Report warns vast majority of businesses are entrenching social inequalities that will undermine climate action
With just eight years to go until the deadline for the UN’s Sustainable Development Goals (SDGs), the world’s largest companies are nowhere near on track to address major sustainability challenges in a socially just and equitable way.
That is the sobering conclusion of a report published yesterday by the World Benchmarking Alliance (WBA), which found that just one per cent of the world’s 1,000 most influential companies are adequately demonstrating socially responsible business conduct.
To reach its conclusions, the non-profit assessed how companies across a range of industries – including the food and agriculture, oil and gas, automotive, and power sectors – fared against 18 different indicators related to respecting human rights, promoting and providing decent work, and ethical conduct in areas such as lobbying and taxation.
It found that more than half the companies assessed – some 500 firms – scored just 0 to 5 points out of a possible 20.
Dan Neale, social transformation lead at WBA, said the research painted a “sobering picture”, noting that 99 per cent of companies had failed to “demonstrate they truly value people”.
“Businesses are, overall, on course to entrench, rather than end, the social inequalities that pose a global systemic risk and their inability to put people at the heart of their thinking also undermines efforts to address the risks of climate change and biodiversity loss,” he warned.
The report notes that the small pool of companies that received high scores for demonstrating best practices demonstrated that a shift towards more equitable business practices was feasible. “For every step needed there are companies displaying good practices, showing that this transformation is not just necessary, but possible,” the report notes.
The WBA said its findings laid bare the different regard given to different social issues in the corporate world, with the majority of firms committed to disclosing health and safety and workforce diversity data, but just four per cent revealing whether they pay, or intend to pay, their own workers a living wage.
Just 51 companies included in the report could demonstrate evidence of activities that support payment of a living wage in their value chains, the WBA said. Among the firms found to demonstrate good practice in this area is consumer goods giant Unilever, which is commended in the report for its efforts to secure a living wage beyond its own employees.
The WBA said that providing and promoting decent work was an area where companies had been found to performing “particularly poorly”.
Human rights due diligence was found to be another weak spot for many firms. While more than half the companies had publicly committed to respecting human rights, more than three quarters of firms were unable to corroborate these commitments with evidence of tangible action.
Neale said the report highlighted that voluntary approaches to delivering socially responsible business practices were not working.
“We’ve found a huge gap between what companies are doing and what they must do to help address inequality and ensure a just transition to a sustainable future,” he said. “The findings clearly show voluntary approaches are insufficient, especially around human rights. Now we aim to incentivise and mobilise companies to close that gap as the 2030 deadline of the SDGs approaches.”