PERFORMANCE METRICS

Former Dean Peter Henry discusses the need for better human rights performance metrics for investors with Kerry Kennedy

Former Dean Peter Henry discusses the need for better human rights performance metrics for investors with Kerry Kennedy

Too often the business practices that most affect people and communities around the world are not effectively measured. We are working to change this - one industry at a time.

Business executives and employees face competing demands everyday. How they will be evaluated and rewarded by their most important stakeholders inevitably influences the choices they make. Providing these stakeholders with high-quality, easy-to-use information about which companies best manage the human rights risks and opportunities inherent to their industry is critical to bringing more attention to these issues. 

Effectively incorporating human rights considerations into decision-making requires first knowing where to look. We believe that human rights leadership is defined by the core practices of a business. We look at what drives profits in a given industry and consider how this aspect of operations most directly affects people and communities around the world. When these practices are measured well, they can reveal ways to not only better manage human rights risk, but also to drive innovation and improve operational efficiencies. But, at present, measurement of these practices is rare.

Increasing investor interest in environmental, social, and governance (ESG) factors is creating new demand for better performance metrics. For now, the social category remains poorly defined. Available data focus on whether a company has dedicated social governance structures and programs (like board committees, human rights policies, or staff trainings), but stop short of measuring whether these programs influence the company's core operations and achieve their intended effect on the ground. A new generation of performance metrics that looks at effective integration of social considerations into core business operations needed. 

We are exploring how to close this gap. Beginning with the apparel industry, we are developing operationally-oriented performance measures that are well-suited to investor needs. Once this pilot is completed we will apply the lessons learned to other industries in the future.

 Featured Resources

READ OUR 2017 REPORT THAT EXAMINED HOW 12 LEADING SUSTAINABILITY MEASUREMENT FRAMEWORKS MEASURE SOCIAL FACTORS

READ OUR 2017 REPORT THAT EXAMINED HOW 12 LEADING SUSTAINABILITY MEASUREMENT FRAMEWORKS MEASURE SOCIAL FACTORS

READ ABOUT OUR WORK TO DEVELOP NEW A NEW APPROACH TO SOCIAL MEASUREMENT IN THE ECONOMIST

READ ABOUT OUR WORK TO DEVELOP NEW A NEW APPROACH TO SOCIAL MEASUREMENT IN THE ECONOMIST