International Human Rights Clinic 2013-2014, SOAS

ANALYTICAL REPORT Comprehensive analysis of data compiled for the Institute of Human Rights and Business (IHRB)

Katharine Swigget, Loyiso Makapela and Matthew Burnett-Stuart  

   

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Table of Contents

Acronyms and Abbreviations 3 Introduction 4 Research Brief 6 Key Findings 7 Companies Overview and Methodology 8 Trends and Gaps Regarding Specific Human Rights 11 Commitments to specific human rights risk management processes 17 Summary of Findings and Conclusion 22 Multi-stakeholder Initiatives Overview and Methodology 24 Trends and Gaps Regarding Specific Human Rights 25 Rights-specific requirements from MSIs focusing on specific industry sectors 27 Commitments to specific human rights risk management processes 28 Recommendations and Conclusion 32 Stock Exchanges Introduction and Methodology 33 Trends in listing requirements or criteria around specific human rights 35 Gaps in listing requirements or criteria around specific human rights 37 Key Findings in exchange approaches to process specific criteria 40 Recommendations 42 Conclusion 43 Conclusion 44 Appendix I: List of Companies 52 Appendix II: List of Multi-stakeholder Indicatives 55 Appendix III: List of Stock Exchanges 64 Table I: Stock Exchange Data Spreadsheet 66

   

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Acronyms and Abbreviations

• BM&FBOVESPA-Brazilian Stock Exchange

• CSR-Corporate Social Responsibility

• DJSI-Dow Jones Sustainability Index

• ESG-Environment, Social and Governance

• GRI-Global Reporting Initiative

• ICCPR-International Covenant on Civil and Political Rights

• ILO-International Labor Organization

• ISE-Istanbul Stock Exchange

• ISE-Corporate Sustainability Index

• JSE-Johannesburg Stock Exchange

• KPI Key Performance Indicators

• MSI-Multi Stakeholder Initiative

• NASDAQ- National Association of Securities Dealers Automated Questions

• OECD-Organization for Economic Cooperation and Development

• OLGM-Operational Level Grievance Mechanism

• SASAC-State Owned Asset Supervision and Administration Commission

• SET-Stock Exchange of Thailand

• SME-Small and Medium Enterprises

• SRI- Social Responsibility Index

• SRSG-Special Representative of the United Nations Security General

• UDHR-Universal Declaration of Human Rights

• UN GP- United Nations Guiding Principles

• UN PRI-United Nations Principles for Responsible Investment

• WTO-World Trade Organization

   

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Introduction

The protection and promotion of human rights has traditionally been viewed as the responsibility of the state.1 The prolific rise of transnational corporations (TNCs) has resulted in a shift of emphasis, from a state’s obligation to protect human rights to the corporate responsibility to do so. The dichotomy between state and private actors is now blurred in that the dynamics of globalisation mean that TNCs have become more powerful and influential than nation states.2 Due to the bargaining power, financial means and political clout that TNCs possess, human rights have repeatedly been violated without recourse. Consequently, the last decades have seen an increase in pressure from a variety of actors and stakeholders (e.g. NGOs, human rights activists, and various other groups) to create a framework of human rights responsibility for corporations. The interplay between international soft law standards and hard law is one of the most debated issues in the sphere of business and human rights as demonstrated by the number of different initiatives created by various UN agencies over the past decades3 One of these initiatives, the Global Compact, was created in 1999 4 , and effectively encouraged and legitimized voluntarism as the best approach towards human rights and business. The Global Compact, with over 8,700 participants is the currently the largest voluntary corporate responsibility initiative in the world.5

In contrast to the soft law approach employed by the Global Compact, the UN Commission adopted the 2003 UN Norms on the Responsibilities of Transnational Corporations and Other                                                                                                                          1 Steven Ratner, ‘Corporations and Human Rights: A Theory of Legal Responsibility’ (2001) YLJ 441 2 Sonja Gallhofer and Jim Haslam ‘Accountability and transparency in relation to human rights: A critical perspective reflecting upon accounting, corporate responsibility and ways forward in the context of globalisation’ (2011) CPA 767 3 Aurora Voiculescu, ‘Human Rights and the normative ordering of global capitalism’ in Aurora Voiculescu and Helen Yanacopulos (eds.), The Business of Human Rights (ZED, 2010) 15 4 ibid (10 principles of Global Compact) 5 ILO, International Instruments and Corporate Social Responsibility (2007) 19

The Ten Principles of the Global Compact asks companies to: Human rights 1. support and respect the protection of internationally proclaimed human rights; 2. make sure that they are not complicit in human rights abuse; Labour 3. uphold freedom of association and the effective recognition of the right to collective bargaining; 4. uphold the elimination of all forms of forced and compulsory labour; 5. uphold the effective abolition of child labour; 6. uphold the elimination of discrimination in respect of employment and occupation; Environment 7. support a precautionary approach to environmental challenges; 8. undertake initiatives to promote greater environmental responsibility; 9. encourage the development and diffusion of environmentally friendly technologies; Anti-corruption 10. work against all forms of corruption, including extortion and bribery

   

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Business Enterprises with Regard to Human Rights. Amongst other aspects, the Norms gave international human rights law precedence over domestic law and required that states establish the necessary legal and administrative framework that would ensure implementation. Furthermore, the norms were intended, through the use of the word 'shall', to be legally binding. This shift away from voluntarism was not met with enthusiasm from corporations and as such the Norms proved unsuccessful.6 Consequently, in 2005, the UN Human Rights Commission requested that the UN Secretary-General appoint John Ruggie as Special Representative with a mandate to, amongst other things, identify and clarify the standards of corporate responsibility; to elaborate on the role of state in effectively regulating and adjugating the role of TNCs with regards to human rights including through international co-operation to research and clarify concepts such as 'complicity' and 'sphere of influence' (introduced by the UN Global Compact and taken forward in the UN Norms).7 In 2008, Ruggie presented the ‘Protect, Respect and Remedy’ Framework which came into operation in 2011 as the UN Guiding Principles on Business and Human Rights.8 These Principles do not create any legal obligations but instead seek to clarify the best standards regarding human rights for states and TNCs. They are based on a three-tier framework:

1) The state duty to protect human rights: this is particularly important with regards to this report, as there is various factors actions that states can, and at times do take, to protect human rights. The state duty to protect human rights served as the basis upon which some of the recommendations mentioned in this report are based.

2) The corporate responsibility to respect human rights: in order to meet this requirement, companies are required to have a policy/commitment to respect human rights. This tier is perhaps the most important for this report, in that it served as a constant point of reference throughout the sections.

3) Access to remedy for victims of business-related abuses operational grievance mechanisms are one of the steps companies take to ensure the effectiveness of their human rights policy commitments, they are a manner in which the corporate sphere is providing access to remedy for victims.

                                                                                                                         6  Aurora Voiculescu, ‘Human Rights and the normative ordering of global capitalism’ in Aurora Voiculescu and Helen Yanacopulos (eds.), The Business of Human Rights (ZED, 2010) 16 7 UNCHR (2005) UN Doc E/CN.4/RES/2005/69 <http://www.ohchr.org/EN/Issues/Business/Pages/SRSGTransCorpIndex.aspx> accessed 2 February 2014 8  UN Guiding Principles on Business and Human Rights (2011)  

   

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Research Brief The overall objective of the brief was to support the Institute of Human Rights and Business (IHRB) in developing an open-source Human Rights Performance Benchmark for stakeholders (private companies, states, civil society as well as other entities with a vested interest) to easily identify whether businesses have met their human rights responsibilities. The initiative sought to build on a competitive approach to drive better human rights performance; building on transparent benchmarking that would allow companies to see how they performed against their peers, and for shareholders and stakeholders to use in targeting their leverage in the market in order that they may reward positive improvements in performance. The first part of the process commenced with a mapping of existing benchmarks, companies and multi-stakeholder initiatives (MSIs) across various sectors and encompassing a myriad of relevant issues and was informed by the process steps of the United Nations Guiding Principles, this included aspects such as: the various requirements for a) specific company policies or public commitments, b) for embedding these commitments into the corporate culture c) for conducting stakeholder consultation processes, human rights risk and impact assessments, and d) for integrating findings into specific findings into specific staff roles.9 The underlying objective of the mapping process was to understand how human rights are expressed in codes to which companies are already willing to align themselves and to identify the gaps that may exist. The second part of the research entailed deeper analysis into the methodology used by the companies, benchmarks and multi-stakeholders. Finally, after the attendance of a conference in which the concept of a human rights benchmark was developed even further through the collaboration of various actors within the business and human rights sphere, the brief was then extended to include the compilation of a meeting report as well as the mapping of a number of stock exchanges. The only limitations that exist with regard to the scope of this report pertain to the benchmark mapping process. For this purpose, this paper will analyze only the results of the mapping of companies, multi-stakeholder initiatives (MSIs), and stock exchanges. This paper is divided into three sections. The first section deals with the analysis of a selected number of companies, the second with the survey of MSIs and the third with stock exchanges and their listing requirements. Each section breaks down the trends and gaps in their language pertaining to specific human rights and reporting mechanisms. A team from the SOAS School of Law’s International Human Rights Clinic conducted this extensive survey work over the period October 2013 – January 2014 in cooperation with IHRB. The team comprised of Katharine Swiggett, Loyiso Makapela and Matthew Burnett-Stuart, with guidance from Professor Lynn Welchman, whose encouragement is gratefully acknowledged. Additionally, the team thanks Haley St. Dennis, Margaret Wachenfeld and Professor Peter Muchlinski for their support and assistance.

                                                                                                                         9 Obtained from initial research brief

   

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Key Findings

For companies

• Labour related rights and the environment are the issues that receive most attention from companies across all sectors.

• Companies tend to focus on particular human rights that are relevant to their industry. • The extractive sectors cover the widest range of human rights related issues. • The majority of companies lack a gender perspective. • The living wage is discussed in very generic terms or not at all. • 63% of companies surveyed write about their positive contributions to human rights,

often equating them to philantropic activities. • There is insufficient transparency on impact and assessment procedures. • Reporting mostly focuses on procedures rather than on outcomes. • There is an imbalance between positive and negative impacts and qualitative and

quantitative reporting. • There is a lack of information regarding key performance indicators (KPIs)

For Multi-Stakeholders Initiatives

• The rights of Indigenous Peoples are not sufficiently stated within all policy

statements or codes of conduct or practice. • The rights of migrant workers are not clearly stated. • MSIs outside the extractives sector lack sufficient statements on conflict and security issues

• There is a lack of concise grievance mechanisms.

For Stock Exchanges

• A large number of stock exchanges have sustainability indexes. • There is a stronger focus on the ‘environment’ aspect in terms of the ESG

factors. • There is an increase in efforts by stock exchanges to promote transparency by

way of company disclosure. • Stock exchanges are integrating domestic laws, industry rules and regulations

into listing criteria • Most of the listing criteria does not refer to ‘human rights’ explicitly • There is a stronger focus on Corporate Social Responsibility as opposed to ESG

factors in listing criteria.

   

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Companies    Overview and Methodology This section analyses the key findings and trends of the mapping of 41 companies10 representing a range of countries and industry sectors. The aim of this analysis was twofold: 1) to review the specific language and discourses that companies use in reference to human rights and 2) to look at how internal processes that reflect a human rights commitment are reported, using the European Commission Human Rights Sector Guides as reference. 11 These guides were published to offer advice on how to implement the UN Guiding Principles, which address the corporate responsibility to respect human rights. The 41 companies that were chosen for the mapping were taken from a list of 339 companies available on the Business and Human Rights Resource Centre website which have in common a policy statement and/or commitment that explicitly refers to human rights.12 The criteria adopted for the selection of the companies was based on geography and industry sector in order to analyse the widest range of companies as possible. This list is itself evidence that the discourse of human rights has increasingly become a standard feature of corporations' policies at the highest level. However, the way in which human rights are expressed and the priority that is given to specific rights over others differs from company to company. The Guiding Principles state that 'for the content of human rights, at a minimum, companies should look to the International Bill of Human Rights and the core International Labour Organization (ILO) Conventions'.13 In the academic literature there is a debate as to what extent labour standards can be viewed as human rights since the standards that the ILO advocated for many decades were never constructed as such.14 Many unions and NGOs use the term ‘labour rights’ and ‘labour standards’ as synonyms as the rights discourse gives more validity and moral force to workers’ claims.15 In 1998 the ILO decided to select four rights as fundamental human right using eight fundamental conventions as reference.16

                                                                                                                         10 Appendix I. 11 European Commission Human Rights Sector Guides (2012) http://ec.europa.eu/enterprise/policies/sustainable-business/corporate-social-responsibility/human-rights/ 12 The list is available at <http://www.business-humanrights.org/Documents/Policies> accessed 4 December 2013 13 UN Guiding Principle 1 14 Virginia Mantouvalou, 'Are Labour Rights Human Rights?' (2012) UCL LRI <http://www.ucl.ac.uk/laws/lri/papers/VMantouvalou_Are_labour_rights_human_rights.pdf> accessed 2 January 2014 15 Piya Pangsapa and Mark J. Smith, 'Transforming labour standards to labour right ' in Aurora Voiculescu and Helen Yanacopulos (eds.), The Business of Human Rights (ZED, 2010) 16 Freedom of Association and Protection of the Right to Organise Convention (No. 87)1948 Right to Organise and Collective Bargaining Convention (No. 98), 1949 Forced Labour Convention (No. 29), 1930 Abolition of Forced Labour Convention (No. 105), 1957 Minimum Age Convention (No. 138), 1973 Worst Forms of Child Labour Convention (No. 182), 1999 Equal Remuneration Convention (No. 100), 1951

   

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The four principles in the ILO Declaration of Fundamental Principles and Rights at Work are: (a) Freedom of association and the effective recognition of the right to collective bargaining; (b) The elimination of all forms of forced or compulsory labour; (c) The effective abolition of child labour; and (d) The elimination of discrimination in respect of employment and occupation.17 All Member States, even if they not have ratified the eight Conventions, have an obligation to respect, to promote and to realize them. This declaration was criticised by some on the basis that it effectively excluded other important socio-economic rights, such as the right to a minimum wage, from being considered as fundamental human rights.18 The difference between rights and standards is important as the latter are perceived as aspirational and not as mandatory requirements.19 Therefore, companies may chose not to follow the guidelines set out by the ILO conventions on fair compensation without suffering any legal repercussions. For the purpose of clarity and because it also includes the principles listed by the ILO this review analysed the commitment of companies using only the Universal Declaration of Human Rights (UDHR) as a benchmark. Art. 20 protects the freedom of association, while the elimination of forced labour and non-discrimination are both respectively enshrined under Art. 4 and Art. 7. In addition to the rights enshrined in the UDHR the mapping also covered twelve issue areas that were deemed central by the project partners to the corporate responsibility to protect human rights. These issue areas are:

• worker health and safety • community health and safety • land acquisition and use • indigenous people • environment • security and conflict • migrants • vulnerable groups (including women, families, children, people with

disabilities, etcetera) • transparency • investment trade and globalization • government impacts • positive impacts

                                                                                                                                                                                                                                                                                                                                                                                          Discrimination (Employment and Occupation) Convention (No. 111), 1958 17 International Labour Organization (ILO), Declaration of Fundamental Principles and Rights at Work adopted in 1998 18 Hillary Kellerson, 'The ILO Declaration of 1998 on Fundamental Principles and Rights: A Challenge for the Future', (1998) ILR 223 19 Piya Pangsapa and Mark J. Smith, 'Transforming labour standards to labour right ' in Aurora Voiculescu and Helen Yanacopulos (eds.), The Business of Human Rights (ZED, 2010)

   

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Note on Small and Medium Enterprises It is important to note that the companies analysed were not selected on the basis of their size or the number of countries in which they operate. However, the review suggests that human rights commitments are mainly made by medium-large companies. The only two companies surveyed that operate in only one region and that have a human rights policy were Persimmon in the UK and Tropical Cable and Conductor in Ghana. Unsurprisingly, these two companies were also the ones that had internal mechanism and processes that least reflected their human rights commitments. Large multinationals with numerous business relationships worldwide tend to have a wider range of policy frameworks in place on corporate social responsibility (CSR), which include human rights. This is largely due to the fact that big companies are more exposed to human rights related risks and so they have a strong incentive to invest on the integration of human rights considerations internally and in their business relationships. In this respect, the scope of this review was too limited to elaborate any meaningful conclusion and further research on small and medium sized companies is needed. However, it is by no means certain that Small and Medium Enterprises (SMEs) will become more receptive in the short or long term of the advantages of having a human rights framework. Documents such as the European Commission's Guide to Human Rights for SMEs have been produced to highlight the fact that enterprises of all sizes risk having negative human rights impacts. Small businesses with little resources will likely need further incentives to implement the Guiding Principles. 20 While, for example, the extractive sector is often the focus of public opinion mobilization, the impacts on human rights of a company with ten or less employees may be indirect and outside the scope of campaigners and/or academics. For these reasons, the regulatory role of governments in stimulating human rights due diligence beyond voluntary language needs to be emphasised. An example towards this direction is given by the UK, which is the first country to set out guidance to companies on integrating human rights into their operations.21

                                                                                                                         20 Introductory Guide to Human Rights for SMEs <http://ec.europa.eu/enterprise/policies/sustainable-business/files/csr-sme/human-rights-sme-guide-final_en.pdf> accessed 6 January 2014 21 Foreign and Commonwealth Office, 'UK first to launch action plan on business and human rights', (4 September 2013) <https://www.gov.uk/government/news/uk-first-to-launch-action-plan-on-business-and-human rights>  

   

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Trends Labour related rights and the environment are the issues that receive most attention from companies across all sectors. Labour issues Companies have to routinely deal with labour rights and general health and safety measures that protect their employees in the workplace, it is no surprise that these issues generally appear in most of the surveyed policies and/or commitments. Reference to labour rights often appear alongside general and broader commitments to all human rights or in specific sections that deal exclusively with employees. Companies usually adopt the definitions and principles of the eight ILO conventions (particularly on child labour and forced labour). In this sense, the ILO human rights standards give legitimacy to the company and have indeed, been included among the ten principles of the UN Global Compact.

• All the companies that were looked at have committed themselves to banning forced labour and to ensuring that a non-discrimination mechanism is in place. With regards to forced labour, as mentioned above, the majority refer to the ILO conventions.22 Sixteen companies also used the word slavery which has a much stronger connotation than the more analytical definition given by the ILO.23

• Discrimination is mostly referred in all of its facets (i.e. race, national origin, gender, age, disability, marital status, sexual orientation, religion or belief, etcetera). As for most Corporate Social Responsibility (CSR) issues, the reason for embracing diversity are usually explained by business priority: companies see linguistic and cultural differences as stimulating and conducive to innovative thinking. Interestingly, there were cases in which the notion of discrimination was more limited depending on the documents where it was mentioned. For example, Mazda gives a very detailed and comprehensive description of how it understands discrimination on its website, while in its supplier guidelines on CSR it does not include sexual orientation.24 This discrepancy might indicate that human rights considerations are more generic in the policies concerning business relationships when compared to internal codes of conduct.

• 95% of the companies also commit to ensure freedom of association and that health and safety measures and/or laws are enforced. When there are country restrictions in regards to the right to join or form trade unions, companies may

                                                                                                                         22 ILO, Convention concerning Forced or Compulsory Labour (No. 29) adopted 28 June 1930 and Convention governing the Abolition of Forced Labour (No.105) adopted 25 June 1957 23 According to the definition of the Forced Labour Convention (No. 29), 1930, the term forced or compulsory labour shall mean 'all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily'. As for slavery, according to the definition given in the UN Slavery Convention of 1926:'Slavery is the status or condition of a person over whom any or all of the powers attaching to the right of ownership are exercised' 24 Mazda, ‘Supplier CSR Guidelines’, <http://www.mazda.com/csr/csr_vision/distributor/pdf/supplier_csr_guideline_e.pdf> accessed 23 November 2013  

   

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establish alternative mechanisms such as workers' committees, although this is rarely mentioned in the policies that were reviewed.

• Health and safety are not usually regarded as part of the 'realm' of human rights and therefore will usually be included in sections that only deal with labour conditions. However, unsafe and unhealthy workplaces can affect a series of rights, including Articles 3 and 25 of the UDHR.25 This review also looked at instances in which companies address access to healthcare for the wider community and only three were found to do so, two of which were South African. For example, Anglo-Gold Ashanti writes that:

Given the importance of health within the communities in which we operate and, very often, the lack of access to healthcare, we also look to find ways in which the internal capabilities we have developed can be used to contribute to improve community healthy.26

The fact that the two South African companies that were mapped both mention healthcare and the community is indicative. No doubt this is largely due to the country's AIDS pandemic and efforts from NGOs to promote access to healthcare as a basic human right, as well as the wide range of human rights enshrined in the South African Bill of Rights.27 The environment Outside the workplace sphere, the environment is a key concern for 63% of the companies that were mapped. This trend is not surprising since sustainability has long been on the CSR agenda. For this reason, the internal mechanisms that exist in this field seem, on paper, to be more developed and sophisticated than the ones in place for human rights. There is also the argument that environmental issues are easier to recognise and measure (e.g. CO2 emissions) than human rights violations.28 As for labour rights, issues regarding the environment are usually reported separately from other social and economic matters; in essence, human rights and sustainability are not viewed as connected but instead as distinct separate entities. Some commentators argue that the enjoyment of basic rights such as the right to health, life and suitable working conditions are strictly linked to environmental, water and land issues.29 Damage to the environment therefore results in the violation of these rights. However, none of the                                                                                                                          25 Universal Declaration of Human Rights (adopted 10 December 1948 UNGA Res 217 A(III) (UDHR) art. 3 'Everyone has the right to life, liberty and security of person.' Universal Declaration of Human Rights (adopted 10 December 1948 UNGA Res 217 A(III) (UDHR) art. 25(1) 'Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.' 26 AGA, ‘Sustainability Report’ (2012) <http://www.aga-reports.com/12/download/AGA-sustainability-report-2012.pdf> accessed 7 November 2013 27 Mark Heywood, 'South Africa's Treatment Action Campaign: Combining Law and Social Mobilization to Realize the Right to Health' (2009) JHR 14 28 Terry Slavin, ‘UN guidance on the business approach to human rights’ (The Guardian, 28 March 2013) <http://www.theguardian.com/sustainable-business/business-cohesive-approach-human-rights> accessed 2 December 2013 29 David Shelton, 'Human Rights, Environmental Rights, and the Right to Environment.' (2005) SJIL 103

   

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companies reviewed mentioned their commitments to respect environmental regulations as connected to the safeguarding of specific human rights. Instead, companies usually explain the rationale for protecting the environment (apart from legal regulations) as positive for both business and the community. Companies tend to focus on particular human rights that are relevant to their industry. As the methodology section notes, the majority of companies reviewed express their commitment to a wide range of rights. However, the operational language that they use in documents other than their human rights policy statements indicates that companies tend to focus on the rights that are most relevant to their operations. For instance, the tourism and hospitality sector is particularly attentive to issues concerning human trafficking, as staff in hotels can easily be victims of forced labour, especially if they are sub-contracted. As well as improving auditing in the global supply chain regarding specific risks, companies are also starting to promote initiatives on issues associated with their sector. The Hilton Company is part of the Youth Career Initiative (YCI), a project that aims to integrate the victims of trafficking into a 6-month education programme.30 This approach seemingly follows the Guiding Principles' key message that companies should, through due diligence, prioritize action with respect to the impacts that will have the most severe effects.31 The issues that have less severe consequences should be still looked at but within an appropriate time frame. The extractive sectors cover the widest range of human rights related issues. It is not surprising that the extractive sector, due to its global and high risk nature, has gone furthest in recognizing the wide impact that companies can have on all human rights and not only labour rights. Generally speaking, mining companies have the most detailed human rights policies and subscribe to various codes of conduct and tools relevant to their activities in high-risk countries and conflict zones, such as the Voluntary Principles on Security and Human Rights.32 Of the analysed companies, all the ones that belong to the extractive sector, plus a forestry business, commit themselves to respect indigenous people and their culture. Land management is also a key concern for the sector and beyond as land rights have increasingly become an issue in the global South. However, only three of the seven mining companies in the mapping mentioned it in their various policy statements.

                                                                                                                         30 Youth Career Initiative (YCI) < http://www.youthcareerinitiative.org/aboutus.html> accessed 5 January 2014 31 UN Guiding Principle 17 32 Voluntary Principles on Security and Human Rights, http://www.voluntaryprinciples.org/ accessed 20 November 2013

   

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Gaps The majority of companies lack a gender perspective This mapping did not look specifically at how companies framed gender issues but instead used the wider category of 'vulnerable people' as reference. This definition encompassed women, castes, LGBT and ethnic groups. As we have seen, these groups of people are usually protected by non-discrimination policies. However, while gender equality is certainly acknowledged as a key priority and supported by all companies, its scope seems to be limited to employment related measures. The wide-ranging impacts of gender discrimination should not only be analysed and tackled in the workplace but should form the basis for all considerations on CSR issues in the marketplace, the supply chain and the wider community. Most workers along the supply chain and at the bottom of it, especially in the garment sector, are women and are routinely discriminated and harassed.33 For example, in Bangladesh women with very low pay and subject to poor working conditions represent the majority of the labour force.34 Moreover, there is ample evidence that applying an explicit gender focus on companies' strategies can have substantial business benefits.35 Clearly, gender empowerment does not solely depend on companies, as the causes of gender inequality and exploitation are deep-rooted and structural. Hale and Wills explain that women often suffer from the double workload of factory labour and household work which makes it difficult for them to form and join trade unions and effectively claim their rights.36 Women in the informal sector do not have any legal protection so the role of governments in eliminating barriers to formal work is very important. On the other hand, in the formal sector many trade unions will often not be representative of the female workforce so companies need to pay special attention with whom they engage with if they want a truly inclusive and participatory dialogue with its stakeholders.37 A useful policy tool for gender issues, which was never referred to by any of the reviewed companies, is the UN 'Women Empowerment Principles’, which sets out guidelines to address inequality.38 The living wage is discussed in very generic terms or not at all. In the past few years there has been a rise in interest in the issue of a living wage from a variety of stakeholders both in the developing world and in the West. A declaration of intent signed at a recent conference convened by the German Federal Ministry for Economic Cooperation and Development and the Dutch Ministry of Foreign Affairs

                                                                                                                         33 Brigitte Hamm, 'Challenges to Secure Human Rights through Voluntary Standards in the Textile and Clothing Industry' in Wesley Cragg (eds.) Business and Human Rights (EE,2013) 34 Sameer Khatiwada, 'A quiet revolution: Women in Bangladesh' (ILO, 29 January 2014) <http://www.ilo.org/global/about-the-ilo/newsroom/comment-analysis/WCMS_234670/lang--en/index.htm> accessed 30 January 2014 35 CARE, 'In Profit and Out of Poverty: The Business Case for Engaging with Poor Farmers in Bangladesh’s Dairy Sector' (2011) LPS 36 Angela Hale and Jane Wills, ‘Women working worldwide: transnational networks, corporate social responsibility and action research’ (2007) GN 453 37 Global Labour University, ‘Gender and Trade Unions’ (2011) <http://www.global-labour-university.org/fileadmin/GLU_research_projects/Gender_and_trade_unions/Summary_report_for_GLU_webpage_Mar_2011_1.pdf> accessed 6 January 2014 38 Women Empowerment Principles <http://www.weprinciples.org> accessed 2 January 2014

   

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calls on stakeholders to 'show their commitment to realizing living wages in international supply chains' and to develop a 'shared understanding of the concept of a living wage and its importance.'39 The living wage is included in ILO Conventions 95 and 131, and according to Art. 23 UDHR, 'everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity’.40 Failures in guaranteeing a living wage can have an impact on a number of human rights, from the right to the child to the right of the protection of the family so the role of business is crucial. The reviewed companies adopt different standards in regards to this issue. The majority accept the principle of a living wage but do not elaborate what this constitutes in practice. Most notably, according to a 2009 Labour Behind the Label report, 'no brand or retailer is paying its workers a living wage or has put together a systematic program of work that is likely to raise wages to an acceptable level in the near future'.41 Most surveyed companies use the living wage definition interchangeably with minimum and legal wages when often there can be a wide gap between the two. Minimum wage, especially in the developing world, is often set at a low level and is not revised on an adequate basis. For example, the minimum wage in Cambodia is currently set at 75 USD a month while the Asia Floor Wage Alliance (an alliance of garment workers' unions, worker representatives and NGOs from 6 Asian garment producing countries) has calculated that a living wage that considers the cost of housing, food, clothing, health and education is 283 USD.42 Other companies used much more generic language. Boeing, for example, writes that:

As a global company, we seek to provide employees with compensation and benefits that are fair and equitable for the type of work and geographic location (local market) where the work is being performed, and competitive with other world-class companies.43

The problem with statements such as the above is that it is not clear what Boeing means by ‘fair compensation’. Companies need to be more transparent about their definition of a living wage by using real figures and by disclosing the benchmark that is used to establish what the living wage is. However, none of the companies reviewed do this. Having a publicly available living wage benchmark that can be compared with the demands made by unions or NGOs would avoid serious human rights violations. Of course, one of the challenges in paying a living wage is that there is no universally accepted method of measuring one. An ILO report analysed 26 different methodologies that have been applied in high-income countries.44 Clearly, a one-size fits all approach does not work. However, the lack of an agreed                                                                                                                          39 Institute for Human Rights and Business 'Top ten business and human rights issues 2014, <http://www.ihrb.org/top10/business_human_rights_issues/2014.html> accessed 23 October 2013 40 Universal Declaration of Human Rights (adopted 10 December 1948 UNGA Res 217 A(III) (UDHR) art. 23 41 Labour behind the Label, 'Let’s Clean Up Fashion: the state of pay behind the UK high street' (2009) <http://www.waronwant.org/attachments/Lets%20clean%20up%20fashion%202009.pdf> accessed 25 January 2014 42 Clean Clothes Campaign, 'A wage you can live on', <http://www.cleanclothes.org/livingwage/a-wage-you-can-live-on> accessed 25 January 2014 43 Boeing, Code of Basic Working Condition and Human Rights, <http://www.boeing.com/boeing/careers/culture/code.page> accessed 2 November 2013 44 Richard Anker, 'Estimating a living wage: A methodological review' (2011) CWE 29

   

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definition or methodology for measuring a living wage should not excuse companies from not taking workers' needs into consideration. 63% of companies write about their positive contribution to human rights, often equating them to philanthropic activities. The respect, protect and remedy framework outlined in the Guiding Principles indicates that companies are expected to have a more proactive approach than in the past in regards to human rights. In this respect, companies will often dedicate a paragraph in the human rights section of their annual reports to activities that actively promotes the advancement of human rights, often of the socio-economic type. The positive policies that mostly get reported are usually limited to workers rights and equal opportunities in the work place. Some companies will actively promote affirmative action in order to ensure the advancement of minorities and women while others will ensure that workers and their families fully enjoy their human rights. For example, Ferrovial, a Spanish transportation multinational company, commits itself to improving the quality of life and facilitating the social integration and employment of family members with disabilities.45 In most cases, examples like this one are often presented with little explanation to how the commitment is actually translated in practice. The role of companies in fighting systemic human rights abuses can also be important, as they can be powerful advocates for pro-human rights policies. This may mean having to deal with the wider socio-political context through lobbying and involvement with government officials. However, most companies do not disclose this kind of information, limiting their reporting to specific human rights violations. For example, food company Arla writes that for 'several years it has tried to offer work to women in Saudi Arabia'.46 Only recently has this become possible but it is unclear if Arla actively worked to promote gender equality in Saudi Arabia though policy changes at the state level. Other positive contributions that companies mention are often related to the livelihood of the communities in the area they operate, especially in the developing world. Sometimes it is difficult to understand whether these programmes are actually being implemented with a long-term human rights vision in mind or if they are just strategic philanthropy actions aimed at attracting public sympathy. Donations to visible causes and/or collaboration with charities can have a positive impact on a wide range of human rights including the right to education, to water and to health. However, as the reporting of these actions are often presented as simple anecdotes, companies need to communicate better how their work fits in the broader framework of human rights and development.

                                                                                                                         45 Ferrovial, ‘2012 Annual Report’ (2012) <http://memoria2012.ferrovial.com/recursos/doc/2012/Download/46168_254254201383358.pdf> accessed 2 November 2013 46 Arla, ‘Sustainability Report’ (2012) <http://www.arla.com/Images/arla.com/PDF/CSR/2012/ENG_2012.pdf> accessed 6 November 2013  

   

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Commitments to specific human rights risk management processes i. Committing to respect human rights and embedding human rights within

corporate culture The UDHR is clearly associated with the rising importance of embedding human rights within business structure as 68.2% of the companies referred to it in their policy commitments. Generally speaking, most of the companies have a stand-alone human rights policy, which appears alongside other documents such as health and safety guidelines and employee codes of conduct. Other companies will have a more integrated approach; i.e. have a human rights statement that makes reference to other human rights related issues and guidelines present in the management processes. Companies will also often make broad commitments to the UN Guiding Principles and other conventions and voluntary initiatives tools. For example, on its website, Mondi, a South African company specializing in packaging subscribes to the Universal Declaration on Human Rights and committed to the:

• 'United Nations (UN) Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights;

• UN Global Compact; • Fundamental Rights Conventions of the International Labour Organisation; • Organisation for Economic Co-operation and Development (OECD) Guidelines

for Multinational Enterprises; and • Voluntary Principles of Security and Human Rights'47

The same percentage of companies (68%) that mention the UDHR also applies to the companies that are members of the UN Global Compact, the largest CSR initiative in the world. The Global Compact encourages businesses worldwide to adopt socially responsible policies and to report back on their implementation. 67% of the surveyed companies also follow the reporting guidelines set out by the Global Reporting Initiative (GRI). Formed in 1997, the GRI aims to make sustainability reporting standard practice. The human rights issues included in the GRI Guidelines are human rights and procurement practices, nondiscrimination, gender equality, freedom of association, collective bargaining, child labour, forced and compulsory labour, security practices, indigenous rights and the number of human rights assessments and grievances.48 The widespread use of these two tools indicates the importance that businesses give to ensuring that human rights are included in their reporting. However, critics have pointed out that these instruments lack proper monitoring frameworks that can guarantee the accuracy of business' disclosures.49 Without doubt, there are often huge differences between companies in the way they communicate their 'progress' to the UN Global Compact or report the implementation of GRI guidelines. Companies adopt different strategies to ensure that they become rights-aware by                                                                                                                          47 Mondi, Annual Report, (2012) <http://sd-report.mondigroup.com/2012/social/our-people/human-rights> accessed 3 November 2013 48 GRI G 3.1 Guidelines <https://www.globalreporting.org/reporting/latest-guidelines/g3-1-guidelines/Pages/default.aspx> accessed 29 December 2013 49 Alberto Fonseca, 'Barriers to Strengthening the Global Reporting Initiative Framework' (2010) University of Waterloo <http://www.csin-rcid.ca/downloads/csin_conf_alberto_fonseca.pdf> accessed 29 January 2014

   

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integrating human rights at all operative levels. All the human rights policies and statements are publicly available online and companies will aim to communicate their commitments in a variety of ways. The majority of companies have training programmes for their employees; through there is no one standard model that is followed. Mazda trains employees that are being promoted so they understand that human rights are a key issue at senior level while other companies use webinars or one-on-one education sessions. Control Risks, a consultancy firms, requires that every new employee reads their Human Rights Policy as part of their induction. In both case, it is not always clear what the human rights training involves and if it is tailored specifically for the sector or not. In some cases the information that is given is more detailed, especially for companies that are part of the GRI as one of its indicators specifically addresses human rights training. For example, ENI states that it invested in 576 hours of training on human rights in 2012 and that its security guards attend workshops on the voluntary principles of security and workers.50 However, the recurring problem with the GRI reporting is that the scope of disclosure is discretionary. This guarantees a degree of transparency as we know what companies are reporting and what they are not but there are no requirements to explain the rationale behind certain reporting decisions. Applying the Commitment to business relationships In terms of business relationships, this review to a large extent mirrored the findings of the IHRB 2012 State of Play report.51 It is clear that human rights have become an important component of a company's considerations when starting a new business relationship but perhaps not to the degree that the UNGP envisages. The mainstreaming of human rights in corporate decisions is not homogeneous and is highly varied. Companies will refer to human rights via different documents and instruments when establishing a business relationship. Sometimes they will use their own code of conduct and/or human rights policy, often presenting them as 'corporate values' to define their ethical integrity and expectations. In other cases, companies will have a specific code of conduct solely for their suppliers, which might or not make reference to their own human rights policies. Some of the reviewed companies refer only to specific human rights instead of the wider range usually included in their own code of conduct, prioritizing the ones that are deemed most relevant (i.e. forced and child labour) For example, Weyerhauser has an extensive human rights policy but towards its suppliers, it 'only' expects them 'to maintain fair working conditions and freedom of engagement and association.’52 Some will reference MSI requirements specific to a certain industry that will take into account the supplier's ability to meet social and environmental standards. The great majority of companies do not mention human rights in relation to other non-suppliers business partners (i.e. subsidiaries and joint ventures).

                                                                                                                         50 ENI sustainability report 2012 < http://www.eni.com/en_IT/attachments/sostenibilita/pdf/Eni_For_2012_Eng.pdf accessed 22 November 2013 51 IHRB, 'State of Play: The Corporate Responsibility to Respect Human Rights in Business Relationships' (2012) 52 Weyerhause, 'Managing Suppliers', <http://www.weyerhaeuser.com/Sustainability/Performance/Governance/ManagingSuppliers> accessed 15 November 2013

   

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ii. Assessing human rights risks and impacts At the heart of the corporate responsibility to protect lies 'human rights due diligence', described by the UNGP as a process that companies need to undertake 'to identify, prevent, mitigate and account for how they address their impacts on human rights.'53 An important component of this process includes assessing actual and potential human rights impacts so that the company knows that its actions do not have any hidden risks to people. As Ruggie argued, the principle of due diligence can be viewed as a game changer as the relationship between companies and human rights is not based on 'naming and shaming' anymore but instead on 'knowing and showing'. 54 This necessarily means that companies have to asses not only their internal management processes but also the human rights impacts linked to their business relationships over which they might not have direct control. Sometimes this can be difficult as companies have to implement due diligence on a global and complex supply chain. Moreover, negative human rights impacts can occur at any level of the supply chain, from the first tier suppliers to the bottom base where the raw materials are produced. As observed the recent Oxfam report of Unilever's activities in Vietnam it is not enough to expect that regional operations will follow the company's standards outlined in its various documents.55 This review indicates that there is an overarching sentiment amongst businesses that impact and assessment cannot occur only in response to a crisis or at the start of a business relationship but must be an on-going process. Indeed, many companies have started rolling out new supplier codes that require human rights screenings for their operations. There are considerable differences in the way companies identify and manage human rights risks. Some will incorporate human rights consideration within their other existing due diligence tools that may include safety and labour audits, etcetera. Other companies have instead designed specific and stand-alone human rights impact assessment procedures to be used along other auditing measures. The criteria adopted when assessing risks impacts varies. In terms of sectors and industries, companies seem to be well aware of the specific human rights that are generally at risk in their activities and so will focus on those. Some companies geographically map areas where the presence of human rights risks is potentially higher even if they will not fully disclose information on the methodology used. For instance, mining company Vale has developed a 'Global Human Rights Risk Map for a global assessment of risks of human rights violations’.56 A few companies are more explicit and state the countries in which they have chosen not to operate due, in part, to human rights factors and the presence of conflict. ABB states that 'based partly or wholly on human rights considerations, ABB has not taken any business in Sudan or North Korea for several years.'57                                                                                                                          53 UN Guiding Principle 15 54 Ruggie, J. (2010) Statement by Professor John Ruggie, 65th session of the General Assembly Third Committee Item 68 (b), New York. <www.ohchr.org/Documents/Issues/Business/2010GA65Remarks> accessed 2 February 2014 55 Oxfam, 'Labour Rights in Unilever's supply chain' (2013) 56 Vale, ‘Sustainability Report’ (2012) <http://www.vale.com/EN/aboutvale/sustainability/links/LinksDownloadsDocuments/2012-sustainability-report.pdf> accessed 12 November 2013 57 ABB, 'Human rights performance information' <http://www.abb.com/cawp/abbzh258/e6284b307aef46b3c125785c008122a0.asp> accessed 11 November 2013  

   

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Understanding the operating context is clearly important as knowledge of the country in which a company is involved will greatly limit the level of risk and create more leverage when dealing with a delicate situation. For this reason companies will need to rely on relevant expertise and dialogue with the right stakeholders, something which most seem aware of. The extractive sectors have the most sophisticated programmes in this sense, seemingly giving a high priority to communicating with the communities affected in the areas in which they operate. The majority of companies also adopt a variety of methods to ensure the continuous monitoring of their operations, primarily through self-assessments and third party audits. Most use a combination of both while some prefer to conduct reviews only through their staff. Companies tend not to write the reasons for adopting one method over another although sometimes the use of external auditors is justified on the basis that it demonstrates credibility. However, no company disclosed details of third party auditors. The overall trend is that there is not enough disclosure on the methods that companies employ in their impact and assessments and no final human rights assessment (similar to the one Oxfam did for Unilever) was made available in the public domain. While this can be explained partially due to the sensitivity of certain operations, it greatly impedes effective participation and monitoring from civil society and interested parties. iii. Integrating and acting on findings from assessments into day-day staff roles

While checklists aimed at assessing compliance with a company's policy can be an important auditing tool there is a risk, as Muchlinski stated, that 'at worst it could degenerate into a tick-box exercise designed for public relations purposes'.58 Moreover, auditing can become meaningless if there is not an effective management of risks in place. For this reason, it is important that companies have an organizational structure which assigns responsibility to people who have knowledge of what proper human rights due diligence entails. There is clearly no simple approach to embedding human rights in every aspect of a company's management. As mentioned above, many will use training tools to make sure everybody in the company is aware of the company's human rights commitments. In general, companies seem increasingly receptive to the importance of integration and due diligence and to this effect some have started changing their internal structures. Usually companies will have a CSR management team that deals with all issues across the sustainability spectrum while a few have created specific human rights teams. For instance, Mazda has formed a Human Right Committee, which directly communicates with the human resources department and senior executives for all matters regarding human rights.59

                                                                                                                         58 Peter Muchlinski, 'Implementing the New UN Corporate Human Rights Framework: Implications for Corporate Law, Governance and Regulation.' (2012) BEQ 145, 148 59 Mazda, 'CSR Vision', <http://www.mazda.com/csr/csr_vision/respect/> accessed 10 November 2013

   

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iv. Tracking company impacts on human rights and actions taken in response to risk and impact assessments

Lack of transparency on process and performances is common for most companies. In terms of using quantitative and qualitative indicators, only 14% of the reviewed companies state that they have developed (or are in the process of developing) their own key performance indicators (KPIs) on which there doesn't tend to be much disclosure. KPIs are defined as:

quantifiable measurements that are agreed in the initial stages and which reflect the critical success factors of a company in implementing the identified actions and measures KPIs will differ depending on the company and the business activity.60

As information is scarce, it is not clear if human rights are a dominant element in the creation of these indicators or if other CSR considerations prevail. The content of these indicators is usually limited to the quantitative sphere (i.e. number of people trained on human rights and number of health and safety accidents) with no elaboration on the wider context. A company might report that there where 6 incidents happened in the workplace with little explanation to why and where the incidents happened and how they were dealt with. For example, Yara states that there were two cases of discrimination reported which have been investigated and not does provide further information.61 The great majority of companies will use the GRI guidelines and the UN Global Compact to state what their non-financial aims are and what results have been achieved towards them. As for the other areas where the GRI reporting framework is used, there can be substantial differences between companies in terms of what and how information is presented. However, almost all will focus more on describing the procedures over performance and impact. Where human rights impacts are reported there is noticeable lack of balance as the focus will generally be on the positive contribution of the company. There is a general reluctance to report on any negative aspect of the organisation's performance but this is especially true on human rights violations in the supply chain. v. Operating grievance mechanisms at the operational level The UN Guiding Principles emphasise the importance of the right to remedy and of grievance mechanism that can address human rights issues at an early stage before they escalate beyond the company's control. 82% of the reviewed companies report having mechanisms in place to deal with complaints and grievances coming from the workforce. These mechanisms vary in structure and process and usually include confidential hot-lines, ombudsmen or non-judicial dispute resolutions. Such procedures are an important feature of human rights due diligence even if not all companies refer to them using human rights language. Often companies will present complaints mechanisms as channels for whistle blowers on the non-compliance with the ethical

                                                                                                                         60 International Finance Corporation, ‘Guide to Human Rights Impact Assessment and Management’ HRIAM 4 61 Yara, 'Human Rights Indicators', <http://www.yara.com/sustainability/reporting/gri_reporting/human_rights_performance/human_rights_indicator_points/index.aspx> accessed 12 November 2013

   

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values of the various codes of conduct. Emphasis is often put on transparency and accessibility in order to make sure that workers do fear for any reprisals. The review noticed that an increasing number of companies are keeping and reporting the data on the number of complaints received but with little detail on context and impact. The majority of companies who disclose the number of grievances will report very low scores. While this may indicate an effective approach to human rights assessments it could also mean that abuses are not being reported appropriately. The right to reparation as part of the right to an effective remedy and a well-established principle of international law is not mentioned by any company. Main Findings

• Labour related rights and the environment are the issues that receive most attention from companies across all sectors.

• Companies tend to focus on particular human rights that are relevant to their industry.

• The extractive sectors cover the widest range of human rights related issues. • The majority of companies lack a gender perspective. • The living wage is discussed in very generic terms or not at all. • 63% of companies surveyed write about their positive contributions to human

rights, often equating them to philanthropic activities. • There is insufficient transparency on impact and assessment procedures. • Reporting mostly focuses on procedures rather than on outcomes. • There is an imbalance between positive and negative impacts and qualitative

and quantitative reporting. • There is a lack of information regarding key performance indicators (KPIs)

Conclusions This mapping of a selected number of companies shows that human rights are clearly on the corporate agenda and that CSR is widely considered to be key for business success. The proliferation of code of conducts and voluntary human rights policies is indicative of the fact that companies have adapted (or are in process of adapting) their organisational structures to the 2011 UN framework. While more and more companies are realizing that they can affect the whole spectrum of human rights and refer to the UDHR, the language that they employ beyond their policies is still centred on the rights most relevant to their industry. Certainly, the ILO seems to have a very important role in developing global standards universally accepted for workplace rights. This review also suggests that there needs to be a wider debate around the usefulness of adopting a human rights lenses for issues which have traditionally not being considered as part of the human rights arena. Should access to medicines be viewed as a right to health issue? Are the adverse impacts of pollution intrinsically linked to the human rights of indigenous populations? Clearly, the GRI framework, with its distinct separation between the social and environmental spheres has influenced the way companies report and understands their impacts. However, initiatives such as Integrated Reporting might

   

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pave the way towards more holistic approaches.62 Beyond the code of conducts and policies, the most critical aspect of the UN framework is without doubt the process of due diligence, something companies seem aware of. However, it is clear that, especially in regards to impact assessments, there is a gap between saying and doing. As the International Labour Rights Forum stated in 2010:

'The inadequacy of the audit system could not be more clearly demonstrated. It has been the critique from the labour movement for the last decade that the audit system fails to detect lack of compliance on a day-to-day basis'63

This review found that the most noticeable gap regarding human rights impact assessments and performance reporting is a clear lack of transparency. Even if companies will do regular audits they will usually not publish them, limiting their usefulness. This is true also for human rights performance indicators, which still lag behind environmental tracking mechanisms. Indicators are very important as they can illustrate the decision making process of a company and promote dialogue with other stakeholders. Most importantly, companies need to disclose more information on their impacts on human rights, both positive and negative, instead on only focusing on procedures, however important they may be, As Laurence Roca and Cory Searcy wrote in a 2012 report, the features of performance reporting ‘can be enhanced though corporate, industry and government efforts to improve the transparency and credibility of sustainability reports and indicators.’64 In this sense, the tragic events of the Rana Plaza factory may prove to be a watershed moment in the CSR sector.65 The Rana Plaza tragedy led to the consequent development of the Bangladesh Accord, an independent agreement signed by 100 companies from 19 different countries designed to ensure the safety of all garment factories in Bangladesh.66 The agreement is overviewed by a variety of NGOs and the ILO acts as the independent chair. This accord is legally binding and calls for companies to do business in Bangladesh for a minimum of five years so that there is sufficient time to implement all necessary measure and to ensure proper audits are carried out. This active collaboration between governments, companies, trade unions and NGOs might represent a move away from solely voluntary mechanisms towards a more nuanced and holistic approach that does not necessarily shy away from contemplating the use of regulatory tools. .

                                                                                                                         62 Integrated Reporting, http://www.theiirc.org/ accessed 3 December 2013 63 International Labour Rights Forum, ‘Garib & Garib in Bangladesh’ <http://www.laborrights.org/creating-a-sweatfree-world/sweatshops/factory-profiles/garib-garib-in-bangladesh; 2010>  64 Laurence Roca and Cory Searcy, Reporting on Corporate Sustainability Performance, (2012) http://searcy.blog.ryerson.ca/files/2013/11/TCB-DN-V4N21-12.pdf accessed 23 January 2012 65 On 24 April 2013, Rana Plaza, an eight-story commercial building, collapsed in Savar, a sub-district in the Greater Dhaka Area, the capital of Bangladesh. The 1129 workers that were killed were making clothes for sale in Britain, Denmark, France, Germany, Spain, Ireland, Canada and the United States. <http://www.bbc.co.uk/news/world-asia-22476774> accessed 1 February 2014 66 The Bangladesh Accord < http://www.bangladeshaccord.org/> accessed 20 January 2014

   

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Multi-Stakeholder Initiatives

Overview and Methodology In order to provide concrete examples of trends and gaps of human rights language within the research on the Multi-Stakeholder Initiatives (MSIs), an analysis of 29 MSIs was conducted that looked at specific rights, issue areas (health and safety, conflict areas, vulnerable groups, etc) and the processes which the MSIs require their participants to conduct with their human rights commitments and reporting. Codes of Conduct, Codes of Participation, Policy Statements, and/or Standards of Participation were the sources used for the language. For the purposes of this section, ‘codes’ and ‘standards’ will be used synonymously, unless referencing a specific document. The analysis took a similar approach to that of the company survey using the Universal Declaration of Human Rights, the United Nations Guiding Principles on Business and Human Rights, the International Labour Organization Core Conventions, and the European Commission Human Rights Sector Guides as points of reference.67 While there were a few noticeable trends and gaps, the sampling was not large enough to render any solid conclusive evidence. The observations made while analyzing the MSIs do however support some arguments on the future of reporting human rights violations in the private sector and raise questions about the language within human rights standards. For example, what defines ‘human rights language’ is currently unclear. For example, an MSI’s standard might have a category labeled “Health and Safety” which according to UDHR Article 25, is a human rights issue:

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.68

It would be more concise if the MSIs were to integrate their health and safety standards within their human rights language. Another trend that is reviewed in this section is how different sectors focus on specific rights. Depending on the industry the MSI was responsible for, certain rights language was more developed than others. For example, the Responsible Jewellry Council has a lengthier and more specific code in terms of security and conflict issues due to the fact that conflict minerals have been a subject of international concern since the early 2000’s. Within the Code, the Council references the Kimberly Process, a scheme put in place by the UN General Assembly Resolution 55/56.69 The Kimberly Process was implemented by the United Nations General Assembly in an attempt to solve the problem of conflict diamonds and their profits that were being used by rebel groups.70 Another example is how an MSI such as the

                                                                                                                         67 For clarification on these guidelines, please see introductory paragraphs of the ‘Companies’ section 68 Universal Declaration of Human Rights (adopted 10 December 1948 UNGA Res 217 A(III) (UDHR) art. 25(1) 69 Responsible Jewellry Council’s Code of Practices (2013) <http://www.responsiblejewellery.com/rjc-certification/code-of-practices-certification13> accessed 22 November 2012 70 UNGA Res 56/263 (9 April 2002) UN Doc A/Res/56/263

   

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Fair Labor Organisation is likely to spend more time and language on the different labour rights under the International Labour (ILO) Core Conventions. Another quick note to make that is observed in the companies’ section is that the language pertaining to the environment and environmental standards was much stronger across the board than that of the human rights language. Trends and Gaps Regarding Specific Human Rights Labour Rights Unsurprisingly, the ILO Core Conventions are fairly well covered within the different MSI standards. The right to organize and freedom of association are mentioned in almost 50% of codes, collective bargaining a 30% of the time, equal remuneration over 50% of the time, and anti-discrimination and anti- forced labour language written in 50% of the MSI Codes of Conduct, Codes of Practice, Codes of Participation and/or Standards. Anti-slavery or anti-forced labour language is used by almost all of the MSIs. As mentioned previously, the ILO Conventions were put into force starting in 1932 with the Forced Labor Convention.71 As a result, there has been ample time for companies and MSIs to develop their standards and polices relating to labour rights. This explains the lack of gap within the MSIs’ language on their various labour rights policies. The one note would be the consistency of the language they use. As mentioned in the section regarding the companies, ‘forced labour’ and ‘slavery’ are assumed to be one and the same. In order to convey a stronger connotation in the future, it is submitted that ‘slavery’ be used in place of ‘forced labor.’ Civil and Political Rights It is evident that civil and political rights are an important part of MSI documentation. They are mentioned at a noticeably higher rate than labour and economic, social, and cultural rights. The rights to life, liberty and security of person, freedom of expression, and recognition before the law are the most mentioned rights. Rights that receive very little mention are the right to be free from torture or inhuman punishment, recognition before the law, right to fair trial, and right to asylum. The language relating to migrant workers is less clear about what particular workers the standards apply to. Some of the MSIs use the term ‘contract worker’ and others use ‘migrant.’ The definition of a contract work is ‘work specified in the short term contract, esp[sic]as opposed to regular employment.72 Contract workers do not have to be migrant workers at all, so there should be no assumption that language pertaining to contract workers is synonymous with language pertaining to migrant workers. It is submitted that MSIs should clarify the difference between contract workers and migrant workers in their language.

                                                                                                                         71 ILO, Convention concerning Forced or Compulsory Labour (No. 29) adopted 28 June 1930 72 ‘contract work’ (Collins Dictionary Online, 2014) <http://www.collinsdictionary.com/dictionary/english/contract-work> accessed 28 January 2014

   

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Economic, Social and Cultural Rights There are no noticeable trends in regards to economic, cultural, and social rights. The most notable gap in language for economic, social, and cultural rights is that pertaining to indigenous peoples. Certain MSIs, such as the Rainforest Council, discuss the rights of indigenous peoples at great length, but overall, there is not much mention of it. It seems to be fairly sector specific. One might find that to be the case when the sector falls in the rainforest and on the lands of indigenous peoples as opposed to the electronics industry (with the Electronic Industry Citizenship Coalition being one of the MSIs that did not mention the rights of indigenous peoples).73 Reference to general cultural rights, or the right to enjoy one’s culture were lacking and right to education was only mentioned in 10% of the MSIs. Enforcement Mechanisms One of the more difficult trends to isolate are the ones concerning MSIs work with their companies and organisations to enforce the specific compliance, grievance, and remedy mechanisms put in place for the companies to use once they have documented the rights violations. Most of the MSIs require their companies to use either internal mechanisms or an outside auditor to review all levels of operation within the company. Some, like Social Accountability International, require the companies to publish their requirements and codes for all of the company members to have access to, so that they can watch for potential rights violations and report them.74 Most of the MSIs have language in their codes discussing how the companies or countries should incorporate the goals and enforcement mechanisms of the MSI into their own respective codes. For example, the Roundtable on Sustainable Soy Association suggests that ‘each soy producing country is encouraged to make a national interpretation of the standard which, once endorsed by the Roundtable, will become responsible for the certification of the country.’75 The fact that soy producing countries can interpret the standards to fit their own laws emphasizes the fact that the UN Guiding Principles, as well as any other guidelines pertaining to business and human rights are still very much soft law principles. This presents a problem if certain countries do not have strong requisite laws in place for business and human rights.

                                                                                                                         73 As a note, the EICC incorporated a wide range of human rights language in their code, ranging from security and conflict issues to right to privacy 74 Social Accountability International Guidance, (2008) <http://www.sa-intl.org/index.cfm?fuseaction=Page.ViewPage&pageId=1463 > accessed 21 November 2013 75 Roundtable on Sustainable Soy Association, ‘Code of Conduct’ (2011) <http://www.responsiblesoy.org/index.php?option=com_docman&Itemid=30&lang=en> accessed 21 November 2013  

   

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Rights-specific requirements from MSIs focusing on specific industry sectors Extractives: should they be the only ones with a strong focus on security? It makes sense that mining related MSIs would discuss in their policy statements conflict and security more than an MSI that pertains to factory work. However given the condition of some states in the world, it would be prudent for all MSIs to require their companies and organisations to have mechanisms put in place for when conflict might arise. For example, Burma has emerged as a key investment location for a range of companies. In its 2013 annual report, Human Rights Watch states that ‘[c]ommunal violence against Muslim communities in central Burma spread during 2013, with a series of apparently coordinated attacks against Muslim communities and property.’76 Should Fair Trade International or the Better Cotton Initiative have participants in their initiatives investing in or sourcing from Burma it would be wise to have language in place in case violence continues. This perpetuates the argument that certain standards should not just be sector specific. Another note to make is that when discussing vulnerable groups in their standards or policy statements, the MSIs often just refer to women and children. There is no mention of ethnic groups in conflict. Agricultural: Environment is Important, but People are Too All of the MSIs pertaining to agriculture that were reviewed have extensive environmental standards. Most of these pertained to the erosion of soil, water quality, pesticides (which also overlapped with worker health and safety), and pollution. As a whole, the environmental standards seemed to be far more developed than the human rights standards. A predictable trend amongst agricultural based MSIs is the language relating the use of forced labour and slavery. 80% of the MSIs reviewed have very clear wording in regards to these issues. For example, the Fair Labor Association states ‘There shall be no use of forced labor, including prison labor, indentured labor, bonded labor or other forms of forced labor.’77 Overlap MSIs sometimes refer to another initiative’s standards as a baseline for their code. The International Council on Mining and Metals used the Voluntary Principles on Security and Human Rights in lieu of writing their own standards.78 The use of the word ‘voluntary’ needs to be noted though, as this emphasizes the fact that soft law is still the way of human rights standards in the business world. The Rainforest Alliance-SAN and the Rainforest Alliance Standard Verification Scheme are another example of MSIs that share a set of standards, which pertain to both the environment and human rights. In general statements regarding human rights, standards reference the UN Global Compact, UDHR, the ILO core conventions, or the UN Guiding Principles. As an example of a general statement, the Business Social Compliance Initiative references multiple sources relating to

                                                                                                                         76 Human Rights Watch, ‘World Report 2014’ (2013) < http://www.hrw.org/reports/2014/01/21/world-report-2014> accessed 24 Jan 2014 77 Fair Labor Association, ‘Code of Conduct’ (2012) <http://www.fairlabor.org/our-work/labor-standards> 78 International Council on Mining and Metals, ‘10 Principles’ <http://www.icmm.com/our-work/sustainable-development-framework/10-principles> accessed 21 November 2013

   

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human rights.79

In accordance with the ILO Conventions, the United Nations' Universal Declaration of Human Rights, the UN's Conventions on children's rights and the elimination of all forms of discrimination against women, the UN Global Compact and the OECD Guidelines for Multinational Enterprises and other relevant internationally recognised agreements, the BSCI Code of Conduct aims to attain compliance with certain social and environmental standards.80

Commitments to specific human rights risk management processes Trends A good percentage of the MSIs reviewed have a statement somewhere in their codes committing to the principles of the Universal Declaration of Human Rights or the principles of the International Labour Organisation. An example of a comprehensive statement is the Clean Clothes Campaign stating ‘Minimum standards related to these rights are derived from the ILO conventions, the ILO Declaration on Fundamental Principles and Rights at Work in 1998, as well as on the Article 23 of the Universal Declaration of Human Rights.’81 A good example of a vague statement is that of the Roundtable of Sustainable Palm Oil, which states that ‘growers and millers must respect human rights.’82 As the last statement gives little guidance, it is submitted that there might be lack of understanding amongst the members of the Roundtable on what human rights are defined as. i. Committing respect to human rights and embedding human rights within corporate

culture.

Roughly 69% of the MSIs reviewed commit to respect for human rights and include language to embed it within their corporate culture. The language used is broad however, and this could lend to the debate about whether or not there needs to be a more standardized terminology while drafting future standards. A few of the MSIs reviewed, like the Responsible Jewellry Council are far more specific with their human rights language: ‘Human rights are universal rights and freedoms regarded as belonging to all the people, above the laws of any individual nation.’83 This is also an example of how an MSI might reference the UN Guiding Principles and UDHR.

                                                                                                                         79 The reference to the convention on the rights of the child and to the convention against all forms of discrimination against women should be noted as exceptions to the norm 80 Business Social Compliance Initiative, ‘Code of Conduct (2009) <http://www.bsci-intl.org/resources/code-of-conduct> accessed 17 November 2013 Also, it should be noted that the reference to the conventions on women and children are the exception and not the norm in general statements made by MSIs regarding human rights. 81 Clean Clothes Campaign, ‘Principles’ <http://www.cleanclothes.org/about/principles> accessed 19 November 2013 82 Roundtable on Sustainable Palm Oil, ‘Principles and Criteria’ (2013) <http://www.rspo.org/file/PnC_RSPO_Rev1.pdf > accessed 20 November 2013 83 Responsible Jewellry Council, ‘Code of Practices’ (2013) <http://www.responsiblejewellery.com/rjc-certification/code-of-practices-certification13/> accessed 21 November 2013

   

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The Council goes as far as to say:

The UN Guiding Principles on Business and Human Rights (also known as the “Ruggie Principles”) was adopted in 2011 and has become the primary reference for the private sector’s responsibility to respect human rights. While it does not create any new international laws or obligations, it elaborates the implications of existing standards and practices for States and businesses and integrates them within a single, comprehensive template. The Guiding Principles have been welcomed by all stakeholder groups.84

ii. Assessing Human Rights Risks and Impacts

The MSIs reviewed use several different tactics when assessing human rights risks and impacts. Some MSIs, like the Business Social Compliance Initiative, require their participants to comply with all the applicable laws of their country and incorporate the ILO and UN conventions within the company or organisation codes as a baseline for their assessment.85 Initiatives like the Rainforest Alliance Standard Verification Scheme require an assessor to review the participants in order to make sure they are complying with the practices and values laid out in their code.86 Rarely do they have language like the Responsible Jewellry Council’s, which specifically states that the Human Rights Due Diligence should include assessment and integration.87 EcoVadis does something similar by hiring CSR experts to verify that their organisations are fulfilling the commitments. Their assessment methodology is similar to that of the GRI and the UN Global Compact.88 iii. Integrating and acting on findings from assessments into day to day staff roles Roughly 50% of the MSIs surveyed are found to have language pertaining to the role of their staff or employees in the implementation of the different standards with which the organisations are to comply. Two trends presented themselves: 1) education will provided for key players within the company at every level of the operation on the various human rights issues, and 2) the standards are to be posted in the work place, visibly and in all the languages required for the employees to understand. The latter is submitted as a key component, as it is important that not only are the standards advertised, but that they are clearly understood as well. For example, the Business Social Compliance Initiative has it written into their Code of Conduct that ‘the Company must have the BSCI Code of Conduct translated in its entirety into the appropriate local language(s) and have it displayed in a prominent position at its facility…’89

                                                                                                                         84 Responsible Jewellry Council, ‘Code of Practices’ (2013) <http://www.responsiblejewellery.com/rjc-certification/code-of-practices-certification13/> accessed 21 November 2013  85 Business Social Compliance Initiative, ‘Code of Conduct’ (2009) <http://www.bsci-intl.org/resources/code-of-conduct> accessed 21 November 2013 86 Rainforest Council. ‘Verification and Certification’ (1987) <http://www.rainforest-alliance.org/certification-verification> accessed 21 November 2013 87 Responsible Jewellry Council, ‘Code of Practices’ (2013) <http://www.responsiblejewellery.com/rjc-certification/code-of-practices-certification13/> accessed 21 November 2013 88 Ecovadis Buyer Solutions (2013) <http://www.ecovadis.com/website/l-en/ecovadis-sp.EcoVadis-6.aspx> 89 Business Social Compliance Initiative. ‘Code of Conduct’ (2009) <http://www.bsci-intl.org/resources/code-of-conduct> accessed 17 November 2013

   

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iv. Tracking company impacts on human rights and actions taken in response to risk and impact assessments

This proves to be much more sector specific. Again, the Responsible Jewellry Council is very clear on the need to assess conflict related human rights violations.90 This of course makes sense, given that conflict minerals have become a focus on the international stage.91 The Ethical Trading Initiative was specific in mentioning supply chain issues. They noted that in today’s world, the supply chain is extensive and it is important to track every level of the operation.92 v. Communicating to potentially affected stakeholders and the public The commitment to transparency is the strongest commitment made by the surveyed MSIs. As stated before, the ICMM uses the Global Reporting Index as their standard for reporting.93 The Global Network Initiative state that ‘participants will be held accountable through a system of (a) transparency with the public…’94 62% of the MSIs reviewed had similar language. Another example is that of the Roundtable on Sustainable Soy Association:

This standard has been designed to be used within a voluntary certification system. All those seeking certification should do so with a commitment to transparency with respect to the requirements of the standard, including a spirit of constructive engagement with stakeholders and sharing of non-commercially sensitive information.95

vi. Operating grievance mechanisms at the operational level From the review of this particular group of MSIs, it was difficult to identify any clear trend in the approaches taken by the initiatives to incorporate OLGM systems into their process steps. Some, like the Forest Stewardship Council, stated that any stakeholder could file any complaint with the FSC when they felt necessary.96 The Ethical Trading Initiative does                                                                                                                          90 Responsible Jewellry Council, ‘Code of Practices’ (2013) <http://www.responsiblejewellery.com/rjc-certification/code-of-practices-certification13/> accessed 19 November 2013 91 The Institute of Human Rights and Business wrote a commentary (Margot Wallstrom, ‘EU Key to Further Progress on Conflict Minerals’, (IHRB 22 August 2013)< http://www.ihrb.org/commentary/board/eu-key-to-further-progress-on-conflict-minerals.html> accessed 3 February 2014) in 2013 highlighting how the European Union is key to further progress with the issue of conflict minerals and mining. It references the UN Security Council Resolution 1857 and the US Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which have been instrumental in raising the due diligence in areas such as the Democratic Republic of the Congo. The Dodd-Frank Act Section 1502 defines conflict minerals as ‘(A) columbite tantalite, also known as coltan (the metal ore from which tantalum is extracted); cassiterite (the metal ore from which tin is extracted); gold; wolframite (the metal ore from which tungsten is extracted); or their derivatives; or (B) any other mineral or its derivatives determined by the Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country.’(U.S. Wall Street Reform and Consumer Protection Act 2010 (H.R. 4173, 1502)) 92 Ethical Trade Initiative, ‘Principles of Implementation’ (2009) <http://www.ethicaltrade.org/resources/key-eti-resources/principles-implementation> accessed 16 November 2013 93 International Council on Mining and Metals, (2003) <http://www.icmm.com/our-work/sustainable-development-framework/10-principles> accessed 15 November 2013 94 Global Network Initiative, ‘Principles’ (2012) <http://globalnetworkinitiative.org/principles/index.php> accessed 15 November 2013 95 Roundtable of Responsible Soy Association, ‘Code of Conduct’ (2011) <http://www.responsiblesoy.org/index.php?option=com_docman&Itemid=30&lang=en> accessed 15 November 2013 96 Forest Stewardship Council, ‘Policy for Association’ (2007) <https://ic.fsc.org/policy-for-association.315.htm> accessed 12 November 2013

   

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however have a more constructive and detailed complaint system, one that might be beneficial for future standards writers to review.97 Some initiatives, such as Social Accountability International, make separate statements regarding their OLGM systems pertaining to different human rights violation, an example being their statement regarding the use of child labor:

The company shall establish, document, maintain, and effectively communicate to personnel and other interested parties, policies and written procedures for remediation of children found to be working in situations which fit the definition of child labour above, and shall provide adequate financial and other support to enable such children to attend and remain in school until no longer a child as defined by SA8000.98

In addition, the definition of child labour and its interpretations are provided. The Social Accountability Initiative defines a child as ‘any person less than 15 years, unless the minimum age for work or mandatory schooling is stipulated as being higher by local law, in which case the stipulated higher age applies in that locality.’99 Gaps and other interesting findings when aligning MSIs’ process requirements to their rights-specific requirements The most noticeable gaps in the review of the MSIs arises from the fact that MSIs are sector specific so their human rights language tend to cover the rights that predictably fall within their sector. The Voluntary Standards on Security and Human Rights will cover different rights, particularly those that might be violated in conflict areas, than that of the Global Network Initiative, which covers the Internet sector. The latter focuses primarily on freedom of expression and right to privacy. While they do make a general statement saying that all rights under the UDHR and the International Covenant of Civil and Political Rights should be respected, it might be arguable that rights such as the right to property, freedom of association, recognition before the law, merit specific mention as all can encounter problems within the realm of the internet.100 There has been continual debate in regards to where intellectual property fits in with human rights.101

The gravity of the issues involved and the wide implications of the debate on intellectual property and human rights provide a strong justification for scholars to undertake research in the area. The changing laws, policies, technologies, and practices have also brought about five sets of new developments that justify a reexamination of the complex interrelationship between intellectual property and human rights.102

                                                                                                                         97 Ethical Trade Initiative, ‘Principles of Implementation’ (2009) <http://www.ethicaltrade.org/resources/key-eti-resources/principles-implementation> accessed 12 November 2013 98 Social Accountability International, ‘Standards of Implementation’ (2008) <http://www.sa-intl.org/_data/n_0001/resources/live/SA8000ChildLabour.pdf> accessed 14 November 2013 99 Ibid. 100 Global Network Initiative, ‘Principles’ (2012) <http://globalnetworkinitiative.org/principles/index.php> 12 November 2013 101 Peter K. Yu, ‘Intellectual Property and Human Rights in the Nonmultilateral Era’, 64 Fla. L. Rev. 1045 (2012) 6 102ibid.    

   

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This statement helps support the idea that human rights policies need to be reevaluated in order to fit in with the changing nature of the Internet era. Another policy statement to make note of is the Electronic Industry Citizenship Coalition’s, as it makes a very specific statement regarding security and conflict issues:

Participants shall have a policy to reasonable assure that the tantalum, tin, tungsten and gold in the products they manufacture does not directly or indirectly finance or benefit armed groups that are perpetrators of serious human rights abuses in the Democratic Republic of the Congo or an adjoining country. Participants shall exercise due diligence on the source and chain of custody of these minerals and make their due diligence measures available to customers upon customer request.103

This is important to reflect on because it shows that they are reviewing the entirety of their supply chain, or at least making the commitment to. Recommendations

• The category of ‘human rights’ within policy statements or codes of conduct or practice should include the language of health and safety standards, labor rights, and any rights covered under UDHR Articles 23 and 25.

• The rights of Indigenous Peoples should be stated within all policy statements or codes of conduct or practice.

• The rights of migrant workers should be stated clearly within all policy statements or codes of conduct or practice.

• MSIs outside of the extractives sector should require their participants to have better standards relating to conflict and security issues.

• Policy Statements and Codes of Practice should make more reference to other international instruments such as the United Nations Convention on the Rights of the Child and to the Convention on the Elimination of All Forms of Discrimination Against Women.

• Concise grievance mechanisms need to be put in place. If it is difficult to report a grievance, or the procedure is too vague, it will be hard for the violations to be heard or seen.

Conclusion While the survey of Multi Stakeholder Initiatives was not broad enough to come up with concrete conclusions, it was informative in showing where the gaps in the human rights language articulated in the commitments of the MSIs. That gaps mostly occur due to sector specificity and while this makes sense it is important for the MSI standards to cover the range of rights covered in UDHR as the future is often unpredictable and businesses will need to be able to cover a range of conflicts and human rights issues should they arise. Just because a company is not conducting business in a conflicted area now does not mean it will not be in the future. It is better to be prepared for a whole range of issues than to retrospectively wish that there had been language in place that would have made a difference.

                                                                                                                         103 Electronic Industry Citizenship Coalition, ‘Code of Conduct’ (2012) <http://www.eicc.info/eicc_code.shtml> accessed 20 November 2013

   

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Stock Exchanges

Introduction Since the introduction of the UN Guiding Principles, the sphere of business and human rights has come to incorporate a multitude of innovative ways, all aimed at addressing human rights violations and encouraging corporate responsibility. Responsible investment is a recent example; according to the United Nations-supported PRI documents, this entails an approach to investment that explicitly acknowledges the relevance to the investor of environmental, social and governance factors and of the long-term health and stability of the market as a whole. It recognizes that the generation of long-term sustainable returns is dependent on stable, well-functioning and well-governed social, environmental and economic systems.104 An increasing number of organizations are reporting their sustainability performance. Various factors are driving this growth, including stakeholder and peer pressure, crises, growing awareness of the strategic importance of sustainability and, of course, new reporting requirements – especially from governments and stock exchanges105 This section of the report aims to examine and analyze the results of the mapping process pertaining to stock exchanges. Overview The history of sustainability indices in stock exchanges began when the Dow Jones Sustainability Index (DJSI) was created in 1999 at the New York Stock Exchange. The second index to be created was the FTSE4Good at the London Stock Exchange, and the third index, created in 2003, was the JSE, in Johannesburg, South Africa.106 The sustainable stock exchanges landscape is a generally positive and dynamic one, albeit with some very significant gaps and weak points, some difficult complexities and misunderstandings, and many remaining challenges and opportunities. The number of exchanges that are strategically involving themselves with responsible investment and sustainability issues – particularly in relation to ESG information - is growing107, the recent conference in Rio (hereafter referred to as the Rio+20)108 is evidence of this.

                                                                                                                         104 United Nations Principles of Responsible Investment, ‘What Is Responsible Investment?’ <http://www.unpri.org/viewer/?file=wp-content/uploads/1.Whatisresponsibleinvestment.pdf >Accessed 23 January 2014 105 Global Reporting Initiative. ‘Carrots and Sticks’ ( 2010) <https://www.globalreporting.org/resourcelibrary/Carrots-and-Sticks.pdf> Accessed 23 January 2014 106 BM&FBOVESPA Sustainability Report. ‘The Value of the ISE’ (2012) <http://www.bmfbovespa.com.br/indices/download/The-value-of-ISE.pdf>Accessed 25 January 2014 107 World Exchanges Federation < http://www.world-exchanges.org/files/focus/pdf/focus_june%202012.pdf>Accessed 23 January 2014 108 United Nations Conference on Sustainable Development. ‘The World We Want’ <www.uncsd2012.org/content/documents/727 The Future We Want 19 June 1230.pdf> Accessed 29 January 2014  

   

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The formal agenda of Rio+20 focused on two main themes: how to build a green economy to achieve sustainable development and lift people out of poverty; and how to improve international coordination for sustainable development. The sustainable investment market can be divided into three main categories:

• ‘Socially responsible’ or ‘ethical’ investment funds that use corporate social responsibility as a positive or negative filter in portfolio construction. This is sometimes combined with shareholder activism.

• ‘Green’ investment strategies specializing in companies that provide solutions to sustainable development problems e.g. clean technology, renewable energy, environmental services, and healthcare.

• ‘Mainstream’ integration of non-traditional financial factors (including ESG factors) into financial analysis, portfolio construction and share ownership. This is often combined with shareholder engagement.109

Methodology The process leading to this report commenced with a mapping of 24 stock exchanges110 with specific focus on the listing requirements of each stock exchange, the majority of which are emerging markets such as Brazil, China, Indonesia, Malaysia and South Africa. The data was collected by way of an in-depth, web-based exploratory method of research and looked at publicly available information, including country specific legislation/regulation pertaining to stock exchanges and listing criteria, stock exchange annual reports and reports from other organisations conducting research in the area of sustainability. Categories mapped included human rights requirements, ESG requirements 111 and examples of company disclosure. No other stock exchanges were looked at. Preview The first part of this section is comprised of the trends identified through the mapping process; the second part sets out the gaps identified. The third part is made up of two parts: the recommendations, sub-divided into three short sections, and finally, the conclusions drawn from the data analysis.

                                                                                                                         109 World Exchanges Federation. ‘Sustainability’ <http://www.world-exchanges.org/sustainability/WFE-ESG.pdf > Accessed 24 January 2014 110 Appendix I. 111 Environment, Social and Governance factors

   

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Trends in listing requirements or criteria around specific human rights Sustainability Indexes 40% of the stock exchanges mapped have what is commonly known as Sustainability Indexes. This trend has seen a considerable increase since the Rio +20 Conference, particularly amongst emerging markets. Egypt for example, has an ESG Index, South Africa a Social Responsibility Index, Brazil a Corporate Sustainability Index, Mexico a Sustainable Investment Index, Denmark, Norway, Finland and Sweden all form part of the Nordic Sustainability Index etc., the purpose of which is to raise the profile of companies that perform well along the three parameters of environmental, social and corporate governance responsibility when compared to their peers.112 30% have similar initiatives, such as China and Indonesia’s Social Responsibility Indexes, or the Nordic Exchanges’ Ethical Index113, however, the term used most often remains ‘Sustainability Index’. Luxembourg and Japan are the two anomalies, neither having initiatives similar to a sustainability index, but rather, a set of guidelines or principles created by the exchanges to serve as a guide for listed companies with regards to ESG factors. Strong focus on the Environment in terms of ESG Factors A large majority of the Stock Exchanges focus on the Environmental aspect of ESG, such as raising climate change awareness, biodiversity initiatives, environment impact assessment and carbon emissions; more so than Social or Corporate Governance factors. For example, Thailand’s SET noted in its annual report that it reviewed the criteria on listing securities on the Market for Alternative Investment for the renewable energy industry, which is beneficial to the economy and the environment. The new listing criteria encourages operators to continue their projects by reducing capital restriction requirements following the country’s electricity generation development plan for 2010 – 2030 as prescribed by the Energy Ministry, which aims to increase consumption of renewable energy by at least 5 % of total electricity generation by 2030.The Exchange also established the Corporate Social Responsibility Institute in 2007 to promote social and environment responsibility consciousness among firms.114 A similar approach is used by China’s Shanghai Stock Exchange115, which has created a set of guidelines to encourage listed companies to disclose information such as company environmental protection policy, annual environmental protection objective and effect; annual total energy consumption; environmental protection investment and environmental technology development status; emission/pollutant types, quantity, concentration and destination; construction of environmental protection equipment and operational status; production waste treatment, disposal and recycling status.116 Established exchanges such as

                                                                                                                         112 Egypt Stock Exchange. ‘ESG Index Methodology Report’ (2012) <https://us.spindices.com/.../methodology-sp-egx-esg-index.pdf?force>Accessed 23 January 2014 113 Not to be confused with the Nordic Sustainability Index 114 Thailand Stock Exchange. ‘SET Corporate Responsibility Report’ (2012). <http://www.set.or.th/en/about/annual/files/CSR_En2012.pdf> Accessed 3 February 2014 115 Shanghai Stock Exchange. ‘Rules’ < http://www.sse.com.cn/cs/zhs/xxfw/flgz/rules/> Accessed 3 February 2014  

 

   

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the Nordic Stock exchanges (Denmark, Norway, Sweden and Finland) place considerable emphasis on sustainable development and environmental initiatives in their listing criteria. It should be noted however, that some stock exchanges were found to utilize a more holistic approach, for example, Brazil’s BM&F BOVESPA Index subdivides its ‘social’ category into Labour (which relates to employee training, unions, worker health and safety); human rights (which relate to supplier relations, combatting discrimination, freedom of association and collective bargaining, combatting child labour and forced labour; Society (community relations, combatting corruption, influencing public policy) and Products (consumer health and safety, labelling, marketing and advertising). Strong focus on Company Disclosure to promote transparency According to the Institute of Human Rights and Business 117corporate responsibility reporting is an accountability mechanism of particular relevance to investors in that ‘corporate communication is an important element of the UN Guiding Principles’ human rights due diligence process, and can take many forms, from personal meetings to formal public reports.’ A notable development in this regard is the “Report or Explain” initiative. In early 2012 BM&FBOVESPA adopted Report or Explain guidance recommending that listed companies state in the Reference Form whether they publish a regular sustainability report and if not, why not. The first results of the initiative were published during Rio+20. This initiative provides an excellent example as to the manner in which stock exchanges can positively contribute to developing the scope of sustainable investment; it encourages companies to progressively adhere to the practice of reporting to their investor’s information and results which are related to environmental, social, and corporate governance (ESG) issues. The objective is to provide investors and other interested parties quick access to this type of information118 using a mix of mandatory requirements (report) and voluntary prompts (the choice to report, and explain why if you do not). It is based on a minimum requirement that companies either report on their sustainability performance, or explain why if they do not. Companies are afforded space to develop their practice, decide on the scope of their reporting, and decide whether and what disclosure frameworks to use.119 Similarly, the Luxembourg Exchange’s aforementioned guidelines were initiated following the European Commission launch of an Action Plan aimed at enhancing corporate governance within the European Union in 2003. The scope is to be in line with international practice and the recommendations of the European Commission, whilst taking into account the interests of all the stakeholders. The Ten Principles and their recommendations are highly flexible and are based on a “comply or explain” system.120

                                                                                                                         117 Institute for Human Rights and Business, ‘Investing the Rights Way: A Guide for Investors on Business and Human Rights’ (2013) 118 BM&FBOVESPA. ‘Report or Explain’ <http://www.bmfbovespa.com.br/novo-valor/en-us/report-or-explain.asp> Accessed 3 February 2014 119 Global Reporting Initiative. ‘Carrots and Sticks’ (2010) <https://www.globalreporting.org/resourcelibrary/Carrots-and-Sticks.pdf> Accessed 25 January 2014 120 Luxembourg Stock Exchange. ‘Rules’ <http://www.bourse.lu/applicationservices/CorporateGovernance.jsp> Accessed 3 February 2014

   

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Integration of Listing Rules/Requirements and Corporate Social Responsibility into domestic legislation and/or regulatory standards Approximately 80% of the stock exchanges mapped adhere to, or have indicated, domestic regulatory standards and/or legislation pertaining to ESG, CSR or reporting factors. In 2009 the Institute of Directors of South Africa issued the King Code and Report on Corporate governance in South Africa (King III). King III established corporate citizenship and sustainability as principles key to the success of corporations and directed corporate Boards of Directors to pursue both and report on their progress. King III requires integrated sustainability reporting and third party assurance. It applies to all South African companies and is a listing requirement for the Johannesburg Stock Exchange. It has been prescribed that entities follow an integrated reporting format, which means describing financial, social and environmental factors in a holistic manner within the report. In addition, it recommended the integration of financial and sustainability reporting on a regular basis, including engagement with stakeholders and independent audits121 In May 2001 the French legislature passed the New Economics Regulations Act requiring most publicly traded companies to include in their financial reports specific corporate social responsibility data. In 2002, French regulators issued guidelines specifying that these reports include data on employees and employment practices including layoffs, absenteeism, compensation, equal opportunity employment, union relations, health and safety, training, employment of the handicapped; and on environmental issues including water and energy consumption and efficiency, air and water emissions, hazardous wastes, biodiversity, legal compliance, and environmental expenditures. In 2008 Denmark amended its Financial Statements Act to require its largest 1,100 businesses to include details in their annual report on: 1) corporate social responsibility policies, 2) how these policies are translated into actions, and 3) what the business has achieved as a result of its CSR initiatives and future expectations. In China, the State-owned Assets Supervision and Administration Commission (SASAC) released a directive in January 2008 strongly encouraging state-owned enterprises to follow sound CSR practices and report on CSR activities. All state-owned enterprises are expected to publish CSR reports as of 2012.122 Gaps in listing requirements or criteria around specific human rights Insufficient explicit reference to human rights According to the Institute of Business and Human Rights, social criteria range from requirements for listed companies to have ‘high standards of integrity’ to acting with ‘honesty, integrity, fairness, due skill and care, diligence and efficiency’.123 For purposes of this report, ‘economic, social and cultural rights’ are defined as being those human rights

                                                                                                                         121 Regulation 28. Johannesburg Stock Exchange Rules <http://www.jse.co.za/Investor-Relations/Sustainability/Socially-Responsible-Investment-Index.aspx> Accessed 3 February 2014 122 HausCenter, ‘On Materiality’ (2010) <http://hausercenter.org/iri/wp-content/uploads/2010/05/OnMateriality_Final.pdf> 24 January 2014 123 Institute of Human Rights and Business, ‘Investing the Rights Way’ (2013)

   

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relating to the workplace, social security, family life, participation in cultural life, and access to housing, food, water, health care and education124. Apart from sustainability requirements, mostly geared towards environmental protection, and labour rights, more than 70% of the exchanges mapped lack explicit reference to the term ‘human rights’, though it can be argued that ‘human rights’ are implied through the corporate terminology contained in CSR reports. There are some exceptions however, for example, South Africa’s Johannesburg Stock Exchange is one of the most awarded stock exchanges in terms of sustainability, largely due to its Social Responsibility Index (SRI). In terms of specifically setting out its listing criteria in terms of ESG factors, the Index is a good example: The requirements under ‘environment’ state that: A company should continually seek to improve its environmental performance by:

• Working to reduce and control its direct negative environmental impacts; • Promoting awareness of its significant direct and indirect impacts; • Working to use natural resources in a sustainable manner; and • Committing to risk reduction, reporting and auditing

In terms of the ‘social’ requirement, it sets out that:

A company should demonstrate a commitment to social sustainability and good stakeholder relationships by:

• Treating all stakeholders with dignity, fairness and respect, recognising their rights to life and security and free association, and their rights to freedom from discrimination;

• Actively promoting the development and empowerment of its employees and the community;

• Ensuring that core labour standards are met and good employee relations maintained; and

• Working to promote the health and safety of its employees, through the use of targets, monitoring performance against targets and reporting on performance.

• Critical issues such as HIV/AIDS and black economic empowerment (BEE) are measured separately.

Finally, in terms of ‘corporate governance’, the requirements are that:

A company should:

• Uphold and support good corporate governance practices as the foundation for its business policies and practices, through strategies to achieve and maintain internationally recognised corporate governance standards and implementing sound ethical practices;

                                                                                                                         124 Office of the United Nations High Commissioner for Human Rights. ‘Factsheet 33: Frequently Asked Questions on Economic, Social and Cultural Rights.’ <http://www.ohchr.org/Documents/Publications/FactSheet33en.pdf> 25 January 2014  

   

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• Work towards long term growth and sustainability by assessing and managing the risks to sustaining its business while adapting to changing demands, trends and macro-economic driving forces;

• Identify and manage the broader impact of the company within the company’s sphere of influence or where the company operates from a social, environmental, ethical and economic perspective, directly and indirectly.125

There is more of a focus on Corporate Social Responsibility in comparison to ESG factors

The European Commission has defined Corporate Social Responsibility (CSR) as ‘a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis’.126 The Commission played an integral role with regards to the development of public policy promoting CSR since the establishment of its 2001 Green Paper, together with the establishment of the European Multistakeholder Forum on CSR.127This, coupled with the countless number of initiatives geared towards corporate responsibility, means CSR has been developed much more than ESG factors in the corporate sphere. ESG factors are referred to primarily with regards to corporate governance. Professor Jan Eisbouts, in his inaugural lecture at Maastricht University, in 2011, explained this by stating that corporate governance has traditionally been formally directed only to listed companies, despite the fact that ‘the regulatory anatomy of corporate governance is similar to that of CSR’.128 Two gaps were identified during the mapping process in this regard. The first was the incorporation, by listed companies, of CSR reports in addition to their annual reports, which contained in depth sections dedicated to corporate governance. The second was the focus on labour issues and labour rights in listing requirements. While commendable and indicative of the strides that have been taken in terms of corporate responsibility in comparison to the situation a few years ago, it is submitted that this indirectly creates a vacuum with regards to other human rights, if indeed labour rights are to be assumed as falling within the definition of human rights. Admittedly, the requirement of corporate governance reporting from listed companies provides an explanation in terms of the preference of CSR over ESG factors.

                                                                                                                         125  Johannesburg Stock Exchange, ‘Rules’ <http://www.jse.co.za/Investor-Relations/Sustainability/Socially-Responsible-Investment-Index.aspx> Accessed 3 February 2014  126 European Commission, ‘Green Paper on ‘Promoting a European Framework of Corporate Social Responsibility’ COM(2001)366 127 Menno Kamminga. EIUC Venice School of Human Rights ‘Human Rights Our Responsibility’ 2012. 128 Jan Eisbouts. ‘Corporate Responsibility, Beyond Voluntarism’ Inaugral lecture at Maastricht University (2011).

   

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Key Findings in exchange approaches to process specific criteria i. Committing to respect human rights and embedding human rights within

corporate culture Article 16 stipulates129 that as the basis for embedding their responsibility to respect human rights, business enterprises should express their commitment to meet this responsibility through a statement policy that is reflected in operational policies and procedures necessary to embed it through the business enterprise, amongst other things. Of the key developments to come out of the Rio+20 conference, the signing of a pledge by leading stock exchanges listing over 4,600 companies in developed and emerging markets The ‘founding signatories’ are the Brazilian stock exchange (BM&FBOVESPA), Egyptian Exchange (EGX), Istanbul Stock Exchange (ISE), Johannesburg Stock Exchange (JSE), and NASDAQ. Stock exchange leaders committed to the following pledge:

We voluntarily commit, through dialogue with investors, companies and regulators, to promoting long term sustainable investment and improved environmental, social and corporate governance disclosure and performance among companies listed on our exchange.130

By virtue of their being signatory to this pledge, it can be said that stock exchanges expressed a clear commitment to move towards encouraging companies listed on their respective Exchanges to invest responsibly and to respect human rights through the disclosure of ESG factors in their reporting, and subsequently, their internal operations. ii. Assessing human rights risk and impacts Stock Exchanges have the power to play a very important role in encouraging respect for human rights from the companies listed in that they have the discretion to review listing criteria and prescribe it accordingly. The mapping indicates that there is not enough reference to human rights risk and impact assessment done by stock exchanges with regard to listed companies, nor is there specific mention of human rights risk and impact assessment contained within listing criteria.

‘General Dimension: Commitments to sustainable development; alignment with good sustainability practices, such as compensation pegged to the company’s social and environmental performance and the adoption of a plan that provides a correlation between assumed risks, compensation actually paid, and company’s results; transparency of corporate information; anti-corruption policies and practices. Economic and Financial, Environmental and Social Dimensions: Corporate policies, management, performance, and statutory compliance. The Environmental Dimension has different questionnaires for each group of economic sectors, considering the specifics of each sector.’131

The above is an example of two of seven dimensions that Brazil’s ISE uses in its assessment of companies for inclusion in the Index. The majority of Stock Exchanges with sustainability indexes use similar criteria in their Index methodology. While one might argue that this does

                                                                                                                         129 UN Guiding Principles on Business and Human Rights (2011)  130 United Nations Conference on Sustainable Development ‘The World We Want’ (2012) <www.uncsd2012.org/content/documents/727 The Future We Want 19 June 1230.pdf> Accessed 29 January 2014 131 BM&FBOVESPA, ‘The Value of the ISE’ (2012) <http://www.bmfbovespa.com.br/indices/download/The-value-of-ISE.pdf >Accessed 23 January 2014

   

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not necessarily relate to human rights as such, it is included under this particular heading to illustrate reference to ESG factors by Stock Exchanges in Index inclusion criteria. iii. Tracking company impacts on human rights and actions taken in response to

risk and impact assessments The commentary on Article 18 holds that, because human rights are dynamic, assessments of human rights impacts should be undertaken at regular intervals: prior to a new activity or relationship; prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically throughout the life of an activity or relationship132. Thailand’s SET has what is known as “Best Corporate Social Responsibility Awards” to recognize listing companies with outstanding CSR performance every year. It also has a Best Newcomer Award. It can be said that these awards would fall within some kind of tracking and impact assessment as the awards use a rigorous process of screening to determine which companies have performed well that financial year.133 These initiatives and developments could be seen as a method which the stock exchange utilizes to indirectly (or, directly) assess the human rights impacts of listed companies by way of screening the select group companies that are eligible to be considered for the awards. iv. Communicating to potentially affected stakeholders and publicly (including

formal reporting) The commentary supporting Article 21 of the Principles emphasizes the responsibility to respect human rights, stating that it requires business enterprises to have in place policies and processes through which they can both know and show that they respect human rights in practice. Furthermore, it elaborates on the fact that showing involves communication, providing a measure of transparency and accountability to individuals or groups who may be impacted and to other relevant stakeholders, including investors.134 The ‘Report or Explain’ approach referred to above can be said to be an example of formal reporting. Another manner in which formal reporting is being encouraged is through guidelines and standards prescribed by such affected stakeholders as Accounting Boards etc., an example of this is used in France, where the Auditor’s standards regarding social and environmental information define diligences to be applied by auditors regarding assurance on social and environmental information in sustainability reports as well as Indonesia where Capital Markets Regulation makes it mandatory for publicly listed companies to disclose their CSR programs in their Annual Report.

                                                                                                                         132 UN Guiding Principles on Business and Human Rights (2011) 133 Thailand Stock Exchange. ‘SET Corporate Responsibility report’ (2012). <http://www.set.or.th/en/about/annual/files/CSR_En2012.pdf> Accessed 29 January 2014 134 UN Guiding Principles on Business and Human Rights (2011)  

   

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Recommendations For Investors/Shareholders Investors hold a lot of leverage and power, and can use such power to influence investment decisions made by asset managers in terms of where their money is invested. During AGMs, investors could be more vocal in favour of sustainable/responsible investments. Investors could also encourage the company to form part of sustainable investment initiatives such as the Global Reporting Initiative, and other initiatives created specifically to encourage sustainable investment. For Directors and Members of the Board In as much as the Directors of a company have a responsibility towards their shareholders to increase profits, research has shown that sustainable investments are showing favourable returns more and more as the trend develops. As such, directors could repeatedly inform shareholders of the various options available to them with regards to sustainable investment, as and when these options become known. This perhaps extends to asset managers alike, who could encourage investors to diversify their portfolios by investing some of their assets in sustainability funds or companies that have reported on their sustainability. For Stock Exchanges Stock Exchanges, as private, independent companies, should exercise their discretion to set guidelines and listing criteria in accordance with human rights issues and ESG factors, furthermore, steps could be made towards harmonizing ESG factors into CSR report guidelines, so as to promote uniformity in terms of reporting requirements. Stock exchanges could review their listing criteria from time to time and update the criteria in accordance with the current relevant issues. Where a particular Stock Exchange does not have a Sustainability Index, creating one could be a step in the right direction as tracking human rights impacts and ESG/sustainability reporting could prove to be more efficient where companies are already part of such Index, and reviewing listing criteria in terms of ESG factors may be done in an easier manner than applying them to all companies listed on the Exchange. Stock Exchanges could also conduct more human rights impact and risk assessment of companies, as well as encouraging companies to be more transparent in their disclosure with regards to sustainability; this could be done through partnership with an NGO. According to Steve Waygood, the active engagement of civil society in market governance can be shown to be a healthy and economically beneficial activity.135

                                                                                                                         135 Steve Waygood. Aviva Investors. ‘Financial Institutions and Non-Governmental Organizations: An Advocacy Partnership For Sustainable Capital Markets’ (2013)

   

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Conclusion The winds of change are indeed, blowing through the sphere of business and human rights, and the results of the mapping analysis are proof of that. Emerging markets are leading the way when it comes to sustainable investing, particularly South Africa and Brazil, whose developments need to be emulated by more exchanges. This is obviously not new: established markets such as the Nordic exchanges have paved the way for a number of years prior to the shift in momentum caused by the Rio+20 conference, this is evident in the first two trends identified, namely the popularity of sustainability indexes and the focus on the environmental aspect of ESG. The data clearly indicates a co-operation in many of the countries between governments, stock exchanges and companies through regulatory frameworks, guidelines, legislation and listing criteria, all working towards the goal of sustainability. While there still remains much to be done by stock exchanges in promoting transparency by listed companies, the growing number of initiatives that have sustainable investment as the overarching motivation for their work seem to be accelerating the rate at which the situation is improving.

   

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Conclusion The developments over the past few years in the sphere of business and human rights are positive indications of a move towards increased corporate responsibility. The prevalence of initiatives geared towards the promotion of corporate responsibility towards human rights, particularly the introduction of the Guiding Principles in 2011, means that companies and various (private) actors with vested interests now largely accept the responsibility to protect human rights. According to Christopher Albin-Lackey from Human Rights Watch:

The principles also emphasize a crucial point that could prevent many real world human rights if companies take it up effectively and in good faith: the importance of human rights due diligence.136

The scope of the mapping proved insufficient to provide concrete conclusions, in that, the number of MSIs, companies and stock exchanges mapped were somewhat limited. Nevertheless, the findings suggest that human rights language is becoming the norm in the corporate world and to reflect this, the relevant actors are changing their policies and mechanisms. This could be assisted by greater transparency across the board, as this could close the gap between process and performance, something that the mapping has shown is happening, albeit at a slow pace. In this sense, states should also do more to incentivize implementation of human rights due diligence measures.137 The use of voluntary initiatives such as the aforementioned Global Compact is commendable and necessary, but the fact remains that such initiatives are only as strong as the corporate actors decide them to be. Indeed, one of the shortcomings of the Guiding Principles remains to be the fact that they still do not contain a mechanism in terms of which implementation can be measured. To overcome this shortcoming, the mapping clearly suggested that greater cooperation is needed between states and private actors.                                                                                                                          136 Christopher Albin-Lackey, ‘Without Rules: A Failed Approach to Corporate Accountability’ (Global Policy Forum, January 31 2013) accessed 1 February 2014 137 ibd.    

   

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Muchlinski P, ‘Implementing the New UN Corporate Human Rights Framework: Implications for Coporate Law, Governance and Regulation’ (2012) BEQ 145, 148  Office of the United Nations High Commissioner for Human Rights. Factsheet 33: Frequently Asked Questions on Economic, Social and Cultural Rights. <http://www.ohchr.org/Documents/Publications/FactSheet33en.pdf> 25 January 2014

Oxfam, ‘Labour Rights in Unilever’s Supply Chain’ (2013)  Universal Declaration of Human Rights (adopted 10 December 1948 UNGA Res 217 A (III) (UDHR) art. 25(1) Pangsapa P and Smith M, 'Transforming labour standards to labour right ' in Aurora Voiculescu and Helen Yanacopulos (eds.), The Business of Human Rights (ZED, 2010)

Ratner S, ‘Corporations and human rights: a theory of legal responsibility’ (2001) YLJ 441 RI G 3.1 Guidelines <https://www.globalreporting.org/reporting/latest-guidelines/g3-

1guidelines/Pages/default.aspx> accessed Roca L and Searcy C, ‘Reporting on Corporate Sustainability Performance’ (2012) http://searcy.blog.ryerson.ca/files/2013/11/TCB-DN-V4N21-12.pdf accessed 23 January 2012

   

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Ruggie, J. (2010) Statement by Professor John Ruggie, 65th session of the General Assembly Third Committee Item 68 (b), New York. <www.ohchr.org/Documents/Issues/Business/2010GA65Remarks> accessed 2 February 2014

Shelton D 'Human Rights, Environmental Rights, and the Right to Environment.', (2005) SJIL 103

Slavin, Terry, ‘UN guidance on the business approach to human rights’ (The Guardian, 28 March 2013) <http://www.theguardian.com/sustainable-business/business-cohesive-approach-human-rights> accessed 2 December 2013

The Bangladesh Accord <http://www.bangladeshaccord.org/> accessed 20 January 2014

Thailand Stock Exchange. ‘SET Corporate Responsibility report’ (2012). < http://www.set.or.th/en/about/annual/files/CSR_En2012.pdf> Accessed 29 January 2014 UNGA Res 56/263 (9 April 2002) UN Doc A/Res/56/263 UNCHR (2005) UN Doc E/CN.4/RES/2005/69 <http://www.ohchr.org/EN/Issues/Business/Pages/SRSGTransCorpIndex.aspx> accessed 2 February 2014 UN Guiding Principles on Business and Human Rights (2011) United Nations Conference on Sustainable Development. ‘The World We Want’ (2012) <www.uncsd2012.org/content/documents/727 The Future We Want 19 June 1230.pdf> Accessed 29 January 2014 United Nations Principles of Responsible Investment, ‘What Is Responsible Investment?’<http://www.unpri.org/viewer/?file=wp-content/uploads/1.Whatisresponsibleinvestment.pdf >Accessed 23 January 2014 U.S. Wall Street Reform and Consumer Protection Act 2010 (H.R. 4173, 1502)) Voluntary Principles on Security and Human Rights <http://www.voluntaryprinciples.org> accessed 20 November 2013 Wachenfeld, Margaret, Institute of Human Rights and Business. ‘Investing the Rights Way’ (2013) Wallstrom, Margot, ‘EU Key to Further Progress on Conflict Minerals’, (IHRB 22 August 2013)< http://www.ihrb.org/commentary/board/eu-key-to-further-progress-on-conflict-minerals.html> accessed 3 February 2014) Waygood, Steve, Aviva Investors. ‘Financial Institutions and Non-Governmental Organizations: An Advocacy Partnership For Sustainable Capital Markets’ (2013)

   

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Women Empowerment Principles <http://www.weprinciples.org> accessed 2 January 2014 World Exchanges Federation. Sustainability <http://www.world-exchanges.org/sustainability/WFE-ESG.pdf > Accessed 24 January 2014

   

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Appendix I.

COMPANY INDUSTRY HEADQUARTERS AND

OPERATING LOCATIONS

ABB Energy Utilities Zurich, Switzerland; operates in approximately 100 countries

ACER GROUP IT products

New Taipei City, Taiwan; worldwide operations

ADIDAS Sports clothing and accessories

Herzogenaurach, Germany; operates in more than 160 countries

AEGON Life insurance, pensions and asset management

The Hague, Netherlands; operates in 17 countries

ALCOA

Producer of aluminium Lever House, Midtown Manhattan, New York City (Operational base in Pittsburgh); operates in 44 countries

ALLIANCE BOOTS

Health and Beauty Zurich, Switzerland; operates in 25 countries

ANGLOGOLD ASHANTI Mining Johannesburg, South Africa; operative in 11 countries

ARLA FOODS Food & Beverage Aarhus, Denmark; operative in more than 100 countries

BARCLAYS Banking London, United Kingdom; operative in over 50 countries

BOEING Aerospace Chicago, Illinois, United State; operative in 160 countries

BRITISH AMERICAN TOBACCO

Tobacco London, United Kingdom; operative in 180 countries

CARREFOUR

Retailing Boulogne Billancourt, France; operative worldwide

   

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CONTROL RISKS Consulting Professional Services

London, United Kingdom; 33 offices across the globe

DANONE Food & Beverage Paris, France; present in 150 countries

DISNEY

Media Burbank, California, United States; operative worldwide

ENI Energy Rome, Italy; present in 79 countries

FERROVIAL Transport, urban and services infrastructure

Madrid, Spain; operative in Spain, Portugal, United Kingdom, Ireland, Italy, Poland, Switzerland, Greece, USA, Canada, Chile

GOODYYEAR Manufacturing Akron, Ohio, U.S; worldwide operations

GUCCI Retailing Florence, Italy; operative worldwide

HEINEKEN Beverage Amsterdam, Netherlands; operative in over 70 countries

HILTON

Hospitality Tysons Corner, Virginia, United States; operates in 91 countries

KINROSS Mining Toronto, Canada; North and South America, Russia, and Africa

LUNDIN PETROLEUM Mining Stockholm, Sweden; Norway and South East Asia

MAZDA

Automotive Fuchu, Aki District, Hiroshima, Japan; worldwide

MONDI

Packaging and Paper; Johannesburg, South Africa, operates in more than 30 countries

NAORI GROUP

Shipping and logistics Um Uthainah, Jordan; operates in Jordan, Iraq and Syria

NESS

Software Services; Tel Aviv, Israel, operative in 18 countries

NOVOZYMES Biotechnology Bagsværd, Denmark;

   

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operates in 30 countries

OUTOKUMPU Mining Espoo, Finland; operates in 30 countries

PERSIMMON Housebuilding York, UK, operate s in the UK

RANDSTAD human resources; Diemen, Netherlands; operates in 40 countries

ROYAL CARIBBEAN CRUISE

Tourism Miami, US; operative worldwide

SECURITAS Security Stockholm, Sweden; operative in 50 countries

SODEXO

Hospitality Issy-les-Moulineaux, France; operative in 80 countries

SPECTRIS Other Egham, Surrey, United Kingdom; worldwide

TROPICAL CABLE AND CONDUCTOR

Other Tema, Ghana; Operative in West Africa

VALE

Mining Rio de Janeiro, Brazil; operative worldwide

WEYERHAUSER Forestry Federal Way, Washington, USA; North America

YARA

Chemicals Oslo, Norway; operative in more than 50 countries

   

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Appendix II. *the summaries of the MSIs use the language put forth by their websites. In an interest to save space, the MSIs with extensive membership lists have the link connecting to those lists provided* Bonsucro 20 Pond Square London N6 6BA UK Members: http://bonsucro.com/site/members/list-of-members/ Summary: Bonsucro is a global multi-stakeholder non-profit organisation dedicated to reducing the environmental and social impacts of sugarcane production while recognising the need for economic viability. Bonsucro links its name to a product or process that has been certified by an independent certification body as being in compliance with the Bonsucro Standard. It is the first global metric standard for sugarcane. With an ever-increasing membership list counting over 100 members from 27 countries representing all areas of the supply chain, and a Board of Directors that is similarly representative of the variety of industry actors, Bonsucro is a highly robust, transparent and democratic organisation that has the resources and commitment to bring about its vision: Better Cotton Initiative 22 rue des Asters 1202 Geneva Switzerland Members: Ikea Walmart John Lewis Nike Inditex Tesco M&S MQ Marimekko Ginatricot Stadium Hemtex Tommy Hilfiger Lindex Adidas RNB Retail and Brands Levi Strauss Co Natimeo AXSTORES

   

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Migros Tchibo VF Sainsbury’s KappAhl Eroglu H&M Summary: BCI is a non-profit organization apart of a roundtable initiative led by the WWF. The Better Cotton Standard System is a holistic approach to sustainable cotton production which covers all three pillars of sustainability: environmental, social and economic. Each of the elements – from the Production Principles and Criteria to the monitoring mechanisms which show Results and Impact – work together to support the Better Cotton Standard System, and the credibility of Better Cotton and BCI. The system is designed to ensure the exchange of good practices, and to encourage the scaling up of collective action to establish Better Cotton as a sustainable mainstream commodity. Fair Trade International Bonner Talweg 177 53129 Bonn, Germany Summary: Our mission is to connect disadvantaged producers and consumers, promote fairer trading conditions and empower producers to combat poverty, strengthen their position and take more control over their lives. Electronic Industry Citizenship Coalition 1737 King Street, Suite 330 Alexandria, Virginia, 22314 Members: http://www.eicc.info/about_us05.shtml Summary: Vision: A global electronics industry supply chain that consistently operates with social, environmental and economic responsibility. Mission: To enable and encourage our members to progress towards the EICC vision through a common code of conduct, collaborative efforts and shared tools and practices. As a nonprofit association incorporated in the United States, ultimate accountability resides with a Board of Directors. The board oversees organizational governance, budget, strategy, and administrative functions. Directors are elected to serve three-year terms for up to two consecutive terms. Harvested By Women 4023 Kennett Pike #286 Wilmington, DE 19807-2018 Summary: The mission of Almana Harvest Corp. is to benefit women in the world of coffee by promoting and protecting gender diverse trade. Around the world, women play a major role in the production of coffee. It is most often women who undertake the majority of the maintenance and harvesting of family-owned coffee plots. Despite this, however, they tend to have little control over harvest proceeds, and coffee industry structures seldom, if at all, make

   

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provision for women's interests. Our vision for Almana Harvest was thus born from a resolute determination to promote coffee grown and nurtured by women with the ultimate intent to provide a better, secure, and sustainable future for them and their families. The result is Almana Harvest Corp., one of a handful of nonprofit organizations working to accelerate an international marketplace for trademarked gender & sustainably certified coffee and to improve women’s rights to access to services, thereby providing social and economic empowerment. IFFO Global Standards for the Supply of Responsible Fishmeal FFO Ltd Unit C, Printworks 22 Amelia Street London SE17 3BZ United Kingdom Members: http://www.iffo.net/members-map Summary: IFFO is the international ‘not for profit’ organisation that represents and promotes the fishmeal, fish oil and marine ingredients industry worldwide. IFFO is globally respected, having observer status with the UN Food and Agriculture Organisation (FAO), and plays an advisory role with other international organisations. Clean Clothes Campaign Postbus 11584 1001 GN Amsterdam The Netherlands Summary: Since 1989, the CCC has worked to help ensure that the fundamental rights of workers are respected. We educate and mobilise consumers, lobby companies and governments, and offer direct solidarity support to workers as they fight for their rights and demand better working conditions. The Clean Clothes Campaign is an alliance of organisations in 16 European countries. Members include trade unions and NGOs covering a broad spectrum of perspectives and interests, such as women’s rights, consumer advocacy and poverty reduction. We rely on a partner network of more than 200 organisations and unions in garment-producing countries to identify local problems and objectives, and to help us develop campaign strategies to support workers in achieving their goals. We cooperate extensively with similar labour rights campaigns in the United States, Canada, and Australia. Business Social Compliance Initiative c/o FTA - Foreign Trade Association Av. De Cortenbergh, 172 1000 Brussels Belgium Summary: BSCI was launched in 2003 as an initiative of the Foreign Trade Association (FTA) in response to the increasing business demand for transparent and improved working conditions in the global supply chain. An overview of the background to BSCI can be found under Why BSCI exists. We unite over 1,300 companies around one common Code of Conduct and support them in their efforts towards building an ethical supply chain by

   

58  

providing them with a step-by-step development-oriented system, applicable to all sectors and all sourcing countries. The fundamental goals of BSCI are only achievable through a strong commitment from participants to implement the system. Our work is based on the 11 principles of the BSCI Code of Conduct, which our participants accept upon joining us. These principles ensure a strong, credible and achievable commitment from both ourselves and the participants which will ultimately help us to achieve our goal. Rainforest Alliance Standard Verification Scheme 233 Broadway, 28th Floor New York, NY 10279 USA Summary: The Rainforest Alliance works to conserve biodiversity and improve livelihoods by promoting and evaluating the implementation of the most globally respected sustainability standards in a variety of fields. Through RA-Cert, the Rainforest Alliance's auditing division, we provide our forestry, agriculture and carbon/climate clients with independent and transparent verification, validation and certification services based on these standards, which are designed to generate ecological, social and economic benefits. Marine Stewardship Council Marine House 1 Snow Hill London EC1A 2DH Summary: Our vision is of the world’s oceans teeming with life, and seafood supplies safeguarded for this and future generations. Our mission is to use our ecolabel and fishery certification program to contribute to the health of the world’s oceans by recognising and rewarding sustainable fishing practices, influencing the choices people make when buying seafood, and working with our partners to transform the seafood market to a sustainable basis. Ethical Trading Initiative 8 Coldbath Square London EC1R 5HL UK Members: http://www.ethicaltrade.org/about-eti/our-members Summary: 'Doing' ethical trade is much harder than it sounds. Modern supply chains are vast, complex and span the globe. Labour issues are themselves challenging. For example, what exactly is ‘a living wage'? What should a company do if it finds children working in a supplier's worksite? Evicting children from the workplace can, paradoxically, make their lives worse. ETI brings corporate, trade union and voluntary sector members together in a unique alliance that enables us to collectively tackle many thorny issues that cannot be addressed by individual companies working alone. Forest Stewardship Council Charles de Gaulle Straße 5, 53113 Bonn Deutschland/Germany

   

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Summary: Vision: The world’s forests meet the social, ecological, and economic rights and needs of the present generation without compromising those of future generations. Mission: The Forest Stewardship Council A.C. (FSC) shall promote environmentally appropriate, socially beneficial, and economically viable management of the world's forests. Members apply to join one of three chambers – environmental, social and economic – which are further sub-divided into northern and southern sub-chambers. Each chamber holds 33.3% of the weight in votes; and within each chamber votes are weighted to ensure that north and south each hold 50% of the votes. This guarantees that influence is shared equitably between different interest groups and levels of economic power. Rainforest Alliance-SAN 233 Broadway, 28th Floor New York, NY 10279 USA Summary: The Rainforest Alliance works to conserve biodiversity and improve livelihoods by promoting and evaluating the implementation of the most globally respected sustainability standards in a variety of fields. Through RA-Cert, the Rainforest Alliance's auditing division, we provide our forestry, agriculture and carbon/climate clients with independent and transparent verification, validation and certification services based on these standards, which are designed to generate ecological, social and economic benefits. Responsible Jewellry Council Dudley House 34-38 Southampton Street London, UK, WC2E 7HF Members: http://www.responsiblejewellery.com/members/certified-members/ Summary: In 2005, a group of 14 organisations from a cross section of the diamond and gold jewellery business came together to form the Council for Responsible Jewellery Practices. These founding organisations were ABN AMRO, BHP Billiton Diamonds, Cartier (part of Richemont), World Jewellery Confederation, Diamond Trading Company (part of De Beers), Diarough, Jewelers of America, National Association of Goldsmiths (UK), Newmont Mining, Rio Tinto, Rosy Blue, Signet Group, Tiffany & Co., and Zale Corporation. In 2008, the Council adopted the simpler name of the Responsible Jewellery Council (RJC). The RJC’s board structure reflects the whole of the supply chain participation of RJC Members. Elections take place annually across the board of supply chain interests and membership to RJC is open to any business in the jewelry supply chain. The development of the standards involves stakeholders at all level of the supply chain. Roundtable on Sustainable Soy Association Uruguay 1112 3°piso C1016ACD Buenos. Aires. Argentina Members: http://www.responsiblesoy.org/index.php?option=com_content&view=article&id=269&Itemid=178&lang=en

   

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Summary: The Round Table on Responsible Soy (RTRS) is an international multi-stakeholder initiative founded in 2006 that promotes the use and growth of responsible production of soy, through the commitment of the main stakeholders of the soy value chain and through a global standard for responsible production. Roundtable on Sustainable Palm Oil Unit A-37-1, Menara UOA Bangsar, No.5 Jalan Bangsar Utama 1, 59000 Kuala Lumpur, Malaysia Summary: In 2001, WWF commenced exploring the possibilities for a Roundtable on Sustainable Palm Oil. The result was an informal co-operation among Aarhus United UK Ltd, Migros, Malaysian Palm Oil Association and Unilever together with WWF in 2002. A preparatory meeting was held in London on 20 September 2002 and this was followed by a meeting in Gland on 17 December 2002. These organizations constituted themselves as an Organizing Committee to organize the first Roundtable meeting and to prepare the foundation for the organizational and governance structure for the formation of the RSPO. On 8 April 2004, the "Roundtable on Sustainable Palm Oil (RSPO)," was formally established under Article 60 of the Swiss Civil Code with a governance structure that ensures fair representation of all stakeholders throughout the entire supply chain. The seat of the association is in Zurich, Switzerland, the Secretariat is based in Kuala Lumpur with a RSPO Liaison office in Jakarta. Sustainable Agricultural Initiative Avenue des Nerviens 9-31, 1040 Brussels, Belgium

Summary: The Sustainable Agriculture Initiative (SAI) Platform is the main food industry initiative supporting the development of sustainable agriculture worldwide. Among the latest services and deliverables produced, the SAI Platform developed (or co-developed) Principles and Practices for sustainable water management at farm level; recommendations for Sustainability Performance Assessment (SPA); a standardised methodology for the dairy sector to assess green house gas emissions; an Executives Training on Sustainable Sourcing.

Social Accountability International 15 West 44th Street New York, NY 10036 Summary: SAI is a non-governmental, international, multi-stakeholder organization dedicated to improving workplaces and communities by developing and implementing socially responsible standards. SAI convenes key stakeholders to develop consensus-based voluntary standards, conducts cost-benefit research, accredits auditors, provides training and technical assistance, and assists corporations in improving social compliance in their supply chains.

   

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SEDEX Members Ethical Trade Audit 24 Southwark Bridge Rd, London SE1 9HF Members: http://www.sedexglobal.com/about-sedex/members/list-of-members/ Summary: SMETA is designed to reduce duplication of effort in ethical trade auditing, benefitting retailers, consumer brands, and their suppliers. It was developed in response to member demand for an ethical audit report format that could more easily be shared. SMETA is not a code of conduct, a new methodology, or a certification process, but describes an audit procedure which is a compilation of good practice in ethical audit technique. See more at: http://www.sedexglobal.com/ethical-audits/smeta/#sthash.Urcg7ScV.dpuf Global Network Initiative 1200 18th Street NW Suite 602 Washington, DC 20036 Members: https://globalnetworkinitiative.org/participants/index.php Summary: CT companies increasingly face pressure by governments to act in ways that may impact the fundamental human rights of privacy and freedom of expression. To help navigate those challenges, GNI covers four key issues. Fair Labor Association 1111 19th St. NW, Suite 401 Washington, DC 20036 Members: http://www.fairlabor.org/affiliates/participating-companies Summary: The mission of the Fair Labor Association is to combine the efforts of business, civil society organizations, and colleges and universities to promote and protect workers’ rights and to improve working conditions globally through adherence to international standards. Social Carbon Standard Quadra 103 Sul Rua SO-03, Lote 28 Cep 77015-016 Palmas, Brasil Summary: The SOCIALCARBON Methodology resulted in the creation of a voluntary co-benefits standard – the SOCIALCARBON® Standard – which identifies and certifies VERs generated with the application of the methodology. The SOCIALCARBON® Standard was developed to strengthen co-benefits of carbon offset projects and enhance active participation of stakeholders. It is typically used in conjunction with a carbon accounting standard, such as the VCS, ISO 14.064-2, TÜV NORD Climate Change Standard or the CDM.

   

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Voluntary Principles on Security and Human Rights Summary: Established in 2000, the Voluntary Principles on Security and Human Rights are a set of principles designed to guide companies in maintaining the safety and security of their operations within an operating framework that encourages respect for human rights. GESI c/o Scotland House Rond Point Schuman 6 B-1040 Brussels Belgium Members: http://gesi.org/ICT_sustainability_members_and_partners Summary: A sustainable world through responsible, ICT-enabled transformation. By 2014, GeSI is a globally recognised thought leader, partner of choice and proactive driver of the ICT sustainability agenda as measured by the development and use of its tools, broad member base and contribution to relevant policies. International Council on Mining and Minerals 35/38 Portman Square London, W1H 6LR United Kingdom Members: http://www.icmm.com/members

Summary: The International Council on Mining and Metals (ICMM) was established in 2001 to act as a catalyst for performance improvement in the mining and metals industry. We bring together 21 mining and metals companies as well as 33 national and regional mining associations and global commodity associations to maximize the contribution of mining, minerals and metals to sustainable development. ICMM is a membership organization, led by the CEOs of many of the world’s largest mining and metals companies and associations. ICMM is committed to driving social, economic and environmental progress. We serve as an agent for change and continual improvement. Our vision is one of leading companies working together and with others to strengthen the contribution of mining, minerals and metals to sustainable development.

4C Association Adenauerallee 108 53113 Bonn Germany Members: Advantage Coffee Company Ltd. A Rural Corretora de Café e Cereais SS Ltda. Café Africa Uganda ABN AMRO Bank N.V.

   

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Summary: The 4C Association aims to unite all relevant coffee stakeholders in working towards the improvement of the economic, social and environmental conditions of coffee production and processing to build a thriving, sustainable sector for generations to come. The 4C Association is the leading multi-stakeholder sustainable coffee platform, guiding the mainstream sector toward more sustainable production in a pre-competitive arena where all relevant stakeholders are enabled to participate. Food Justice Certified Agricultural Justice Project c/o Florida Organic Growers PO Box 12311 Gainesville, FL 32604-0311 Summary: The Agricultural Justice Project is stakeholder-driven, and committed to the principles of democratic leadership. We believe that all members of the food chain should have a role in developing and guiding our standards and certification program. AJP is governed by three committees. The Management Committee carries out daily activities, and is overseen by the Advisory Committee. The Standards Committee is convened once every 5 years to revise our standards language. Eco Vadis 4, rue du Faubourg Montmartre 75009 Paris France Summary: We believe that Sustainability is a critical source of value in today's challenging business world. Our goal is to facilitate the integration of Sustainability criteria in the Customers/Suppliers relationships. We do this by developing reliable, global and easy to use "Suppliers CSR Ratings" that help organizations manage risks and foster Eco-innovations. Professionalism, integrity, customer focus and drive for innovations are the key enablers of our success. Our teams strive to work smart, have fun and make the difference. The Bangladesh Accord and Alliance Members: http://www.bangladeshaccord.org/signatories/ Summary: The Accord is an independent agreement designed to make all garment factories in Bangladesh safe workplaces. It includes independent safety inspections at factories and public reporting of the results of these inspections. Where safety issues are identified, retailers commit to ensuring that repairs are carried out, that sufficient funds are made available to do so, and that workers at these factories continue to be paid a salary. The Accord is a legally binding agreement. It has been signed by over 100 apparel corporations from 19 countries in Europe, North America, Asia and Australia; two global trade unions, IndustriALL and UNI; and numerous Bangladeshi unions. Clean Clothes Campaign, Workers’ Rights Consortium, International Labor Rights Forum and Maquila Solidarity Network are NGO witnesses to the Accord. The International Labour Organisation (ILO) acts as the independent chair.

   

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Appendix III.  

COUNTRY LOCATION/

HEADQUARTERS

United States of America

New York

Brazil Sao Paulo

Mexico Mexico City

South Africa Johannesburg

Egypt Cairo

China Shanghai

Indonesia Jakarta

Malaysia Kuala Lumpur

Singapore Singapore

Philippines Pasig City

Thailand Bangkok

New Zealand Wellington

Japan Osaka

Norway Oslo

Denmark Copenhagen

Finland Helsinki

Sweden Stockholm

France Paris

Switzerland Zurich

Netherlands Amsterdam

Greece Athens

   

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Turkey Istanbul

Spain Madrid

Luxembourg Luxembourg City

   

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Country  &  Exchange  

Source  of  Requirement  

Human  Rights  Requirement  

ESG  Requirement   Companies  involved  (hyperlink  to  a  list)  

Examples  of  companies  disclosure  

Brazil   Corporate  Sustainability  Index  (ISE)    http://www.bmfbovespa.com.br/indices/ResumoIndice.aspx?Indice=ISE&Idioma=en-­‐US    

 

BM&FBOVESPA  is  recommending  that  as  of  2012  listed  companies  state  in  item  7.8  of  the  Reference  Form  (“Description  of  the  company’s  relevant  long-­‐term  relationships  not  elsewhere  described”)  whether  they  publish  a  regular  sustainability  report  or  similar  document  and  where  it  is  available,  or  if  not  explain  why.    

seeks   feedback   to   a  questionnaire   from  the   top   150  companies   on   their  sustainable  development  commitments,  including   human  rights   promotion   and  combating   social  inequality.  

Methodology  is  currently  being  revised  so  full  information  not  available  

http://www.bmfbovespa.com.br/Indices/download/Elegible-­‐companies-­‐2014.pdf    

Professor  José  Luiz  Rossi  Júnior  has  used  the  ISE  to  assess  whether    

corporate  social  responsibility  has  an  impact  on  the  value  of    

Brazilian  fi  rms1.  Prof  Rossi  analyzed  data  from  2005  to  2007  on    

a  sample  of  non-­‐fi  nancial  Brazilian  companies  to  assess  whether    

corporate  social  responsibility  (measured  using  ISE  inclusion    

as  a  proxy)  has  an  impact  on  fi  rm  value.  He  showed  found    

that  companies  included  in  the  ISE  have  a  higher  market  value    

compared  to  other  publicly  traded  companies,  implying  (but  not    

proving)  that  sustainability  is  the  causal  factor  for  this  premium.  

China   2006   Social  Responsibility  Guideline   for   Listed  Companies   of   the  Shezhen   Stock  Exchange  http://www.szse.cn/main/en/rulseandregulations/sserules/2007060410636.shtml  

Article  13  Companies  shall  strictly  abide  by  the  Labor  Law,  protect  the  legitimate  rights  and  interests  of  their  employees  in  accordance  with  law,  establish  and  improve  employment  systems  such  as  remuneration  and  incentives,  and  ensure  that  employees  enjoy  their  rights  and  fulfill  their  obligations.  

   

Article  14  Companies  

shall  respect  the  

dignity  of  the  

employees  and  

guarantee  their  

legitimate  rights  and  

interests,  care  for  

them,  promote  

harmonious  and  

Article  27  Companies  shall  formulate  environmental  protection  policies  based  on  their  impact  on  the  environment.  There  shall  be  dedicated  human  resources  in  charge  of  the  establishment,  implementation,  maintenance  and  improvement  of  their  environmental  protection  system,  and  furnish  necessary  manpower,  resources  as  well  as  technical  and  financial  support  to  environmental  protection.  

   

Article  28  Companies’  

environment  protection  

policies  normally  cover  the  

following  areas:  

(1)          to  comply  with  all  the  

laws,  regulations  and  rules  

that  govern  environmental  

In  August  2009,  the  Shanghai  Stock  Exchange  also  launched  

the  "Responsibility  Index",  selecting  the  top  100  socially  responsible  companies  

on  the  stock  exchange.  

http://edu.sse.com.cn/sseportal/index/en/singleIndex/000048/const/index_const_list_en_1.shtml    

 

   

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stable  relation  

between  the  

employees  and  

employer,  and  

provide  special  labor  

protection  to  female  

employees  in  

accordance  with  

State  regulations.  

They  shall  not  

unlawfully  force  

employees  to  work,  

nor  shall  they  inflict  

corporal  

punishment,  

physical  or  mental  

intimidation,  verbal  

humiliation  or  any  

other  form  of  abuse.  

   

Article  15  Companies  

shall  establish  and  

improve  the  system  of  

occupational  safety  

and  health,  strictly  

implement  relevant  

rules  and  standards  of  

the  State,  educate  the  

employees  

accordingly,  provide  

them  with  healthy  

and  safe  working  and  

living  environment,  

minimize  the  chance  

of  accidents,  and  

reduce  occupational  

hazards.  

   

Article  16  Companies  

shall  follow  the  

principles  of  pay  

based  on  work  and  

equal  pay  for  equal  

work.  Pay  shall  not  be  

deducted  or  delayed  

without  justification.  

It  is  prohibited  that  

temporary  contracts  

or  any  other  disguised  

protection;  

(2)          to  reduce  resource  

consumption,  including  

raw  materials  and  fuels;  

(3)          to  reduce  waste  

generation  and  make  every  

effort  to  recover  wastes  for  

recycling;  

(4)          to  avoid,  to  the  

greatest  extent,  waste  

generation  that  pollute  

environment;  

(5)          to  apply  

environmental-­‐friendly  

materials  and  energy-­‐

saving,  waste-­‐reducing  

design,  technology  and  

raw  materials;  

(6)          to  minimize  the  

adverse  impact  of  

corporate  performance  on  

environment;  

(7)          to  provide  trainings  

to  employees  for  the  

purpose  of  enhancing  

environmental  protection  

awareness;  and  

(8)          to  create  an  

environment  for  

sustainable  development.  

   

Article  29  Companies  shall  

implement,  as  far  as  they  

can,  facilities  and  

processes  that  allow  the  

greatest  utilization  of  

resources  and  lowest  

discharge  of  pollutants,  as  

well  as  economical  and  

rational  technology  for  

comprehensive  utilization  

of  wastes  and  pollutant  

treatment.  

 Article  30  Companies  shall  

report  to  and  file  with  the  

competent  authorities  

regarding  pollutant  

   

68  

probation  contracts  

be  signed  with  

employees  to  reduce  

their  wages  and  social  

security.  

 

 

Article  17  Companies  shall  not  interfere  with  employees’  freedom  of  religious  belief.  No  discrimination  shall  be  imposed  regarding  employment,  remuneration,  training,  promotion,  dismissal  or  retirement  due  to  ethnic  community,  race,  nationality,  religious  belief,  gender  or  age.    

 

discharge.  In  case  the  

discharge  exceeds  the  

national  or  regional  

standards,  Companies  shall  

pay  a  fee  in  accordance  

with  the  State  regulations  

and  assume  the  

responsibility  for  the  

elimination.    

Article  31  Companies  shall  

allocate  dedicated  human  

resources  for  regular  

inspection  of  

implementation  of  

environmental  protection  

policies.  Behaviors  in  

breach  of  environmental  

protection  policies  shall  be  

rectified.  

Chapter  IV        Public  Relations  and  Social  Welfare  Services  

Article  32  Companies  shall  pay  due  regard  to  the  interests  of  their  communities  in  business  operation.  The  Exchange  encourages  that  dedicated  unit  be  set  up  and  dedicated  personnel  be  allocated  to  harmonize  the  relations  between  Companies  and  communities.  

Article  33  Companies  shall,  as  

much  as  they  can,  take  

part  in  public  welfare  

activities  in  their  regions  

relating  to  environment  

protection,  education,  

culture,  science,  public  

health,  community  

development  and  poverty  

relief  in  the  best  interest  of  

the  regions.  

   

 

   

69  

Indonesia    

SRI  KEHATI  INDEX  KEHATI  has  picked  25  selected  companies  considered  eligible  to  meet  KEHATI  SRI  Index  criteria  so  that  they  can  be  used  as  guidance  for  investors.  The  presence  of  those  companies  will  be  evaluated  twice  a  year,  in  April  and  October,  and  the  result  will  be  publicized  by  BEI,  which  can  be  followed  through  www.idx.co.id   http://www.kehati.or.id/en/indeks-­‐sri-­‐kehati-­‐2.html    

 

2010  The  government   of  Indonesia   adopts   a  law   that   requires  listed   companies   to  report   on   the  effects   of   their  activities   on   society  and   the  environment.  Failure   to   do   so  necessitates   an  explanation   for   not  disclosing   this  information.  

The  fundamental  aspects  will  be  evaluated  after  the  companies  have  successfully  passed  the  initial  step.  The  aspects  include  several  areas.    3.        Fundamental  Aspects  :  

◦ Corporate  

Management  

◦ Environme

nt  

◦ Communit

y  Involvement  

◦ Business    

Manners  

◦ Human  

Resources  

◦ Human  

Rights    

http://www.kehati.or.id/en/indeks-­‐sri-­‐kehati-­‐2.html    

  http://www.kehati.or.id/images/Pengumuman%20Indeks%20SRI%20KEHATI%20BEI%20_%20Oktober%202012.pdf    

Jakarta,  November  9,  2012  -­‐  PT  ANTAM  (Persero)  Tbk  (ASX  -­‐  ATM;  IDX  -­‐  ANTM;  ANTAM)  is  pleased  to  announce  that  the  company  has  been  re-­‐listed  in  the  2012  Sustainable  and  Responsible  Investment  Biodiversity  Index  (SRI  KEHATI).  The  re-­‐listing  reflects  ANTAM’s  commitment  to  environmental  and  social  sustainability  as  well  as  good  corporate  governance  http://www.antam.com/index.ph

Luxembourg  

Luxembourg  Stock  Exchange  (LuxSE)  https://www.bourse.lu/home    

The  minimum  obligatory  statutory  dispositions,  listed  under  article  6  of  the    

Company  Law,  do  not  directly  require  any  recognition  of  a  duty  to  society.    

However  for  a  company  to  be  validly  incorporated,  its  articles  of  association  must  be  published,  in  the  aim  of  informing  third-­‐parties  of  the  companies'  legal  existence  in  accordance  with  article  9  of  the  Company  Law.  The  

The  LuxSE  does  not  at  present  offer  a  Socially  Responsible  Investment    

(SRI)  Index.  However  the  number  of  Socially  Responsible  Investment  funds  has  grown  considerably  in  Luxembourg  and  in  2006  the  Luxembourg  Fund  Labelling    Agency,  LuxFLAG,  was  launched  in  the  aim  of  promoting  the  raising  of  capital  for  microfinance  by  awarding  a  specific  label  to  eligible  microfinance  investment  funds.  This  label  is  awarded  only  if  the  Microfinance  Investment  Vehicle  (MIV)    complies  

https://www.bourse.lu/official-­‐list    

 

   

70  

company's  corporate  object  must  also  respect  public  order  and  moral  standards.  This  general  and  flexible  standard  includes  the  general  respect  of  publically  and  politically  recognised  human  rights  but  is  to  be  perceived  as  more  of  a  "negative"  than  as  a  positive  standard  in  this  sense,  as  incorporation  does  not  require  a  specific  recognition  of  a  duty  to  society,  merely  requiring  that  the  society  shall  not  violate  any  recognised  or  protected  social  practices.    

Article  28  of  chapter  VIII  of  the  LuxSE  rules  and  regulations  requires    

listed  companies  to  observe  general  criteria  of  "high  standards  of  integrity  (…)  to  act  with  care  and  diligence  (…)  and  to  behave  in  a  responsible  manner".    

with  a  certain  number  of  criteria

Malaysia   the  Bursa  Malaysia  has  not  adopted  a  responsible  investment  index  though  in  2006,  it    

launched  a  CSR  framework,  aimed  at  providing  guidance  to  Malaysian  companies  in    

relation  to  CSR.  The  Framework  covers  four  focus  areas  of  environment;  marketplace;    

community  and  workplace.    

   

The  framework  has  incorporated  criteria  drawn  from  Malaysia’s  national  

  The  framework  focuses  on  4  dimensions:    

   

•  Environment:  Climate  Change,  Energy  (Renewable  Energy,  Energy    

Efficiency,  Biofuel),  Waste  Management,  Biodiversity,  and  Endangered  Wildlife;    

•  Community:  Employee  Volunteerism,  Education  (Schools  Adoption    

Scheme),  Youth  Development,  Underprivileged,  Graduate  Employment  and  Children;  88    

   

•  Marketplace:  Green  Products,  Stakeholder  Engagement,  Ethical  

http://www.bloomberg.com/markets/companies/country/malaysia/    

 

   

71  

policies.  Under    

the  marketplace  segment,  ethical  procurement  and  vendor  development  initiatives  qualify    

as  CSR  focus  areas.  Human  Rights  are  also  referenced  throughout  guidance  materials    

elaborating  on  the  Framework,  most  recently  in  a  training  tool  for  directors.    

 

http://www.bursamalaysia.com/market/    

Procurement,  Supplier    

Management,  Vendor  Development,  Social  Branding  and  Corporate  Governance;  and    

•  Workplace:  Employee  Involvement,  Workplace  Diversity,  Gender  Issues,  Human    

Capital  Development,  Quality  of  Life,  Labour  Rights,  Human  Rights  and  Health  &    

Safety.    

Mexico   Since   February  2012   companies  wishing   to   be  considered   for  listing   on   the  Mexican   Stock  Exchange’s  sustainable  investment   index  companies   are  assessed   by   two  independent   third  party   organisations  on   environmental,  social   and  corporate  governance  practices.        

Mexican  Sustainability   Index  (MSUI)  

http://www.world-­‐exchanges.org/news-­‐views/mexican-­‐stock-­‐exchange-­‐launches-­‐sustainability-­‐index    

 

Companies  will  be  assessed  based  on  their  performance,  impact,  and  responses  to  emerging  ESG  issues.  These  issues  include  climate  change,  human  rights,  reporting,  and  policies  and  systems  to  counter  bribery.  The  companies  are  assessed  on  a  variety  of  industry-­‐appropriate  metrics  that  are  then  weighted  according  to  the  sector  the  company  belongs  to.  Only  companies  that  scored  in  the  top  50  percent  of  more  than  3,000  international  companies  are  eligible  for  inclusion  in  the  index.  As  part  of  the  qualification  process,  member  firms  will  also  have  to  comply  with  international  standards  set  by  the  United  Nations,  the  World  Bank,  ISO14000  and  others.    

  To  reach  this  At  its  beginning,  the  MSUI  comprised  twenty  three  companies:  Alfa,  América  Móvil,    

Arca  Continental,  Cemex,  Coca-­‐Cola  Femsa,  Banco  Compartamos,  Controladora    

Comercial  Mexicana,  Corporación  Geo,  Desarrolladora  Homex,  Empresas  ICA,  Fomento    

Económico  Mexicano,  Grupo  Aeroportuario  del  Centro  Norte,  Grupo  Aeroportuario  del    

Sureste,  Grupo  Bimbo  Grupo  Financiero,  Banorte,  Grupo  México,  Grupo  Modelo,    

Industrias  Peñoles  Kimberly-­‐Clark  de  México,  Mexichem,  TV  Azteca,  Urbi  Desarrollos    

Urbanos,  Wal-­‐Mart  de  México  (BMV  2011)  

 

   

72  

EGYPT   The   Egyptian  Exchange   EGX  belongs   to   the  Sustainable   Stock  Exchanges  Initiative  

 

http://www.sseinitiative.org/home-­‐slider/the-­‐egyptian-­‐exchange/    

 

The   S&P/EGX   ESG  provides   investors  with  exposure  to  30  of   the   best  performing   stocks  in   the   Egyptian  market   as  measured   by  environmental,  social,   and  governance  parameters    

 

http://us.spindices.com/indices/equity/sp-­‐egx-­‐esg-­‐index-­‐us-­‐dollar    

Community      

Human  Rights  Score    The  company  (has):  1  •  Been  involved  in  egregious  violations  of  international  human  rights  regulations/norms/conventions  at  company-­‐owned  or  supplier  facilities.  For  example,  the  company  is  involved  in  major  controversies  that  breach  international  human  rights  norm  and  conventions,  such  as  the  United  Nations  Declaration  of  Human  Rights  (UNDHR)  These  rights  include  equal  rights,  freedom  from  arbitrary  arrest,  freedom  of  association  and  assembly  etc.  It  also  covers  the  infringement  of  indigenous  peoples’  rights,  e.g.  deaths  while  protesting,  forcible  removal  from  tribal  lands  etc.  •  Been  involved  in  several  human  rights  controversies  AND  has  made  little  or  no  effort  to  address  the  allegations  or  conditions.  •  Paid  fines/penalties/settlements  in  relation  to  human  rights  violations.  Note:  it  is  very  unlikely  that  a  human  rights  controversy  would  incur  a  fine  or  penalty,  or  be  the  subject  of  litigation,  so  if  this  happened  at  all  it  would  be  particularly  noteworthy.  2  •  Been  involved  in  multiple  human  rights  controversies.  •  Been  the  subject  of  long-­‐standing  and  vociferous  protests  in  relation  to  human  rights  issues.  3  •  Been  involved  in  multiple  human  right  controversies  AND  has  made  a  credible  effort  to  address  the  allegations  and  conditions.  •  Is  the  

All  100  companies  in  the  universe  were  chosen  after  being  subjected  to  a  screening  process  which  incorporates  environmental,  social  and  governance  (ESG)  indicators  against  which  the  company’s  disclosure  practices  are  evaluated  (i.e.  the  T&D  methodology).    There  are  two  screens,  one  focusing  on  environment  &  social  indicators  and  the  other  one  focusing  on  corporate  governance  indicators.  While  the  social  and  environmental  screens  are  based  on  output  obtained  from  the  mapping  of  Global  Reporting  Initiative  (GRI),  Global  Compact  (GC)  and  Millennium  Development  Goal  (MDG)  (see  Appendix  II);  the  governance  screen  (see  Appendix  I)  is  an  adaptation  of  Standard  &  Poor's  existing  corporate  governance  methodology  to  suit  Egypt’s  markets.          

http://us.spindices.com/indices/equity/sp-­‐egx-­‐esg-­‐index-­‐us-­‐dollar    

 

   

73  

subject  of  purported  class  action  litigation  or  multiple  individual  lawsuits  in  relation  to  human  rights.  4  •  Been  the  subject  of  minor  or  one-­‐off  stakeholder/activist  protests  in  relation  to  human  rights  issues.  •  Is  the  subject  of  an  official  investigation  in  relation  to  human  rights  issues.  •  Is  the  subject  of  minor  litigation,  or  other,  as  yet  unproven,  allegations  in  relation  to  human  rights.  5  •  No  information  •  No  human  rights  issues/incidents  in  the  past  3  years.     http://www.hawkamah.org/sectors/esg/files/Methodology_SP_Hawkamah_ESG_Pan_Arab_Index_Web.pdf    

New  Zealand   the   New   Zealand  Stock    

Exchange   listing  rules   have   no  requirement   for  companies   to  account   for   social  and    

environmental  impacts   to   be   a  listed   entity.  Corporate   social  responsibility   is   not  covered  in    

the   corporate  governance  principles   of   either  the   NZSX   or   the  Securities  Commission  

       

Norway   OMX   GES   Ethical  indexes   consist   of  all   listed  companies  in   Stockholm,   Oslo,  Helsinki   and  Copenhagen,  with    

the   exception   of  those   companies  that   do   not   comply  with   the   ethical  criteria   of   the  

  NASDAQ  OMX  Group,  Inc.  (Nasdaq:NDAQ)  today  announced  the  launch  of  a  Nordic  Sustainability  Index,  the  OMX  GES  Sustainability  Index.  It  is  a  benchmark  index  which  comprises  the  50  leading  Nordic  listed  companies  in  terms  of  sustainability.  The  index  criteria  are  based  upon  international  guidelines  for  

   

   

74  

analysis  models  GES    

Global   Ethical  Standard   and   GES  Controversial.   The  criteria   are   based  on   international  standards  on    

environment,  human   rights   and  corruption.  Companies   with  production   and/or  sales   of   weapons,  tobacco,    

alcohol,  pornography   and  gambling   are   not  included.   The  OMXS30   Ethical  Index   is   ethical  version  of  the    

OMXS30   Index.   The  following   indexes  are   available   in   this  index  family:  

 

OMX   GES   Ethical  Norway  Index  

environmental,  social  and  governance  (ESG)  issues,  and  supports  investor  considerations  to  the  UN  Principles  for  Responsible  Investment  (PRI)  

Singapore   In   2011,Singapore  Exchange   (SGX)  introduced  a  Sustainability  Reporting   Guide  fori   its   listed  companies.   The  exchange   “encourages   the   company  to   disclose   its  sustainability  policy,   including  mitigation   of   risks,  performance   data  and   other   material  information   which  deepens  stakeholders’understanding   of  corporate  performance  

 

http://rulebook.sgx.com/net_file_store/new_rulebooks/s/

  5.2  The  Exchange  encourages  listed  companies  to  consider  and  provide  disclosure  on  the  following  matters,  where  material  to  their  business  operations:—    General  

(i)  Sustainability  policy  and  goals,  including  milestones,  plans  for  achieving  goals,  and  long-­‐term  aspirations;  

(ii)  Corporate  accountability  and  seniority  of  decision-­‐making  on  sustainability  issues;  

(iii)  Corporate  stance  on  bribery  and  corruption;  

(iv)  Assessment  of  sustainability  impacts,  

http://www.bloomberg.com/markets/companies/country/singapore/    

 

   

75  

g/SGX_Sustainability_Reporting_Guide_and_Policy_Statement_2011.pdf    

risks,  or  opportunities;  

(v)  Risk  management  policies  and  processes  arising  from  environmental  and  social  concerns;  

(vi)  Relevant  laws,  regulations,  international  agreements,  or  voluntary  agreements  with  strategic  significance  to  the  organisation  and  its  stakeholders,  including  fines,  sanctions,  prosecution,  and  accidents  for  non-­‐compliance  with  environmental  laws  and  regulation;  

(vii)  Issues  and  future  challenges  for  the  specific  industry  sector  that  the  company  operates  in  as  observed  by  peers  and  competitors;  

(viii)  Performance  assessment  against  stated  goals,  peers,  and  industry  benchmarks;  

Environmental  

(ix)  Climate  change  disclosures  e.g.  business  or  legal  developments  related  to  climate  change  mitigation  or  adaptation  that  may  have  an  impact  on  the  organisation;  

(x)  Biodiversity  management;  

(xi)  Environmental  management  systems;  

Social  

(xii)  Labour  practices  and  relations;  

(xiii)  Diversity  and  inclusion;  

(xiv)  Programs  and  practices  that  assess  and  manage  the  impacts  of  operations  on  communities;  and  

   

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(xv)  Product  responsibility  policy  and  practices.  

5.3  The  governance  aspect  of  sustainability  reporting  is  well  covered  under  the  Code  of  Corporate  Governance  and  listed  companies  are  required  to  adopt  a  comply-­‐or-­‐explain  approach  towards  corporate  governance  disclosure  in  their  annual  reports.  In  the  context  of  sustainability,  governance  also  addresses  the  systems  and  procedures  that  an  organisation  has  in  order  to  manage  economic,  environmental  and  social  performance.  

5.4  The  list  above  is  not  exhaustive.  Listed  companies  should  refer  to  the  Global  Reporting  Initiative  (GRI)  Sustainability  Reporting  Guidelines  for  more  comprehensive  disclosure  guidance.  

 

South  Africa    

 Socially  Responsible  Investment(SRI)  Index    

 

The   Johannesburg  Stock   Exchange  since   2010   requires  its   500   listed  companies   to  produce   integrated  reports,which  combine   financial  data   with   reporting  on   ESG   issues,   or  explain   why   they  cannot.    

 

http://www.jse.co.za/Investor-­‐Relations/Sustainability/Socially-­‐Responsible-­‐

Core  Indicators  Desirable  Indicators    

Policy    

�  Senior  responsibility  for  one  of  the  following  as  appropriate:    

o  union  negotiations  where  applicable  OR    

o  employee  relations  /  workforce  consultation    

�  Disciplinary  and  grievance  policy  /  procedures  in  place    

�  Disciplinary  and  grievance  policy  /  procedures  communicated  to    

all  employees    

   

Management  /    

Performance    

�  One  of  the  following  two  indicators  as  may  

CRITERIA  THEMES    

The  Criteria  identify  the  issues  that  companies  must  meet  in  order  to  show  that  they  have  integrated  triple  bottom  line  practices  across    

their  activities.  The  indicators  are  structured  along  the  three  broad  categories  of  Environment,  Society  and  Governance  and  related    

sustainability  concerns  (ESG),  and  from  2010,  the  specific  category  of  climate  change  as  an  additional  focused  area  of  measurement.    

BROAD  CATEGORIES:  ESG    

ENVIRONMENT    

A  company  should  

http://www.eiris.org/media/press-­‐release/jse-­‐sri-­‐index-­‐review-­‐highlights-­‐sustainability-­‐improvements-­‐amongst-­‐south-­‐african-­‐companies/  

Anglo American and the JSE SRI Index

Anglo American has taken part in the JSE SRI since it launched and has consistently been listed as a 'top performer' since 2005, with the exception of 2012 when all mining were disqualified from the category due to unrest in the mining sector that year. http://www.angloamerican.com/development/our-­‐performance/responsible-­‐investment/jse.aspx  

   

77  

Investment-­‐Index.aspx      

be  appropriate:    

o  Data  on  percentage  of  global  workforce  covered  by  collective    

agreements,  union  recognition  or  equivalent  consultative    

arrangements  (including  works  councils  or  workplace  forums)    

where  applicable  OR    

o  Procedures  in  place  for  employee  relations  /  workforce    

consultation  in  non-­‐unionised  settings    

�  Quantitative  data  on  business  impact  of  employee  relations  issues    

(e.g.  number  of  strike  days  or  financial  impact  of  industrial  action)    

   

Reporting    

 �  Coverage  of  consultative  arrangements  OR  workforce  consultation    

procedures  as  appropriate    

�  Senior  responsibility    

�  Disciplinary  and  grievance  policy  /  procedures  and  communication    

�  Quantitative  data  and  financial  dimensions    

   

   

EQUAL  OPPORTUNITIES    

   

Core  Indicators  Desirable  Indicators    

Policy    

�  Demonstrated  commitment  to  equal  opportunities  or  diversity  �  Public  statement  specifying  forms  of  

continually  seek  to    

improve  its  environmental  performance  by:    

·∙  working  to  reduce  and  control  its  direct    

negative  environmental  impacts;    

·∙  promoting  awareness  of  its  significant    

direct  and  indirect  impacts;    

·∙  working  to  use  natural  resources  in  a    

sustainable  manner;  and    

·∙  committing  to  risk  reduction,  reporting    

and  auditing.    

   

SOCIETY    

A  company  should  demonstrate  a    

commitment  to  social  sustainability  and    

good  stakeholder  relationships  by:    

·∙  treating  all  stakeholders  with  dignity,    

fairness  and  respect,  recognising  their    

rights  to  life  and  security  and  free    

association,  and  their  rights  to  freedom    

from  discrimination;    

·∙  actively  promoting  the  development  and    

empowerment  of  its  employees  and  the    

community;    

·∙  ensuring  that  core  labour  

   

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discrimination  covered  by    

equal  opportunities  /  diversity  policy    

�  Global  applicability    

Management  /    

Performance    

�  Any  supporting  data  (e.g.  workforce  and  management    

composition  covering  race,  gender  and  disability,  etc.)    

�  Any  documented  targets  for  promoting  equal  opportunities    

�  Existence  of  flexible  working  arrangements  and  family  benefits    

(includes  e.g.  flexible  working  hours;  child  care  facilities  /  subsidy;    

job  sharing;  career  breaks;  paternity  and/or  maternity  leave  period    

and/or  payment  exceeding  statutory  requirement)    

�  Performance  against  targets    

Reporting    

�  Quantitative  data    

�  Any  documented  targets    

�  Public  statement  specifying  forms  of  discrimination  covered    

�  Global  applicability    

�  Flexible  working  arrangements  and  family  benefits    

�  Performance  against  targets    

standards  are    

met  and  good  employee  relations    

maintained;  and    

·∙  working  to  promote  the  health  and    

safety  of  its  employees,    

through  the  use  of  targets,  monitoring    

performance  against  targets  and  reporting    

on  performance.    

Critical  issues  such  as  HIV/AIDS  and    

black  economic  empowerment  (BEE)  are    

measured  separately.    

GOVERNANCE  AND  RELATED    

SUSTAINABILITY  CONCERNS    

A  company  should:    

·∙  uphold  and  support  good  corporate    

governance  practices  as  the  foundation    

for  its  business  policies  and  practices,    

through  strategies  to  achieve  and    

maintain  internationally  recognised    

corporate  governance  standards  and    

implementing  sound  ethical  practices;    

·∙  work  towards  long  term  growth  and    

sustainability  by  assessing  and    

managing  the  risks  to  

   

79  

sustaining  its    

business  while  adapting  to  changing    

demands,  trends  and  macro-­‐economic    

driving  forces;    

·∙  identify  and  manage  the  broader  impact    

of  the  company  within  the  company’s    

sphere  of  influence  or  where  the    

company  operates  from  a  social,    

environmental,  ethical  and  economic    

perspective,  directly  and  indirectly.    http://www.jse.co.za/Libraries/SRI_Criteria_Documents/2013-­‐Background_and_Criteria.sflb.ashx    

SWEDEN   OMXSUSTAINSE  consists  of  the    

40  shares  with  the  highest  GES  Sustainability  ranking  of  the  100  most  traded  shares  on  the  

NASDAQ  OMX  Stockholm  exchange.  

 

  NASDAQ  OMX  Group,  Inc.  (Nasdaq:NDAQ)  today  announced  the  launch  of  a  Nordic  Sustainability  Index,  the  OMX  GES  Sustainability  Index.  It  is  a  benchmark  index  which  comprises  the  50  leading  Nordic  listed  companies  in  terms  of  sustainability.  The  index  criteria  are  based  upon  international  guidelines  for  environmental,  social  and  governance  (ESG)  issues,  and  supports  investor  considerations  to  the  UN  Principles  for  Responsible  Investment  (PRI)  

https://indexes.nasdaqomx.com/Index/Weighting/OMXSUSTAINSEGI  

It  takes  a  great  deal  for  a  company  to  be  considered  for  a  sustainability  fund.  Swedbank  Robur  performs  its  own  unique  and  comprehensive  sustainability  analysis.  The  analysis  looks  at  the  way  a  company  addresses  issues  related  to  the  environment  and  climate,  working  conditions,  human  rights  and  business  ethics.    

http://www.swedbank.com/idc/groups/public/@i/@sc/@all/@gs/@corpaff/@pubaff/documents/publication/cid_870253.pdf  

THAILAND   http://www.set.or.th/th/regulations/cg/files/2013/CSRinnovation.pdf  

 

http://www.set.or.th/dat/news/20130

  The    

Stock  Exchange  of  Thailand  (SET)  has  taken  a  slightly  different  approach  to  raising  CSR  awareness  and  standards.  In  2007,  SET  established  a  Corporate  Social  Responsibility  Institute  (CSRI)  to  

 

 

2010  The  Stock  Exchange  of  Thailand  (SET)  established  the  Corporate  Social  Responsibility  Institute  to  encourage  the  business  sector  to  move  towards  sustainable  growth.  2006  Listed  companies  on  the  SET  are  required  through  form  56-­‐1  to  demonstrate  in  their  annual  registration  statement  how  they  comply  with  the  exchange’s  corporate  governance  principles.  

http://hausercenter.org/iri/about/global-­‐csr-­‐disclosure-­‐

   

80  

1/13004266.pdf   encourage  the  business  sector  to  be  more  involved  with  society  and  the  environment  and  to  promote  concepts  and  practices  relating  to    

CSR.  SET  also  conducts  the  annual  CSR  Awards  to  recognize  listed  companies  that  demonstrate  exceptional  contributions  to  society.    

 

requirements  

TURKEY   http://www.isesi.org/ISESI__ENG/About_ISESI.html  

  ISESI  will  assess  how  businesses  are  addressing  urgent  sustainability  issues  important  for  Turkey  such  as  climate  change,  the  dhttp://www.ftse.com/Indices/FTSE4Good_IBEX_Index/Downloads/FTSE4Good_IBEX_Inclusion_Criteria.pdfepletion  of  natural  resources  and  ecosystems,  diminishing  water  supplies,  health  and  safety,  community  relations,  employee  relations  and  their  resulting  impacts  on  the  Turkey’s  economic  development.  

http://borsaistanbul.com/en/indices/bist-­‐stock-­‐indices/bist-­‐sustainability-­‐index  

 

(unrelated,  but  another  Turkish  corporate  sustainability  index)  

 

SPAIN            

FINLAND   OMXSUSTAINFI  consists  of  the    

40  shares  with  the  highest  GES  Sustainability  ranking  of  the  80  most  traded  shares  on  the    

NASDAQ  OMX    

Helsinki  exchange  with  Finnish  domicile  

 

 

 

2011  The  Finnish  government  adopted  a  resolution  asking  non-­‐listed  state-­‐owned  companies  and  state  majority-­‐owned  companies  to  report  their  sustainability  performance  2006  The  Finnish  accounting  standards  board  publishes  guidelines  for  environmental  disclosure  in  annual  reports  

http://hausercenter.org/iri/about/global-­‐csr-­‐disclosure-­‐requirements  

https://indexes.nasdaqomx.com  

/Index/Weighting/OMXSUSTAINFIGI  

Etteplan  Oyj  was  qualified  to  the  OMX  GES  Sustainability  Finland  index  in    

December  2012.  The  index  is  calculated  by  NASDAQ  OMX  in  collaboration  with    

GES  Investment  Services.  This  is  a  benchmark  index  that  comprises  the  40  best-­‐rated  companies  listed  on  the  NASDAQ  OMX  Helsinki  in  terms  of  sustainability.    

http://etteplan.smartpage.fi/en/annual-­‐report-­‐2012/files/00548_EtteplanEnglanti300_opti.pdf  

 

 

   

81  

JAPAN   http://hausercenter.org/iri/about/global-­‐csr-­‐disclosure-­‐requirements  

  2009  Environmental  ETF  Japan  Green  Chip  35  (1347)  is  launched.  2003  Morningstar  Socially  Responsible  Investment  Index  (MS-­‐SRI)  is  the  first  SRI  index  in  Japan.  

 

http://ftse.jp/elearning/pdf/academy3.pdf  

The  company’s  sustainability  strategy  centers  around  two  main  components,  which  it  terms  “Green  

Life  Innovation”  and  “Green  Business  Innovation”.  These  two  building  blocks  of  its  strategy  aim  to  promote  a  greener  lifestyle  and  to  achieve  the  lowest  possible  environmental  impact  through  mitigation  and  innovation.  In  FY  2011,  Panasonic  launched  the  Green  Transformation  2012  program,  a  three-­‐year  sustainability  management  strategy.    

http://www.sustainability-­‐indices.com/images/Industry_Group_Leader_ConsumerDurablesApparel_tcm1071-­‐372575.pdf  

FRANCE   http://hausercenter.org/iri/wp-­‐content/uploads/2010/05/OnMateriality_Final.pdf  

  In  2002,  French  regulators  issued  guidelines  specifying  that  these  reports  include  data  on  employees  and  employment  practices  including  layoffs,  absenteeism,  compensation,  equal  opportunity  employment,  union  relations,  health  and  safety,  training,  employment  of  the  handicapped;  and  on  environmental  issues  including  water  and  energy  consumption  and  efficiency,  air  and  water  emissions,  hazardous  wastes,  biodiversity,  legal  compliance,  and  environmental  expenditures.  

 

   

DENMARK   OMX  GES  Sustainability  Nordic  consists  of  the  50  shares  with  the  highest  GES  Sustainability  ranking  of  the  200  most  traded  shares  on  the  NASDAQ  OMX  Helsinki,  Stockholm,  Copenhagen  and  Oslo  Børs  

  In  2008  Denmark  amended  its  Financial  Statements  Act  to  require  its  largest  1,100  businesses  to  include  details  in  their  annual  report  on:  1)  corporate  social  responsibility  policies,  2)  how  these  policies  are  translated  into  actions,  and  3)  what  the  business  has  achieved  as  a  result  of  its  CSR  initiatives  and  

  2009  Companies  are  required  to  disclose  their  CSR  activities  and  use  of  environmental  resources.  1996  Companies  with  “significant  environmental  impacts”  are  obligated  to  publish  green  reports.  

http://hausercenter.org/iri/about/global-­‐csr-­‐disclosure-­‐requirements  

   

82  

exchanges.  

 

future  expectations.  

http://hausercenter.org/iri/wp-­‐content/uploads/2010/05/OnMateriality_Final.pdf  

SWITZERLAND   http://hausercenter.org/iri/about/global-­‐csr-­‐disclosure-­‐requirements  

  2012  BBGI-­‐EthicalQuote  Swiss  Equities  create  first  objective  benchmark  of  the  socially  responsible  investing  sector  in  Switzerland.  

   

GREECE   http://hausercenter.org/iri/about/global-­‐csr-­‐disclosure-­‐requirements  

  2006  EU  Modernization  Directive  2003/51/EC,  requiring  material  ESG  factors  to  be  included  in  annual  corporate  reporting,  is  transposed  into  national  legislation.  

http://hausercenter.org/iri/about/global-­‐csr-­‐disclosure-­‐requirements  

 

 

NETHERLANDS   http://hausercenter.org/iri/about/global-­‐csr-­‐disclosure-­‐requirements  

  2010  The  government  states  its  intention  to  have  100%  sustainable  procurement.  1999  Listed  companies  are  required  to  publish  annual  environmental  reports.  1993  The  Environmental  Protection  Act  includes  a  section  on  environmental  reporting  for  the  ‘largest  polluters.  

 

  By  devising  the  Eco-­‐premium  solutions  concept,  an  assessment  tool  for  Akzo  Nobel  products,  the  

company's  R&D  experts  are  able  to  scan  the  product  portfolio  according  to  health,  safety  and  environmental  criteria  to  identify  eco-­‐efficient  products.  

Eco-­‐premium  labeled  products  accounted  for  22%  of  the  company's  revenues  for  2012.  The  company  also  actively  works  to  reduce  its  environmental.  

http://www.sustainability-­‐indices.com/images/Industry_Group_Leader_Materials_tcm1071-­‐372593.pdf  

USA   http://www.sustainability-­‐indices.com/images/djsi-­‐world-­‐guidebook_tcm1071-­‐337244.pdf  

  013  In  May,  S&P  Dow  Jones  Indices  and  RobecoSAM  launched  a  new  range  of  diversified  sustainable  indices  from.  The  eight  new  indexes  are  targeted  at  investors  who  measure  performance  against  standard  benchmarks  but  wish  to  add  sustainable  companies  to  their  portfolio.    2013  NYSE  Governance  Services  launches  suite  of  

   

   

83  

 

Table I.

integrated  resources  for  private  and  public  companies  looking  to  advance  their  corporate  governance,  risk,  ethics,  and  compliance  practices.  2013  Thomson  Reuters  announced  the  launch  of  Thomson  Reuter  Corporate  Responsibility  indices,  developed  in  conjunction  with  S-­‐Network  Global  Indexes.  These  indexes  rate  companies’  CSR  investing  through  an  assessment  of  their  ESG  practices.  

http://hausercenter.org/iri/about/global-­‐csr-­‐disclosure-­‐requirements