Ranking for human rights? The formative power of indicators for business responsibility

Abstract

This article explores the increasing role of indicators and rankings in the case of business and human rights. It argues that indicators contribute to forming notions of companies’ responsibilities for human rights. The potentially formative power of indicators stems from their substantive content (human rights), from the authority of those who produce them (experts, governance bodies), and from the type of knowledge they convey (numbers offering a sense of precision and comparability). A case study of the Corporate Human Rights Benchmark shows that this indicator scheme shapes notions of business human rights responsibility as being equally centered on commitments, policies, and procedures as on human rights impact. In contrast to the rights-holding and duty-bearing subjects of international human rights law, indicators in the domain of business and human rights put a broad range of stakeholders on equal terms. Contestation has primarily concerned specific instances of highly ranked companies whose operations have negatively impacted human rights. The case shows that rankings can be contentious and are ultimately dependent on their credibility in broader perspective, subject to events that are not necessarily covered by indicators.

Introduction

Indicators, benchmarks, and rankings have become important governance tools, affecting where, how, by whom, and in relation to whom governance takes place as well as its substantive content. This trend can be observed in most issue domains and at all levels of governance, ranging from local to global and inviting questions on what kind of authority relations are privileged as a result. The study of indicators in global governance is by now an established topic in the field of international relations (e.g., Davis et al., 2012; Kelley & Simmons, 2019; Lie, 2020). Prior research in this field has mainly concerned rankings of states in different issue domains, among others, with regard to human rights (e.g., Huang et al., 2018; Merry, 2016; Rosga & Satterthwaite, 2012).

Beyond the initial state-centric focus, a growing social science literature has more recently examined the proliferation of indicators and benchmarks in the realm of business and human rights (e.g., Felice, 2015; Götzmann, 2019; Harrison & Sekalala, 2015; Shamir & Weiss, 2012; Veiberg et al., 2019). These regulatory instruments are created because companies impact human rights in numerous ways, ranging from direct impact on individuals to impact on how notions of human rights responsibilities develop (Birchall, 2021). Many studies on business and human rights have debated the character of companies’ human rights responsibilities, in particular as part of a recent wave of research concerning the UN Guiding Principles on Business and Human Rights (e.g., Mende, 2021; Muchlinski, 2021; Wettstein, 2015). One study observed that aspirations on what human rights benchmarks can achieve are higher in the case of companies as compared to states due to the absence of binding human rights commitments for companies. As a result, benchmarking that builds on self-reporting by companies to a greater extent than by states risks leading to superficial legitimation of human rights performance (Harrison & Sekalala, 2015). There are, however, still few theory-informed case studies on human rights indicators developed by nonstate ranking organizations for assessing individual companies.

Engaging with theoretical debates on governance by numbers and the power of indicators, this article delves into the increasing role of indicators and rankings in the realm of business and human rights. How do indicators contribute to forming notions of companies’ responsibilities for human rights? By addressing this question, the article furthers knowledge on human rights indicators and rankings beyond the domain of states and intergovernmental organizations. The article contributes a case study of the Corporate Human Rights Benchmark (CHRB), which is a nonstate organization that ranks human rights practices of companies on the basis of a recently created indicator scheme.

The purpose of the case study is to examine how business human rights responsibility is constructed in a concrete governance scheme. This case was chosen because it involves a nonstate-based indicator scheme that ranks another kind of nonstate actors: companies. It thereby serves well to empirically illustrate theoretical suggestions on human rights indicator governance outside of the state-based domain. At the same time, the case concerns a limited set of quantitative indicators and does not do justice to the rich diversity of indicator schemes in the domain of business and human rights, such as the Ranking Digital Rights Corporate Accountability Index, the BankTrack Human Rights Benchmark, and the Responsible Mining Index, to mention a few. Therefore, the aim is not to provide more general empirical conclusions on business and human rights indicators.

The focus of the case study is on the CHRB indicator scheme as such, rather than on its actual impact on company behavior. The empirical material therefore consists primarily of publicly available material from the CHRB, including its detailed descriptions of indicators, rankings, reports of key findings, documentation of stakeholder consultations, statements, and scoresheets of individual companies.

In the case study, this material is examined through a qualitative theory-guided approach in which the main theoretical themes structure my organization and interpretation of findings. The documents detailing CHRB indicators and rankings provide the basis of the examination of how the CHRB constructs human rights responsibilities and legitimation claims. The material also includes critical voices appearing through news media reporting and civil society statements. In the CHRB case, searching publicly available sources shows that public critique has mainly been related to high-profile instances of human rights violations associated with individual companies that have been ranked by CHRB. The article’s reliance on publicly available empirical material is in line with its focus on the public sphere, although this limitation implies there may indeed exist other arenas of critique that are not included in the present case study.

The article proceeds by outlining its theoretical starting points in the next section. In brief, these suggest that the formative power of human rights indicators builds on a connection to public interest legitimation and on the appeal of numbers that simplify complex norms and responsibilities. Numerical representation enables comparisons and rankings, and contestation makes visible that the creation and use of indicators is not limited to a technical exercise.

On this basis, the ensuing case study contains four theoretically defined sections that examine in turn how CHRB indicators are legitimated, constructed, used in rankings, and contested. The case study shows that the indicator scheme shapes notions of business human rights responsibility as being equally centered on commitments, policies, and procedures as on performance and human rights impact on the ground. Comparability appears as the driver of indicator rankings, offering a sense of precision but also being subject to critique in cases of companies associated with human rights violations. Finally, the conclusion summarizes the arguments and identifies avenues for further research.

Theoretical premises: The power of human rights indicators

Governance practices of measurement and ranking have formative effects for how notions of business responsibility for human rights develop. The authority to govern as conceptualized here consists of three components: power, legitimacy, and a connection to public interests (Mende, 2022).

Public interests are ends that affect a great variety of people and interests, as opposed to ends that provide a rule or good for the private benefit of members of a target group (Bernstein, 2014). In effect, public authority is not necessarily exercised by state actors, but dependent on the element of publicness, which is not predefined by looking at the actor at hand (Zürn, 2018: 4). This means that any kind of actor can exercise governance functions, including nonstate actors in global governance. Nonstate actors can exercise authority for public purposes, advancing public interests through regulation and monitoring. This is the case even if their authority is not derived from democratic elections or funded exclusively by public sources.

There also needs to be some kind of public recognition of the authority to pursue that public end and practices of “publicness,” possibly yielding political legitimacy. Nonstate governance bodies may therefore purposefully tap into broader norms and practices that underpin public authority, such as deliberation and participation (Bernstein, 2014). In the present case, they also draw on the power of numbers when seeking authority in the absence of electoral mandates or economic clout.

This article zooms in on a specific public interest—human rights protection—allowing for a variety of forms and types of authority with varying degrees of institutionalization and competences, as outlined in the introductory article to the present journal symposium on Governance Authority in Business and Human Rights. (Mende & Hoff, 2022). Nonstate rule-making organizations in this domain seek to gain legitimacy through the substance of human rights, providing a connection to public interest embraced in international human rights treaties and domestic laws (although far from implemented). Such alignment underpins benchmarks for human rights impact assessment (Götzmann, 2019).

Clearly, private regulatory organizations often operate in policy domains with public policymaking processes and varying degrees of state-based global governance. Questions concerning the relationship between state-based international policymaking and private rule-making with regard to legitimacy, authority, complementarity, and effectiveness are highly relevant in the domain of human rights protection (Bernstein, 2014: 121). Under international human rights law, a right implies, at a minimum, that there are duty-bearers (primarily states) and rights-holders (primarily individuals) who are able to seek remedies if rights are violated (Deva, 2020; Götzmann, 2017). In contrast, nonstate governance is usually based on stakeholder approaches, in which different interests are represented through consultations and accountability channels are vague. This is exemplified in nonstate-based regulatory schemes that seek to steer market actors (companies), on the assumption that market-based incentives will promote compliance on the basis of reputational concerns. In the long run, authority is weakened if it lacks legitimacy in the eyes of key constituencies. Given that private schemes lack a basis in the publicly recognized authority of states, their authority is highly dependent on their perceived legitimacy (Bexell & Bäckstrand, 2022).

For the study of rankings and indicators in global governance, power is best understood as productive, operating indirectly through rules, laws, and empowerment of actors who partake in institutional schemes (Bernstein, 2014: 125; Birchall, 2021; Broome & Quirk, 2015). Rankings do not hold coercive or judicial power but still exercise influence on actors being assessed and on broader market dynamics. The productive power to govern in this way gains strength from and is legitimated by its connection to public interests through the normative power of human rights. Whether state-based or nonstate-based, global governance institutions must refer to public interests in order to legitimate their power, seeking to claim authority (Mende, 2022). The users of rankings and benchmarks are often third parties who are not formally part of the benchmarking process but who consider indicator scores in their decision making. Such usage expands the importance of benchmarks as it multiplies reputational costs and benefits stemming from rankings, increasing the competitive pressure associated with a particular indicator scheme (Broome & Quirk, 2015).

The power of indicators relies on the legitimacy brought by their substantive content, on the authority of those who produce them, and on the type of reductionist knowledge that indicators convey, reducing complex matters to numerical representation (Lie, 2020). Indicators bring a truth claim by offering concrete, numerical information that allows for easy comparison and ranking. This facilitates decision making in the absence of other information (Merry, 2016: 1). Ambiguity is reduced as raw information is edited, making numbers appear more certain and authoritative as they move up a chain of decision making (Davis et al., 2012). The presentation of numbers hides the messiness of their generation and the level of human judgment involved in doing the assessments (Rosga & Satterthwaite, 2012).

Research on indicators points to possible benefits obtained through their use, such as standardization, aggregation, and comparability (Felice, 2015), as well as weaknesses stemming from a simplification of complex data that may give rise to misleading information on company effects on human rights. It also raises questions about whose voice is heard through indicators, as mirrored in tensions between a rights-holder focus and a stakeholder focus, mentioned earlier. In essence, the creation of indicators triggers clarification of norms, moving from general principles to concrete operationalization. Contested normative values are translated into simple numerical representations. Deciding on categories and indicators and how to measure them thereby constitutes a source of power (Broome & Quirk, 2015; Lie, 2020: 932).

Indicators are performative in the sense that they are constitutive of notions of responsibility and embedded in processes of comparability. Indicators influence the allocation of resources and views on good and bad and have become tools of advocacy (Merry, 2018). They require the production of information on company practices, that may otherwise not have become available (Felice, 2015).

Rankings build on reputational dynamics and influence decisions through the pressure of comparison, leveraging comparative information among peers and those making decisions. Comparisons establish or reinforce identities of the ranked actor. They make very different entities comparable through the use of averaging and make the ranked actor worry about the next iteration of the ranking (Kelley & Simmons, 2019). They build on competitive dynamics and social pressure through the power of assessment and offer a sense of precision, seeking to change behavior.

The power of performance indicators is a function of such indicators’ ability to engage reputational concerns as well as the credibility and authority of the creators of indicators. The status conferred by indicators cannot be credibly claimed by the ranked party itself (Kelley & Simmons, 2019). In brief, indicators enact a reality (Shamir & Weiss, 2012). Contestation often revolves around the use of data that underpins indicators and the weighting of different criteria within an indicator or ranking (Davis et al., 2012). Indeed, authority in global governance is constructed in a continuous interplay between contestation and legitimation (Mende, 2021; Bexell et al., 2022). Political struggles over what business human rights responsibilities means may, however, become subordinated to technical debates over measurement and data availability. This gears power toward experts rather than politics (Merry, 2018).

In brief, these theoretical suggestions concern how indicators are legitimated, constructed, used in rankings, and contested. These four themes will structure the next section’s case study. The formative power of indicators stems from their substantive content (human rights), from the authority of those who produce them (experts, governance bodies), and from the type of knowledge that indicators convey (numbers offering a sense of precision and comparability).

The case of the Corporate Human Rights Benchmark

Background

This section turns to a case study on the CHRB, one component of the increasingly multilayered global business and human rights regime. After a brief background to the CHRB, the case study is structured according to the four theoretically derived themes, focusing in turn on how CHRB indicators are legitimated, constructed, used in rankings, and contested.

The CHRB is a nonprofit organization that issues indicators and rankings of individual companies’ human rights approaches. It was established in 2013 and published its first ranking in 2017. Since 2019, it is part of the World Benchmarking Alliance that also comprises the Gender Benchmark, the Seafood Stewardship Index, the Access to Seeds Index, and the Just Transition Assessment (assessing social elements of companies’ transition to low-carbon practices), with additional indices under construction.

The continued expansion of indices under the World Benchmarking Alliance umbrella testifies to the rapidly increasing role of indicator assessments of companies’ impact in a broad range of domains. On the basis of the highly influential UN Guiding Principles on Business and Human Rights, the CHRB issues an annual benchmark of the human rights approaches of 230 global companies in industry sectors with a high risk of negative human rights impact. These are the sectors of agricultural products, apparel, extractives, ICT manufacturing, and automotive manufacturing.

The CHRB seeks to draw on market dynamics to drive change toward preventing adverse human rights impact of large companies. It is funded through contributions from diverse actors such as large pension funds, global asset managers/investor bodies, international nonprofit organizations such as the Business and Human Rights Resource Center, think tanks such as the Institute for Human Rights and Business, and the governments of the United Kingdom, the Netherlands, and Switzerland.

Legitimation of business human rights responsibility

This section demonstrates that legitimation claims with public interest references are frequent in the material that stems from the CHRB. These claims are based on alignment of established international human rights agreements with win–win statements that portray market dynamics as a driver of change for human rights responsibility by companies.

In the case of the CHRB, there are frequent references to the main international human rights treaties and more recent agreements specifically on business and human rights—above all, the UN Guiding Principles on Business and Human Rights. These were endorsed by the UN Human Rights Council in 2011 and are often invoked as the main authoritative standard on business and human rights. Material from CHRB often refers to these principles and to additional industry-specific standards on human rights (e.g., CHRB, 2017, 2019, 2020). It thereby taps into broader sources of legitimation, invoking a public rather than a private interest, extending to even broader norms when stating that “business respect for human rights is simply about human dignity” (CHRB, 2021a: 5).

CHRB asserts that companies have responsibilities to respect the human rights of those involved in or impacted by company operations. Increasingly, material produced by CHRB also refers to the UN Sustainable Development Goals and a need to “place people and planet above the pursuit of profit at all cost” (CHRB, 2020: 3). This aligns with a global sustainable development discourse centered around the UN 2030 Agenda for Sustainable Development that has developed in parallel with debates on business and human rights.

Beyond substantive legitimation sources, we also find that the CHRB taps into practices that usually underpin public authority, such as deliberation and participation, through its stakeholder consultations at different stages. The original content of CHRB themes and indicators was developed in 2015–2016 through a round of consultations on a draft set of indicators with representatives from companies, civil society, investors, governments, academics, and legal experts.

The CHRB itself outlines a broad approach to relevant actors, employing a stakeholder-oriented discourse. For example, it states that CHRB seeks to achieve direct impact on companies; to increase the use of the CHR benchmark by the investor community, governments, international organizations, the media, civil society, academia, and consumers; and to increase the recognition of CHRB as the reference methodology and benchmark of corporate human rights performance, through broader movement building and alignment in the business and human rights domain. In addition, this is stated to be connected with World Benchmarking Alliance objectives of incorporating the perspective of Global South stakeholders (World Benchmarking Alliance, 2021: 8). This broad stakeholder approach provides a contrast to how the notion of rights is understood in international human rights law. As noted, recognizing something to be a right implies that there are duty-bearers and rights-holders who are able to seek remedies if rights are violated.

Additional legitimation claims along ideas of public interest are visible in CHRB arguments for relying only on publicly available data for its scoring of companies. This implies that companies that share more information may score higher than those that behave in a similar way but share less information. A CHRB framework paper for the 2015–2016 consultations stated, “The Corporate Human Rights Benchmark will build on a competitive approach to incentivize better human rights performance by companies through developing a transparent, publicly available and credible ranking of corporate human rights related policies, processes and practices.” (CHRB, 2015: 3). From the perspective of individual companies, this approach is not necessarily embraced. A representative of apparel company Next believed the method of CHRB was flawed as it did not account fully for what companies are actually doing to improve human rights throughout the supply chain (Reuters, 2017).

For its part, CHRB considers the fact that many companies do not account for the social costs of their operations to be a “market failure,” giving rise to a need for disclosure of information that the market can respond to (CHRB, 2021a: 6). The basis for this is the belief that “the competitive nature of the market is a powerful driver for change,” making it a key objective to introduce a “positive competitive environment encouraging companies to race to the top of the annual ranking” (CHRB, 2015: 4). Moreover, alluding to public interests, CHRB emphasizes that its rankings are freely available for anyone interested in them.

In brief, legitimation claims with public interest references are easily observable in material from CHRB, seeking authority for its indicator scheme. Furthermore, this material frames market-driven dynamics as supportive of business’s human rights responsibility. Legitimacy is sought through alignment between international human rights agreements and a win–win discourse on market dynamics as a driver of change.

Moreover, CHRB self-legitimation contains an open-ended approach regarding who is to benefit from and approve of CHRB benchmarks. It puts a broad range of stakeholders on equal terms rather than privileging the rights-holding and duty-bearing subjects of state-centered international human rights law. In comparison, it is less clear who are considered key subjects of indicator governance—that is, in whose eyes legitimacy is sought (Bexell et al., 2021). Having demonstrated how indicator governance is legitimated by its creators, I next look into how indicators form substantive notions of business human rights responsibility.

The formative power of indicators

How do indicators contribute to the construction of what business human rights responsibility looks like? This section posits that CHRB indicators shape notions of business human rights responsibility in which commitments, policies, and procedures are given equal importance as actual outcomes for human rights. The case also demonstrates how the creation of indicators triggers clarification of norms, moving from general principles to concrete operationalization and numerical representations. Still, expert knowledge is needed to fully understand ranking constructions and the data sources behind them.

The original CHRB content was based on indicators within six “measurement themes” that hold different weight in the overall score of companies. These themes were (A) governance and policy commitments, (B) embedding respect and human rights due diligence, (C) remedies and grievance mechanisms, (D) performance, company human rights practices, (E) performance, responses to serious allegations, and (F) transparency (CHRB, 2017).

Each theme has a number of indicators. Companies are given either 0, 1, or 2 points on an indicator, depending on the extent to which the indicator is fulfilled in light of publicly available information. The number of points is then divided by the maximum number of points available per theme. The ensuing scores on all measurement themes are then weighted to produce the total CHRB score of a company. The annual CHRB Key Findings Report visualizes results according to the measurement themes across industries and for individual industries. Individual score cards for all companies are also available for download and Excel spreadsheets with more detailed reports per company.

The balance between themes assessing company human rights commitments/procedures and themes assessing companies’ human rights performance has been the subject of debate since the start. Already in the original consultation round of 2015, the Institute for Multi-Stakeholder Initiative Integrity stated that proposed indicators concerning companies’ participation in multistakeholder initiatives risked undermining the objective of measuring companies’ human rights performance. The reason was that indicators on such participation were not sufficiently connected to human rights performance (Institute for Multi-Stakeholder Initiative Integrity, 2015).

The tension between assessing whether companies have procedures around human rights in place and companies’ actual human rights performance has increasingly been acknowledged. The 2020 CHRB Key Findings Report stated that a main challenge is the disconnect between commitments and processes, on one hand, and actual performance and results, on the other. The report also points to a need to strengthen the voices of affected and potentially affected stakeholders (CHRB, 2020: 37). During 2021, this tension resulted in a revision of CHRB methodology in light of its experiences during the first four years. CHRB collected input for the purpose of revising its benchmark through roundtable consultations and other dialogues with stakeholders and an online questionnaire. Some 160 individuals and organizations from 43 countries participated, representing a spectrum of interests according to the organization itself (CHRB, 2021b: 3).

The review was not intended to change the CHRB methodology fundamentally, but to improve it on the basis of stakeholder consultations. Several changes were decided on in 2021. One was to move to a two-year assessment cycle (instead of one year), giving more time to companies to implement changes and increase disclosure. Another main change was to adjust the weighting of Theme D (performance) in order to increase the focus on performance and to strengthen some of the indicators that focus on specific industries’ human rights practices. In order to better integrate stakeholder engagement, it was decided to remove Indicator A.1.4. Commitment to engage with stakeholders and instead integrate this throughout all themes (CHRB, 2021b: 9).

Other changes were the addition of two new indicators on the prohibition of forced labor and the inclusion of gender pay gaps in women’s rights indicator requirements. Furthermore, Theme F (transparency) was removed. It was considered to be implicitly present throughout the assessment through the choice to use only publicly available information. This implied greater overall weighting of themes on performance and impact of benchmarked companies (CHRB, 2021b: 12). The CHRB also decided not to follow requests to broaden the scope of the CHRB to include the full value chain. In other words, it decided to continue covering only “upstream” human rights impact during production stage, not “downstream” impact relating to the distribution and end use of products (CHRB, 2021b: 13).

Revised methodologies for each sector were published by the CHRB in the fall of 2021 (CHRB, 2021b). In these new versions, there are as a result five key “measurement themes”:

1. Governance and policy commitments (10% overall weight),

2. Embedding respect and human rights due diligence (25%),

3. Remedies and grievance mechanisms (20%),

4. Performance: Company human rights practices (25%), and

5. Performance: Response to serious allegations (20%).

As a result, the weighting of procedures (i.e., Themes A–C) is 55% as compared to performance (i.e., Themes D–E), which now amounts to 45% of the total score. There are several indicators under each theme. Some are the same for all industry sectors and some vary across sectors. For instance, for the apparel sector, the indicators for Theme D are living wage, aligning purchasing decisions with human rights, mapping and disclosing the supply chain, prohibition of child labor, prohibition of forced labor, freedom of association and collective bargaining, health and safety, women’s rights, and working hours. Most of these are further divided into an assessment of the company’s own production operations and supply chain practices, making the total number of indicators reach 20 (CHRB, 2021c). For the extractive sector, there are nine indicators for Theme D: living wage; transparency and accountability; freedom of association and collective bargaining; health and safety; indigenous people’s rights and free prior and informed consent; land rights: land acquisition; security, water, and sanitation; and women’s rights (CHRB, 2021d).

In conclusion, indicators establish that companies indeed hold responsibilities for human rights. Indicators shape notions of business human rights responsibility as to a large extent being centered on commitments, policies, procedures, and information disclosure. This gives rise to a tension between company “output,” in terms of actual impact on human rights, as different from the “input” side of company responsibility for human rights that concerns company policies and procedures (cf. Harrison & Sekalala, 2015). Prior research has cautioned that a predominance of input-related indicators means that, for instance, investors who base their decisions on rankings may unknowingly be funding practices that impact negatively on human rights on the ground (Maher, 2020).

The detailed CHRB indicator scoring methodology is transparent while complex and with several layers. In addition to material produced by companies themselves, the assessment of companies builds on a large number of external sources (e.g., Social Accountability 8000 International Standard, Global Reporting Initiative), including other indicators and assessment measures (publicly available) that are referenced within assessments of individual indicator elements.

For example, for the apparel industry, indicator D.2.4 “prohibition of child labor: age verification and corrective actions (in own production or manufacturing operations),” the sources listed are the International Convention on the Rights of the Child, Art. 32; International Labor Organization, No. 138 & No. 182; UN Children's Rights and Business Principles; Danish Institute for Human Rights Indicators for Business, 2.3; Fair Labor Association, V. Child Labor.2, V. Child Labor.4 and V. Child Labor.8; Ethical Trading Initiative Base Code, 4.2 and 4.4; Fair Wear Foundation Labor Standards, 3; Social Accountability 8000 International Standard; Global Reporting Initiative 408-1; and Social Accountability 8000 International Standard IV.1.2 (CHRB, 2021c). While weblinks with further information and acronym lists are easily available, this adds another layer of knowledge requirements for consumers, shareholders, or other interested parties who wish to learn about a specific company’s human rights impact.

In brief, indicator governance is, on the surface, easily accessible when presented in terms of a single ranking or percentage. Under the surface, expert knowledge is required to fully grasp ranking constructions and the data sources underpinning them. Political struggles over what business human rights responsibilities entail may, as a result, become submerged to technical debates over measurement and data availability, gearing power toward experts rather than politics. The next section considers CHRB ranking practices through which the formative power of indicators more concretely play out.

Competitive pressure through rankings

Rankings make quite different entities comparable but are subjected to available data and the force of reputational concerns. Assumptions on the power of comparability appear in the CHRB case, in which competitive market dynamics are presented as a main driver of improved business practices in the human rights domain. CHRB argues that “the cyclical nature of benchmarks provides companies with strong incentives to improve and show progress over time,” and that the results can be a source of competitive advantage for highly ranked companies and a wake-up call for lowly ranked ones (CHRB, 2021a: 8). Moreover, the CHRB aims to “create a race to the top through which companies strive to fulfill their responsibility to respect the human rights of the individuals and communities that they impact” (CHRB, 2021b: 2).

The central outcome of CHRB measurements are the rankings. In 2019, the highest ranked companies were Rio Tinto, Unilever, Marks & Spencer Group, BHP, Freeport-McMoRan, and Repsol (CHRB, 2019). Scoresheets for individual companies can be downloaded from CHRB webpages. The scoresheet provides a detailed assessment of the company, with a score on each indicator for the year in question. An explanation of each score is included in the scoresheet.

To illustrate, extractive company Petrobras’s overall score in 2019 was 46.6 out of a maximum of 100. Petrobras’s scoresheet in the CHRB 2019 assessments says with regard to Indicator A.1.1, “commitment to respect human rights,” that the requirement of general human rights commitment is met as well as the requirement of being a signatory to the UN Global Compact and having a reference to the Universal Declaration of Human Rights. Requirements reported not to be met for Indicator A.1.1 are commitments to the International Bill of Rights, the UN General Principles, and the OECD principles (CHRB 2019 Petrobras Scoresheet, 2019). For indicator D.3.1 that concerns “living wage (in own extractive operations, which includes JVs),” all requirements are met. This includes living wage target time frame, description of how living wage is determined, that the company pays living wages, and that it reviews living wages definition with trade unions. In contrast, for indicator D.3.7 “security (in own extractive operations, which includes JVs),” the requirements are not met. These are the following: how the company implements security, gives examples of respecting human rights in security, ensures that business partners follow a security approach, assesses local communities, and works with local communities (CHRB 2019 Petrobras Scoresheet, 2019).

Another example is the overall higher ranked (83.3 out of 100) apparel company Adidas. It also shows a mixed picture on many indicators. One example of an indicator in which all requirements are met by Adidas is Indicator B.1.8, “approach to engagement with potentially affected stakeholders.” For this indicator, the requirements are the existence of stakeholder processes and a frequency and trigger for stakeholder engagement, that workers and communities in the supply chain are engaged, and that the company analyzes and takes action on stakeholder views (CHRB 2019 Adidas Scoresheet, 2019). This brief look into specific indicator assessments signals that there is large room for interpretation in decisions related to indicator fulfillment.

The 2020 CHRB Key Findings Report posits that there has been progress compared to previous years. Still, the report concludes that “only a minority of companies demonstrate the willingness and commitment to take human rights seriously” (CHRB, 2020: 3). Due to the COVID-19 pandemic, only the automotive sector was assessed on the full range of indicators in the 2020 report. This report found that the automotive sector (30 companies in total), being included for the first time in that year, “is the worst performing ever in the CHRB” with an average score of 12% (CHRB, 2020: 7). The highest ranked companies were Ford Motors, Group PSA, and Daimler. Ford Motors received a total score of 41.5 out of 100. Half of the companies received a score of under 10 out of a 100. The worst performing companies were Great Wall Motor Company, SAIC Motor, FAW Car Company, and Chongqing Changan Automobile Company (CHRB, 2020: 13).

As noted, a score of 0 may imply that CHRB was not able to find enough publicly available information on the indicators of the theme (CHRB, 2020: 11). For instance, 18 out of 30 automotive companies scored 0 on all indicators of the theme “board-level accountability for human rights” and nine out of 30 companies scored 0 on all indicators of the theme “remedy and grievance mechanisms” (CHRB, 2020: 11). Overall, the report stated that key weaknesses concerned supply chain management with regard to human rights risks and a disconnect between human rights and climate issues.

Furthermore, for companies from the apparel, agricultural product, extractive, and ICT manufacturing sectors, three main areas were covered in the 2020 CHRB report: high-level commitments, human rights due diligence, and access to remedy. The report found that, for companies in these sectors, there is a need to move from commitments and processes to impact on the ground. One hundred and four out of 229 companies faced at least one allegation of serious negative human rights impact on the ground. Moreover, 85% of these allegations concerned negative human rights impact in low-income countries (CHRB, 2020: 9–10). In the sector of agricultural products, the top ranked companies (out of 57 of the largest such companies in the world) were Unilever, PepsiCo, and Heineken; the bottom ones were Yiii Group, George Weston, and Kwelchow Moutal (CHRB, 2020: 22). With regard to the extractive sector, 57 of the largest companies in the world were assessed. The top three were Eni, Rio Tinto, and BHP, and the bottom ranked ones were Saudi Aramco and Surgutneftegaz (CHRB, 2020: 27).

Notably, the material from CHRB also contains disclaimers that put the ranking exercise in perspective. These disclaimers alert to fundamental difficulties of assessing human rights impact and are therefore worth quoting at length:

WBA [World Benchmarking Alliance] would like to emphasize that the results contained in this benchmark will always be a proxy for good human rights management and not an absolute measure of performance. This is because, while extensive work is being undertaken to understand and value respect for human rights, there are no agreed fundamental units of measurement for human rights. As such, the results provide a subjective assessment at a certain point in time. Therefore, a score of 0 on an individual indicator does not necessarily mean that bad practices are present or that there is no company action on the issue. Rather, it indicates that we have been unable to identify the required information in public documentation. (CHRB, 2020: 43)

Moreover, for the scoresheets of individual companies, a caveat is provided:

Please note also that the “Not met” labels in the Explanation boxes below do not necessarily mean that the company does not meet the requirements as they are described in the bullet point short text. Rather, it means that the analysts could not find information in public sources that met the requirements as described in full in the CHRB (2019) Methodology document. For example, a “Not met” under “General HRs Commitment,” which is the first bullet point for indicator A.1.1, does not necessarily mean that the company does not have a general commitment to human rights. Rather, it means that the CHRB could not identify a public statement of policy in which the company commits to respecting human rights. (CHRB 2019 Adidas Scoresheet, 2019)

In brief, data availability heavily impacts indicator assessment, playing a large role for how scores turn out (Maher, 2020). This means that data availability should not be conceived of as a technical issue but as a matter of choice of sources that has contested implications for what human rights issues come to the fore.

This section has argued that the power of indicators is formative through rankings. Despite acknowledging data challenges, the ranking methodology offers a seductive sense of precision, and rankings are easily available for market actors (consumers, shareholders, investors, and others). Comparability is the central motor of indicator rankings. It shapes identities of ranked companies in terms of “leaders” and “laggards,” offering credibility and reputational gains to highly ranked companies. At the same time, the next section will show that rankings can face critique and credibility losses due to events falling outside the scope of indicators.

Contestation of rankings

The theoretical section suggested that authority in global governance is constructed in an interplay between contestation and legitimation (cf. Mende, 2021). The case study material shows that contestation around CHRB has not primarily concerned the selection of its indicators. Rather, critique has brought into the spotlight specific instances of highly ranked companies whose operations have negatively impacted human rights on a broad scale. This critique ultimately concerned the credibility of the entire ranking scheme, critics argued. Beyond debates on data and weightings, there have thus far been two high-profile instances of critique against CHRB rankings of companies. These have concerned companies’ negative impact on human rights on the ground in more general terms than specific indicators.

The most well-published case concerns the 2019 ranking of the world’s largest iron ore mining company, Rio Tinto. In May 2020, with the approval of the state government, Rio Tinto destroyed two Aboriginal sacred caves in Western Australia as part of a mine expansion. In response, 35 Australian aboriginal and human rights group called for Rio Tinto to be stripped of its ranking, calling on CHRB to ensure that the company’s ranking reflected the reality for people on the ground, including the Puutu Kunti Kurrama and the Pinikura (PKKP people; see Reuters, 2020). In a letter to the executive director of CHRB, these nongovernmental organizations explained, “This ranking is, in our view, misleading to investors and other stakeholders who rely on the CHRB to provide robust and credible information on companies’ human rights record as well as being disrespectful to the communities whose rights have been so profoundly impacted by Rio Tinto’s actions” (NGO coalition to the Executive Director of the World Benchmarking Alliance, 2020).

In response, CHRB used its procedure of appending a statement to a prior ranking result, issuing the “CHRB response to the destruction of a 46,000-year-old Aboriginal heritage site by Rio Tinto at Juukan Gorge in Western Australia on 24 May 2020.” This response stated,

It would be inappropriate for CHRB to continue to assess and rank Rio Tinto in one of the highest-scoring bands and as the top mining company without reference to this incident. The CHRB seeks to provide robust and credible information on companies’ actions to respect human rights across their business, and it would be misleading not to reference this severe impact as a complement to the latest results.

For its part, Rio Tinto issued the following statement:

We are very sorry for the distress we have caused. Our relationship with the PKKP people matters a lot to Rio Tinto. We have had a longstanding relationship with the PKKP people. In relation to the Juukan area, we have been working together since 2003. We understand the importance of stakeholders being informed of our approach to respecting human rights. To this end we continue to provide information on our website around our response, which includes ongoing conversations with the PKKP people as well as a board level review of our heritage management processes within Iron Ore following the events at Juukan Gorge. (Rio Tinto, 2020)

The second high-profile case in which company human rights violations caused the CHRB to issue a public statement concerned Brazilian company Vale, one of the largest mining companies in the world and the world’s largest producer of iron ore, pellets, and nickel. In 2019, a dam owned by Vale collapsed at Vale’s mine in Brumadinho in Brazil, with 270 fatalities and massive disruption and human rights impact on communities. CHRB decided to remove Vale’s scores from the 2018 CHRB ranking and to exclude Vale’s scores from the CHRB dataset, stating,

It would not be correct for CHRB to continue to rank Vale in the higher performance bands in the wake of such a tragedy … it does not appear correct to the CHRB to keep showing Vale on our website and datasets as a relatively high-performer compared to their peers. (CHRB Response to Brumadinho Dam Disaster 2019, 2019)

Vale is not included in the CHRB, 2020 ranking, and the company’s earlier rankings and scores are no longer available among the CHRB public data on its website.

In short, rankings can be contentious and are ultimately dependent on their credibility in broader perspective. The empirical material shows that such credibility is subject to events that are not necessarily covered by indicators. Contestation around CHRB has primarily concerned specific instances of highly ranked companies whose operations have negatively impacted human rights. Responses by CHRB indicate that critique is potentially damaging to its credibility. This mirrors debates described earlier on the balance between indicators covering company procedures and indicators covering company human rights impact. It demonstrates a need for complementary qualitative assessments of human rights impact on the ground.

Conclusions

The business and human rights regime is continuously evolving. It intersects with an influential societal trend of governance by numbers, producing an increasing range of human rights indicator schemes. This article has contended that indicator assessments contribute to forming notions of companies’ responsibilities for human rights as part of ongoing international attempts at delineating such responsibilities.

The indicator scheme examined here shapes notions of business human rights responsibility as being equally centered on commitments, policies, procedures, and information disclosure as on performance and impact. Transparency and publicly available information on human rights are framed as a remedy for a market failure with regard to the regulation of business and human rights. The indicator scheme is legitimated through alignment with established international human rights agreements and a win–win discourse that sees market dynamics as a driver of change to improved human rights practices by companies.

Yet, in contrast to the rights-holding and duty-bearing subjects of international human rights law, indicators that assess companies put a broad range of stakeholders on equal terms. The indicator scheme examined here builds on an open-ended stakeholder approach regarding who is to benefit from and approve of CHRB benchmarks. References to rights-holders in the form of individuals with legal entitlements and duty-bearers with legal obligations are few. If systematic consideration of rights-holders’ views are not part of indicator rankings, there is a risk that the concerns of vocal stakeholders take priority (Götzmann, 2017).

In an era when many companies look for guidance on how to define their human rights responsibilities, indicators and rankings can have strong steering effects. Reports from CHRB shed light on a range of gaps and weaknesses in companies’ human rights approaches across industry sectors where the risk of human rights violations is particularly high. The case study demonstrates how indicators offer a way of making responsibilities more concrete for companies. Indicator schemes may shape company priorities in the direction of what is covered by indicators and influence decisions by market actors through easily accessible comparisons. The case study of the CHRB shows that indicator governance is, on the surface, easily accessible when presented in terms of a single ranking or percentage. Ambiguity is reduced as raw information is edited, making numbers appear more certain and authoritative as they move up a chain of decision making (Davis et al., 2012). The presentation of numbers hides the process of their generation and the level of human judgment involved in doing the assessments. Under the surface, expert knowledge is required to fully grasp ranking constructions and the data sources underpinning it.

Moreover, ranking schemes are ultimately dependent on their credibility in broader perspective, subject to events that are not necessarily covered by indicators but that affect the broader human rights reputation of a company. This suggests a complementary role for qualitative indicators that would be able to capture external events and performance weaknesses not covered by numerical data. In broader perspective, it also shows that, in light of their limitations, indicators for business and human rights should only amount to one of several elements necessary for human rights protection and accountability. Strengthening the national rule of law and human rights institutions as well as international human rights bodies is of paramount importance for systematic human rights protection to become more effective across the world.

The case study provided here yields questions for future studies of the power of indicators in the domain of business and human rights, building on the theoretical assumptions advanced here. First, it remains to empirically explore what kind of accountability relations, if any, are strengthened as a result of company rankings. Is it accountability between the creators of indicator schemes and the companies being ranked? Do rankings feed into accountability relations between the company leadership and shareholders? How about accountability between companies and groups who are impacted by company operations at local levels? Further exploring the role of rights-holders in the continued development of business and human rights indicators is an important area for research and policy development related to human rights accountability.

A second set of questions concerns the steering effects of indicators from the perspective of different actors, which the present article has not sought to capture. What role do human rights indicators play for individual companies’ decision-making processes? How important are human rights rankings for investors as part of the large stream of information on the global economy? What are the main difficulties for the expert deciding which score to put on a particular indicator for an individual company? Is the victim of human rights abuse aware of indicator schemes, and do these schemes cover company impact on his or her human rights? Do states, in fact, use the growing number of indicator schemes in the business and human rights regime as an excuse for not creating hard law?

Finally, the observations made in this article provide ground to further pursue theoretical advances on notions of public and private in the global governance of human rights. The theoretical starting point here was that public authority is not necessarily exercised by state actors, but dependent on elements of publicness that are not predefined by looking at the kind of actor at hand. Allowing notions of public and private to designate governance purposes and outcomes rather than specific actors enables new perspectives on human rights protection. The assertion that human rights constitute a public interest provides leverage to continue research on how rights are best protected in the face of violations spanning societal spheres and geographical spaces.

Additional information

Notes on contributors

Magdalena Bexell

Magdalena Bexell is Associate Professor in the Department of Political Science, Lund University, Sweden. Her research concerns international relations, global governance, legitimacy, human rights, and the politics of sustainable development, with a focus on the United Nations 2030 Agenda and its Sustainable Development Goals.