurement Theme D require companies to demonstrate their understanding of key risks by providing an assessment of the number of individuals that are or will be affected (scope) within their sector.
Performance: Company human rights practices
What do the UN Guiding Principles on Business and Human Rights
expect?
• Guiding Principle 14 asserts that businesses should have policies and processes in place that are proportionate to factors including size, sector, operational context, business structure, and the severity of the business' adverse human rights impacts.
• The commentary to Guiding Principle 14 states ‘severity of impacts will be judged by their scale, scope and irremediable character’.
• The Interpretive Guide to the UN Guiding Principles elaborates further on ‘severity’, noting that the gravity of the impact (its scale) and the number of individuals that are or will be affected (its scope) and irremediability meaning any limits on the ability to restore those affected to a situation at least the same as, or equivalent to, their situation before the adverse impact are relevant factors in determining severity.
Why is this important?
• Key sector risks are risks commonly regarded as potentially severe or likely within the sector and that companies are expected to demonstrate, through a process of human rights due diligence, how they are preventing them or why they are not relevant.
• For businesses to effectively manage these key sector risks, identified by the gravity of their impact (scale) and irremediability, its important they first understand and can articulate the scope of the problem(s) being faced.
• As such, several indicators in Measurement Theme D require companies to demonstrate their understanding of key risks by providing an assessment of the number of individuals that are or will be affected (scope) within their sector.
Methodology
The benchmark uses publicly available information from the company’s website(s), its formal financial and non-financial reporting or other public documents, plus statements such as those related to its policy commitments. These could be codes of conduct, policies, values, guidelines, FAQs and other related documents. The CHRB also considers reports, such as annual, corporate social responsibility and sustainability reports, or human rights reports if these are available, or other reports written for other purposes if these contain information applicable to the CHRB indicators. Full methodology for each sector can be found here.
Scoring:
Most CHRB indicators operate using 'OR' and 'AND' rules. Where two or more requirements are separated by 'AND', companies being benchmarked are required to complete both or all of the options listed in order to obtain a full point but they can score half points if they meet at least one of the requirements. Where two or more requirements are separated by 'OR', companies being benchmarked are required to complete one of the options listed.
Scoring:
Most CHRB indicators operate using 'OR' and 'AND' rules. Where two or more requirements are separated by 'AND', companies being benchmarked are required to complete both or all of the options listed in order to obtain a full point but they can score half points if they meet at least one of the requirements. Where two or more requirements are separated by 'OR', companies being benchmarked are required to complete one of the options listed.
Topics
Value Type
Multi-Category
Options
Describes practices to avoid price or short notice requirements that undermine HRs OR Describes practices to pay suppliers in line with agreed timeframes
Reviews own operations to mitigate negative impact of purchasing practices
None of the above
Research Policy
Designer Assessed
Report Type
Aggregate Data Report