LONDON – Luxury brands LVMH, Hermès and Prada have been heavily criticised for a lack of transparency on human rights issues in their supply chains after they repeatedly failed to engage with a government and investor-backed group. In contrast, US brand Gap, Swedish brand H&M and adidas were named among companies reviewing and positively evolving their programmes and policies on human rights. The report suggests companies that ignore human rights issues risk restricted access to capital due to repetitional damage and investor backlash.
The Corporate Human Rights Benchmark, launched in 2017, aims to bolster the role of capital markets in improving companies’ performance on human rights by evaluating and ranking the 100 largest apparel, extractive and agri-food businesses on human rights. UK retailer Marks & Spencer is ranked second on the list with a score of 64, and Adidas is fifth with a score of 57, while H&M scored 48. Gap Inc and Nike scored 45 and 40, respectively.
Last year, a group of 85 investors wrote to the chairmen of all 100 companies, asking them to engage with the process. The investors include Aviva Investors, APG Asset Management and Nordea and oversee a combined US$5tr of assets. These are also supported by the UK, Dutch and Swiss governments.
28 companies failed to reply, including the luxury brands cited above, having ignored the exercise throughout the past two years.
Prada and Hermès declined to comment while Macy’s said: “Integrity and good corporate citizenship are deeply ingrained in our business. We respect the work of the Corporate Human Rights Benchmark. While we were not able to participate in the earlier benchmark, we are open to another discussion with CHRB.”