June 9, 2020

Today Investor Advocates for Social Justice (IASJ), is pleased to release its new report: Shifting Gears, An Assessment of Human Rights Risks & Due Diligence in the Automotive Industry. This report is part of the ongoing, multi-year shareholder advocacy campaign called the Shifting Gears Initiative, in which faith-based investors are engaging with 23 auto companies in their portfolios with the goal to improve human rights due diligence. After thorough assessment of each company’s publicly available disclosures, the report finds that companies overall are failing to conduct effective human rights due diligence. BMW, Ford and Volkswagen emerge as leaders while Denso, Honda, and Nissan stand out as laggards.

Human rights due diligence is especially important for this sector given the high risk of companies contributing or being linked to serious human rights impacts such as child labor, forced labor, and hazardous working conditions in the supply chain. There are also serious labor rights risks impacting workers in domestic manufacturing operations, including racial justice and exposure to Covid-19. For investors, these represent legal, financial, reputational, human capital management, and regulatory risks. To address these risks, companies should strengthen governance of human rights, increase efforts to embed respect for human rights across the business, improve traceability and transparency throughout the supply chain, undertake effective monitoring of suppliers on human rights, and provide access to grievance mechanisms and support provision of remedy. 

This proxy season, IASJ Affiliates filed shareholder proposals with three of the companies that scored poorly on various human rights themes: Lear Corporation, General Motors Company (AGM June 16) and Tesla, Inc (AGM July 7).

IASJ partnered with Sustainable Investments Institute (Si2) to conduct research and develop the scoring methodology to assess 21 automotive companies. The report includes individual company profiles, a detailed scorecard benchmarking company performance on seven scoring themes, and a history of human rights violations in the auto industry. The report includes an overview of salient human rights issues for the auto sector, a call to action for investors to engage the sector, and recommendations for companies aligned with the UN Guiding Principles on Business and Human Rights (UNGPs).

Below you will find the final company scorecard and key findings from the report. The Full Report and Executive Summary are available for download here:

Full Report
Executive Summary
Webinar




For any questions regarding the Shifting Gears Initiative, please contact Mary Beth Gallagher (mbgallagher@iasj.org) or Gina Falada (gfalada@iasj.org).

Investor Advocates for Social Justice (IASJ), a successor to the Tri-State Coalition for Responsible Investment, is a 501(c)(3) non-profit organization representing investors with faith-based values who seek to leverage their investments to advance human rights, climate justice, racial equity, and the common good. On behalf of our Affiliates, we engage companies to address strategic environmental, social, and governance issues and advocate for change. IASJ uses a variety of shareholder advocacy strategies to encourage corporations to adopt more ethical and sustainable business practices, and believes in seeking out and building collaborative partners who share similar goals, in an effort to increase the effectiveness and impact of our work. Founded in 1975, formerly known as Tri-CRI, we have over forty years of experience with shareholder advocacy and responsible investment.