More than 90 percent of the world’s 2,000 most influential or mega companies, including Amazon, BMW, Nestle, Rio Tinto, Pfizer, Shein, and Standard Chartered, are failing to meet societal expectations regarding human rights, working conditions, and corporate ethics, according to a groundbreaking assessment.
Despite generating revenues equivalent to 45 percent of the global economy, these top companies are missing opportunities to positively impact the lives of hundreds of millions of people, the nonprofit World Benchmarking Alliance (WBA) revealed in a report released on Tuesday.
“The companies have resources and influence equivalent to some of the biggest countries, impacting more people than the populations of many nations. The fact that 90 percent of these companies are failing to act on fundamental social expectations shows the state of play of the private sector,” said Namit Agarwal, social transformation lead at the WBA, which tracks companies’ commitment to the UN Sustainable Development Goals.
“Demonstrating leadership in creating an equal, inclusive, and just world could significantly aid governments in eradicating poverty, reducing inequality, and ensuring access to decent work for all. Regulation, guidance, and external pressure are necessary to steer businesses in the right direction,” Agarwal added.
The WBA’s Social Benchmark assessed companies’ commitments to “act ethically, provide and promote decent work, and respect human rights.”
Key findings from the report include:
- At least 30 percent of companies scored between 0 and 2 out of a possible 20 points, indicating a significant “mismatch between what companies disclose on decent work and society’s expectations,” according to the WBA.
- More than 60 percent of companies disclose some information about wages, and at least 45 percent report some information about working hours. However, only 29 percent monitor the health and safety of supplier workplaces.
- Only 20 percent conduct human rights due diligence on their supply chain partners, and just 4 percent are committed to a living wage.
- In terms of corporate responsibility, only 10 percent of companies disclose their tax payments, and 9 percent outline how they engage with stakeholders like employees and trade unions.
- Only 5 percent of surveyed companies disclosed their spending on corporate lobbying.
“The lobbying efforts of the world’s 2,000 most influential companies, representing $45 trillion in revenue, can either drive or hinder sustainable development. Currently, however, there is no way to know which direction companies are pushing. Most companies are not transparent about their political engagement strategies or spending,” the nonprofit said.
Of the 14 sectors surveyed, apparel and footwear, ICT, and retail ranked the highest for meeting societal expectations, with scores between 28 percent and 33 percent, compared to the average score of 23 percent. The funds and financial services sector scored the lowest, with 11 percent, followed by the transportation industry at 14 percent, and real estate at 16 percent.
By region, companies headquartered in the Asia Pacific scored the highest, with an average score of 35 percent, largely due to Australia’s commitment to disclosing tax payments. This was followed by Europe at 33 percent and North America at 24 percent. The Middle East scored the lowest at 11 percent, behind South Asia and East Asia with 14 percent each.
The WBA emphasized that the private sector needs to take greater responsibility for the economic and social conditions they help create if the world is to meet the UN Sustainable Development Goals, including halving poverty by 2030.
