#114 Bennett Freeman & Chloe Cole: How Have US Corporates Responded to the ESG Backlash?

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Frankly Speaking - A Podcast on Responsible Business 33 min 3 speakers 7 chapters transcribed 1 month ago
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What is the US Corporate Human Rights Index and why was it created?

Richard Howitt 0:01
Welcome to Frankly Speaking, the podcast on responsible business by Facbold, the European public interest law firm. I'm Richard Howitt, and after many years leading debates on responsible business in the European Parliament, I host our discussions about the very latest developments in corporate sustainability, sustainable finance, business and human rights. Today, the US Corporate Human Rights Index just published a new initiative to track the human rights policies and commitments of 54 major US companies across five high-risk sectors. Their report neatly sums up the dilemma facing US companies in its title, Retreat or Respect? Joining us to discuss this is one of the prime movers of the initiative, an old friend and an old friend of this podcast, Bennett Freeman, former Deputy Assistant Secretary of State for Democracy, Human Rights and Labour in the Clinton administration, and someone who has been behind many of the major developments in responsible business over the years, including the voluntary security principles, the corporate human rights benchmark, the Global Network Initiative, and now Business for Ukraine.
Richard Howitt 1:12
Welcome, Bennett.
Bennett Freeman 1:13
Thank you. Thank you, Richard. It's a pleasure to join you again.
Richard Howitt 1:16
And also joining us from Washington is Chloe Cole, senior researcher responsible for the initiative at the newly renamed Business and Human Rights Center. Chloe has a long history working in business and human rights in government, in NGOs, and in academia. Welcome, Chloe.
Chloe Cole 1:34
Thank you so much. I'm delighted to be here.
Richard Howitt 1:37
Now, Ben, at first, quite simply, what is your intent in doing this?
Bennett Freeman 1:43
You know, Richard, we've seen progress, significant progress in the business and human rights world over the last quarter century on both sides of the Atlantic and indeed around the world, including in the United States. That progress has been significant, positive overall, of course, also inconsistent, incomplete, and in places and at times, frankly, inadequate. But nonetheless, there is now a serious threat to not only continuing the progress, but even maintaining the gains that have been made by companies together with investors, NGOs, and the US government over the years. And those threats really are apparent both on the geopolitical stage, and I have to say, unfortunately, also on the domestic political stage here in the United States.
Bennett Freeman 2:42
And it became apparent to the Center and to me and to others immediately after the presidential election in November 2024 that there was a severe challenge to maintaining this progress. And we've seen this on other fronts, on climate, on diversity, but an acute challenge to maintaining progress in business and human rights, hence this initiative undertaken by the Center that Chloe is so capably leading.
Richard Howitt 3:16
And, Clary, when we deal with reports on this podcast, it's sometimes difficult to do justice to the depth of them. So can you begin by giving us a sort of high-level overview of what are the findings that have been produced?
Chloe Cole 3:31
Sure, yes. Okay, so we started with this question. How are top U.S. companies responding to all of the pressure out there, all of the anti-ESG, anti-rights pressure when it comes very specifically to human rights? And we did a few things.

How did the researchers identify the three response types—good, bad, and ugly—among US firms?

Chloe Cole 3:48
We did expert interviews. We talked to some of the companies that we're tracking. We did desk research. We also conducted a couple of surveys, which I'm sure we'll have time to get into. But here's what we found. We found evidence of three broad responses from U.S. corporations to today's context. You know, you can call this if you want the good, the bad, and the ugly. And I think, Bennett, that was a you-ism, which I think is a helpful framing here. Because here's the good. Let me tell you the good. On the one hand, we have many companies holding firm despite the pressure. They're maintaining their commitments. They're maintaining their teams. They're staying the course. Here's the bad. The bad is that some are very quietly retreating from human rights, reducing teams.
Chloe Cole 4:40
We're not seeing tons of policy change, but we're seeing some reduction in effort, in scope, in teams, in budget, in initiatives.

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