Responsible Business: The Largest German Corporations Fall Short of Human Rights Expectations
Of the 20 top-selling German companies, not one meets all the basic expectations concerning human rights, a study by the CCR and BHRRC shows. Siemens takes first place with 60 percent of all possible points; Deutsche Bank is in last place.
Applied Methodology According to Corporate Human Rights Benchmark
The study used the 12 core indicators of the CHRB to rate companies. These indicators can be used for all industries and reflect the requirements of the UNGPs. They include three areas: (1) governance and policy commitments, (2) embedding respect and human rights due diligence, and (3) remedies and grievance mechanisms. For each of the 12 core indicators, the companies were awarded points from zero to two. They received one point for fulfilling the basic requirements, and two points for exceeding them.
VW, DHL, etc. Unable to Provide Proof of Consistent Due Diligence
Eight of the 20 companies scored less than 40 percent of the maximum 24 points achievable. The companies with the lowest overall score (between 20 and 30 percent) have well-known names such as Deutsche Post DHL, Deutsche Bahn, or Deutsche Bank. Volkswagen achieved 42 percent, which corresponds to the average score. With 60 percent, Siemens was the best-rated company (14.5 of 24 points).
According to Herbert Winistörfer, Head of the CCR and main author of the study, 90 percent of the companies were unable to show that they fully respect human rights risks according to the UN Guidelines. Only two companies, Daimler and Siemens, achieved points for each of the four core requirements of human rights due diligence. "Due diligence was the lowest-rated area because most companies could not provide any evidence that they meet the UNGP requirements for evaluating severe human rights risks," Winistörfer stated.
The study also shows that in their human rights policies many companies do not explicitly address the rights of employees as part of their, usually highly complex, supply chains, their commitment vis-à-vis interest groups such as local communities, and their access to legal remedies. Nor do they provide evidence that their complaint mechanisms are effective. For example, only ten companies ensure at least in part that the workforce employed by their suppliers are able to voice issues and complaints.
"Rather than identifying the potential damage for those affected, risk assessment focuses on the potential damage for the company, such as loss of reputation."
Herbert Winistörfer
Respecting Human Rights Under the Law
The German government has set itself an ambitious goal for 2020: At least 50 percent of German companies with more than 500 employees should have effective human rights protection in place. If voluntary implementation does not succeed, companies will be legally obliged to implement a human rights due diligence system – according to the German government’s current coalition agreement – and Germany will push for EU-wide regulation. Most of the companies affected may find it difficult to meet the basic requirements for entrepreneurial conduct, as the results of the CCR study suggest.
"It is difficult to guess the direction that possible regulation in Germany will take. Possible issues include a duty of greater transparency, mandatory guidelines for a human rights due diligence audit with official monitoring, and extended corporate liability analogous to the Swiss Responsible Business initiative."
Herbert Winistörfer
Contact
Herbert Winistörfer, Head of Center for Corporate Responsibility, author and co-editor of the studye, ZHAW School of Management and Law, phone: +41 (0)58 934 76 75, e-mail: herbert.winistoerfer@zhaw.ch