Valid and reliable indicators of corporate respect for human rights can be fundamental to advance the business and human rights agenda. Indicators would allow States, businesses and NGOs to check progress and identify loopholes as well as best practices; they would also allow socially responsible investors to avoid human rights risks and direct their money towards sustainable businesses. Notwithstanding general agreement on the relevance of the topic, little research has focused on the question whether valid and reliable business and human rights indicators can actually be constructed. The paper aims at highlighting a number of practical and methodological challenges in the creation of business and human rights indicators. The first part of the paper defines business and human rights indicators and distinguishes them from human rights assessments based on an individual-narrative approach. The second part of the paper argues in favour of measuring compliance with responsibilities by companies rather that enjoyment of rights by rights-holders, and claims that indicators should focus on structures, processes and outcomes. The third section of the paper focuses on a number of practical challenges that run against the possibility to create valid business and human rights indicators. These include: how to overcome the problems of variance truncation and false precision? Is business and human rights data good enough to constitute a solid basis on which to create valid and reliable indicators?
