Ethical Performance
inside intelligence for responsible business


Majority of Asian companies ‘failing to recognise basic employee rights’

November 2011

Nine-tenths of Asian companies have no human rights policies covering their operations in sensitive countries, and are failing to consider the International Labour Organization’s basic areas of freedom of association, the right to collective bargaining and the prohibition of forced and child labour.

The allegations come in an Eiris report on the ‘state of responsible business’ in the region, which concludes that, although Asian companies are making progress on climate change, they continue to ignore stakeholder issues and other environmental risks such as water management and biodiversity.

Almost 90% of human rights risks are going totally unmanaged by companies operating from Asia, and only a tiny proportion are deemed to be taking acceptable measures.

The assessment of Asian human rights policies does, however, put the region ahead of North America, which does not have policies in place.

But Asian companies are facing the highest number of allegations, and their supply chain management lags far behind other regions.

Perhaps most worryingly, China continues to lag behind its neighbours, though Japan and Korea show relatively strong performances in all areas.

Mark Robertson, Eiris’s head of communications, said: “There is a growing focus on ESG in Asia, driven by interest in the region from global investors and nascent demand from local institutions.

“But more work is needed if companies, particularly those based in China, are to respond to investors and meet the governments’ aim of enhancing corporate reputations through enhanced policies, management systems and reporting systems on ESG issues.”

Eiris concludes that regulatory pressure and more stringent reporting requirements are needed to drive CSR uptake in Asia.

Ethical Investment Research Service | Asia | Human rights

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