ESG Rating Methodology
Assessing Security-Related Human Rights Risks for ESG Rating Agencies
The GCBHR developed this ESG rating methodology together with the International Code of Conduct Association (ICoCA) to assess the “S” in ESG in relation to security and human rights. The methodology was developed as part of the Business and Human Rights Clinic.
This methodology encompasses 19 indicators to measure companies’ due diligence performance in relation to security-related human rights issues. It enables the investor community to assess the strength of companies’ human rights due diligence and can be used by rating agencies and companies alike.
Companies face different types of risks in relation to security providers, such as risks to decent working conditions, job security, and employees’ mental health and well-being, as well as risks in relation to security guards potentially infringing on the human rights of employees and local community members.
This ESG rating methodology presents concrete indicators to assess due diligence along four phases of the relationship between a company and a security provider, from pre-screening and hiring to monitoring and incident management. It provides a four-point scale with specific criteria to rate companies’ practices from insufficient to excellent.