Benchmarking corporate Just Transition policies gives auto manufacturers like Tesla a low score

The World Benchmarking Alliance (WBA) announced in February that will combine its existing Corporate Human Rights Benchmarking  with its Climate and Energy Benchmarking of global corporations, to produce a Just Transition Benchmark Assessment .  The WBA has a practical objective:

“Trade unions and civil society organisations can use the transparency provided by these assessments to hold companies accountable, and governments can use them as evidence to inform policy making for a just transition. Additionally, investors and the companies themselves will be able to use the assessments as a roadmap to move towards practices to ensure no one is left behind in the decarbonisation and energy transformation.”

Assessing a just transition: measuring the decarbonisation and energy transformation that leaves no one behind  outlines the methodology of this new assessment exercise and invites stakeholders to contribute in an ongoing process till 2023. The proposed outcome is to publish Just Transition Benchmark assessments of approximately 450 companies in high-emitting sectors – in publicly available rankings,  as are the many other reports of the World Benchmarking Alliance. Assessing a just transition also includes results from a pilot project of the automotive sector to illustrate how the Just Transition assessments will be done. It synthesizes the findings from the WBA Automotive Benchmarking for 2020  with its Corporate Human Rights Benchmarking .

Global auto manufacturers are racing to produce electric vehicles, but are they respecting workers’ rights?

In combining the findings of the two existing benchmarking initiatives, Assessing a just transition states: “…. Some companies that demonstrated action on climate issues, such as low-carbon transition plans, emissions reduction targets and climate change oversight, disclosed very little, if any, information on how they manage human rights, and vice versa. This lack of correlation suggests that many automotive manufacturers still consider climate and human rights issues separately, to be addressed independently of each other, despite the fact that they are increasingly recognised as interconnected.”

A brief case study highlight of Tesla states:  “….. when observing the company’s approach to managing human rights, Tesla scores in the bottom third of companies assessed in the CHRB with an overall score of 6.3/100. This approach has come under recent scrutiny, with a 2020 shareholder resolution demanding Tesla improve its disclosures on human rights governance, due diligence and remedy. While the resolution did not pass (24.8% voted in favour), it highlights that even when a company contributes to decarbonisation, a lack of essential human rights policies and processes to prevent abuse of communities and workers cannot be overlooked.”

Related reports:

The WBA  Corporate Human Rights Benchmarking Report for 2020 Key Findings  includes five sectors: Agricultural products, Apparel, Extractives & ICT manufacturing – and for the first time ever, 30 companies in the Automotive manufacturing sector.   The report states: “The average score for automotive companies is 12%, the lowest score ever for a CHRB-benchmarked sector. Two thirds of the companies scored 0 across all human rights due diligence indicators. These poor results suggest implementation of the UNGPs is weak across the sector.”

Twenty-five “keystone” companies in the automotive industry have been benchmarked for their progress towards Paris goals since 2019. Results of the 2020 report are here , and a blog in December 2020 summarizes the results in  “A tale of two automotive companies: sluggish incumbents and opaque disruptors in the race to zero-emissions vehicles”.

 

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