Promoting Transparency and Accountability in Social and Human Rights Data: The Vital Role of Open Data and Collaboration
Join our event “ESG Investing: Unlocking the Power of Open Social Data” 30th July 16:00 CEST — Register here
As investors increasingly prioritize environmental, social, and governance (ESG) factors in their decision-making and stewardship activities, the need for accurate, comprehensive, and accessible data on corporate human rights performance has become crucial. Recent findings highlight significant gaps and challenges in current data-collection practices by commercial providers, underscoring the critical importance of open data and collaboration among civil society organizations.
The Current Landscape of Corporate Human Rights Data
A recent report on investors and the ESG approaches to human rights from the UN Working Group on Business and Human Rights sheds light on the limitations and issues prevalent in current data practices. Commercial data providers often focus on the existence of human rights policies or public controversies, offering a narrow view that lacks stakeholder engagement and a holistic perspective on assets’ alignment with human rights principles. Additionally, the proprietary nature of many methodologies and metrics used by these providers results in a lack of transparency, leaving investors and stakeholders in the dark about the real human rights impacts of their investments.
The report also highlights several critical issues:
- Over Investor-Centric Approach: Human rights are often assessed for their impact on investors (single materiality) rather than in combination with affected communities (double materiality).
- Aggregation Issues: ESG ratings often combine diverse criteria into one score, obscuring specific human rights issues.
- Conflicts of Interest: The business models of some data providers can lead to conflicts of interest, affecting the objectivity of ratings and assessments.
These findings align with our recent learning paper on ESG data.
The Need for Open Data and Collaborative Efforts
Given these challenges, the need for open data initiatives and the involvement of civil society organizations in data collection and dissemination is clear. Open data initiatives provide several key benefits:
- Transparency: Open data platforms make methodologies and data sources publicly accessible, ensuring that all stakeholders can understand and verify the information.
- Comprehensiveness: By engaging with a wide range of stakeholders, including human rights experts, civil society organizations, and affected communities, open data initiatives can offer a more complete and nuanced picture of corporate human rights performance.
- Accountability: Publicly accessible data allows for greater scrutiny and accountability of corporate practices, empowering stakeholders to make informed decisions and advocate for better policies.
The Role of Collaboration in Enhancing Data Quality
Collaboration between various entities, including civil society organizations, trade unions, academic institutions, and affected communities, is crucial in enhancing the quality and reliability of human rights data. This collaborative approach ensures that data collection is more inclusive, reflecting diverse perspectives and ground realities. Greater collaboration and open data can drive change through:
1. Crowdsourced Data Collection: Leveraging the collective knowledge and efforts of various stakeholders can lead to a richer and more accurate data set. Crowdsourced data collection allows for the inclusion of diverse sources and viewpoints, making the data more comprehensive.
2. Engagement with Experts: Partnering with human rights experts and organizations ensures that the data collected is relevant and accurately reflects the human rights impacts of corporate activities. This engagement also helps in developing more robust methodologies for data collection and analysis.
3. Engagement with affected communities: Civil society organizations and academic institutions can play a pivotal role in connecting investors, companies, and the public to those affected by corporate impacts on people and the planet through data.
Moving Forward: The Path to Better Data
The report’s recommendations provide a roadmap for improving the quality and transparency of human rights data. Key among these recommendations is the call for businesses to disclose their human rights impacts comprehensively and for data providers to adopt transparent methodologies. Open data initiatives and collaborative efforts such as those championed by Wikirate are essential in this endeavor, offering platforms where data is openly shared, scrutinized, and utilized for the greater good.
The role of open data and collaboration among civil society organizations cannot be overstated. As we strive for a more transparent and accountable corporate world, these efforts will be instrumental in ensuring that human rights considerations are at the forefront of ESG investments. By promoting open data and fostering collaboration, we can create a culture of accountability that benefits investors, companies, and, most importantly, the people and communities impacted by corporate activities.
Join our event “ESG Investing: Unlocking the Power of Open Social Data” 30th July 16:00 CEST — Register here
