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Blog | Tuesday June 23, 2020

Access to Grievance Mechanisms and Remedy during the COVID-19 Crisis

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Providing remedy for individuals harmed as a consequence of company decisions and actions in response to the COVID-19 pandemic is a critical avenue for addressing not just this moment, but also the deeper inequalities that make our society vulnerable to crisis and for building resilience in the future.

COVID-19 has aggravated existing inequalities, with rapidly changing business operating environments requiring fast decision-making based on often imperfect information. There is little doubt that some company decisions will have caused harm to employees, local residents, or customers. Companies will be held to account and asked to rectify these harms and to fulfill their duties to provide access to remedy, a fundamental pillar of the UN Guiding Principles on Business and Human Rights (UNGPs).

The UNGPs outline the duty of the state, which is to protect human rights, and the responsibility of business, which is to respect human rights. The third pillar of the UNGPs is the requirement to provide individuals whose rights are harmed by business with access to remedy. Effective remedy has five recognized forms of reparation, which include a broad range of measures aimed at repairing the harm caused to survivors and victims: restitution, compensation, rehabilitation, satisfaction, and guarantees of non-repetition.

Access to remedy is the least developed and least well-understood and practiced pillar of the UNGPs and one that deserves more attention in general and should not be forgotten or overlooked during the COVID-19 pandemic, especially now as we move into new phases in our response to the pandemic. To ensure access to remedy during all phases of the COVID-19 crisis, companies should:

• Continue to ensure access to appropriate, independent, and effective grievance mechanisms, including dedicated hotlines, email addresses, instant messaging systems or applications, and letters and other written communication, to the extent possible, during all phases of the pandemic. Some companies will have to think creatively about how to ensure access to legitimate grievance mechanisms, with an understanding that many of the good practices that require face-to-face contact will have to be modified during this time. For all companies, it is important to ensure access to grievance mechanisms to enable reporting of non-compliance with safety measures and guidelines which have been adopted to protect people from COVID-19, not only for isolated communities and marginalized groups, but also for employees and contractors.
• For companies with large footprints, special considerations are needed for those located in isolated or remote communities. Communities with limited access to communications channels, communities which may be economically marginalized or have lower levels of literacy, or indigenous communities often have a greater dependence on person-to-person engagements to lodge complaints or submit grievances. Companies will have to think creatively about how to ensure access to legitimate grievance mechanisms during the global pandemic, with an understanding that many of the good practices that require face-to-face contact will have to be modified during this time and for some time in the future. It may be necessary, for example, to partner with trusted local organizations, like grocery stores and their suppliers, who have legitimate access to communities to gather and deliver grievances.
• Companies that rely on human moderators to review online content flagged for violating human rights and company policies should continue to prioritize reported content that has the greatest potential to harm when dealing with limited content moderator capacity while also ensuring that the data are preserved for future analysis with appropriate privacy controls in place.  These companies should also increase their investment in mental health support and resources for their content moderators, both to ensure their well-being and to adapt to the increased burden of harmful content that may result as a consequence of this global crisis.  
• Companies can avoid causing potential human rights-related grievances through their response to COVID-19 by conducting rapid human rights assessments and other due diligence before making decisions that could negatively impact human rights. This is especially important when rapid decisions are being made in the midst of a crisis, especially one like COVID-19 with potential human rights impacts. For example, companies can ensure responsible disengagement from supplier contracts during the pandemic by conducting rapid human rights assessments. If cancellation of supplier contracts is legal and absolutely necessary (after evaluating all possible options for alternatives), start by formulating a responsible exit strategy in consultation with potentially impacted rightsholders. For instance, ensure that workers and suppliers receive ongoing compensation for the duration of the unemployment or offer trainings and financial capacity building (microcredit) to mitigate loss of employment for workers and other people living in surrounding communities.
• As much as possible, continue with any efforts underway to remediate past harms that the company has caused or contributed to before the pandemic. If appropriate, use company’s leverage to push business partners to do the same.
• As the COVID-19 situation improves, conduct a post-crisis assessment to ensure that all grievances are lodged and assess if and how people have been impacted by company action (or inaction) during the pandemic. Companies will and should be held to account for their actions during the pandemic. Responsible companies will acknowledge harms and provide remedy.

While many restrictions remain in place and extreme caution is still needed, this is a moment when companies should start examining their approaches, both past and current, and ensure they are accountable for their actions. Failure to remedy past harms is not just counter to international standards outlined in the UNGPs—it can also destabilize the business environment whether due to social unrest or increased vulnerability to crisis.

Blog | Wednesday June 17, 2020

Blockchain through the Whole Supply Chain: Traceability Builds Business Resilience

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Over the past year, The Estée Lauder Companies and Aveda have been working with LMR Naturals by IFF, BSR, and Envisible to establish a blockchain-enabled traceable supply chain that identifies opportunities to deliver sustainability benefits to all the actors in the supply chain. This post is the third in a series documenting the journey of this innovative partnership and follows up on a first blog (published in July 2019) and a second blog (published in December 2019). 

COVID-19 has caused shockwaves across global industries as most of us throughout the world experience firsthand the challenges of supply chain resiliency and transparency. From sudden shortages of certain food and household staples to questions about the safety or future availability of certain items based on their source of manufacturing, we are all realizing that we live in an extremely interconnected but paradoxically opaque world.  

At first these shortages could be dismissed as simply a rush of demand that outstrips supply (i.e. panic and hoarding), but as we explore deeper, we can find curious anomalies about the way many supply chains function. A realization begins to emerge that many supply chains are only designed to function within the framework of a globalized society with its multitude of interdependent systems that can be relied upon to predictably function all the time, exactly as expected. And then...the unexpected happens, and it becomes painfully clear that traceability, transparency, and resilience are the only way to ensure a lasting and sustainable business model. 

When we begin to emerge from the shock of the current worldwide health crisis and its impact on the global economy, smart businesses will take this opportunity to reevaluate their supply chains in order to reduce the unknowns that erode resiliency when unanticipated changes occur. This means having a granular understanding of not only your suppliers, but the suppliers of your suppliers and the associated risks to which you are exposed, so that in the future businesses can better anticipate both direct and indirect concerns. 

By taking steps to ensure greater visibility into supply chains before times of crisis, companies gain greater awareness of potential critical disruptions, or other unexpected business concerns, that might arise in the future.

Over the past nine months, LMR Naturals, BSR, and Envisible have been working with The Estée Lauder Companies and Aveda to better understand these issues in a supply chain that starts on a bumpy road in rural Madagascar and ultimately crosses three continents to deliver the vanilla that is an essential component to the many of Aveda’s fragrances and formulas. Our work began long before COVID-19 and involved laying the track for a fully digitized supply chain, with transactions at each point in the chain of custody being immutably recorded on a blockchain using Wholechain. It started as an exercise—a compulsory first step—to facilitate sustainable and responsible sourcing all the way back to a co-op of smallholder farmers.  

This product has enabled The Estée Lauder Companies and Aveda, along with its natural ingredients partners LMR and the local cooperative Biovanilla, to achieve full traceability and greater visibility into the vanilla supply chain in real time. This will enable it to move forward on a path toward obtaining fully sustainably sourced vanilla in Madagascar—a win for the companies and for the cooperative and the farmers with whom it works. 

Now in light of COVID-19, this important work reveals a broader opportunity to evaluate the systems that enterprises have in place to monitor the myriad indirect yet consequential concerns that arise in our interconnected world. 

By taking steps to ensure greater visibility into supply chains before times of crisis, companies gain greater awareness of potential critical disruptions, or other unexpected business concerns, that might arise in the future. So, what are some supply chain lessons we can take away from this work, especially in light of COVID-19? 

• Full supply chain awareness is critical. Businesses need to monitor not only their suppliers but their suppliers’ suppliers in order to truly anticipate risks that might arise. There are solutions even for the most complex supply chains, even for companies with relatively small procurement leverage. 
• Digital verification is increasingly important. Businesses have become all too accustomed to hopping on planes in order to understand issues on the ground. COVID-19 has not only made this impossible for a time, but it has raised our awareness of the risks involved with depending solely on local, physical verification of sourcing locations. 
• There is no reason not to start now. The rise of digital tools and solutions to monitor and analyze certain supply chains could significantly improve transparency and resilience in anticipation of the next global crisis. This will better enable business leaders to understand risk exposure, position themselves to respond to disruptions, and promote sustainability collectively along their supply chains.

The common and appropriate management refrain is to "never let a good crisis go to waste." COVID-19 has been a wake-up call on many levels in our globalized world, exposing economic and social blind spots that will demand collective innovation. If there is a positive result that can emerge from this crisis for businesses, it will be a lesson in resilience: use this opportunity to become better prepared for future unexpected disruptions. A transparent supply chain is one element that business can tackle now.  

Blog | Tuesday June 16, 2020

Supporting LGBTI People during Pride Month 2020 and the COVID-19 Pandemic

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In 2019, lesbian, gay, bisexual, transgender, and intersex (LGBTI) communities around the world filled city streets for LGBTI Pride in commemoration of the 50th anniversary of the Stonewall Riots, one of the most important events contributing to the launch of the gay liberation movement and the fight for LGBTI rights in the United States.

In stark contrast, this year’s Pride festivities have been canceled or moved to virtual platforms due to the COVID-19 pandemic, and LGBTI communities, like other vulnerable groups, have been hit hard by the crisis. While Pride is now synonymous with festive celebrations and has become a staple of mainstream and corporate culture, it began as a series of riots led by trans women of color against police brutality and racial, gender, and sexual orientation discrimination.

As we celebrate Pride Month in 2020, with protests against brutal police violence and racial discrimination against Black people erupting around the world, it is more important than ever to recognize the struggles of disenfranchised communities all over the world and the interconnectedness of these struggles for justice and equality.

But first, some good news. On June 15, 2020, the U.S. Supreme Court held that LGBTI people are protected from workplace discrimination under the Civil Rights Act of 1964, ruling against the Trump administration, which sought to exclude sexual orientation from protected classes. This resounding victory for LGBTI rights is consistent with international human rights principles, particularly those articulated in the UN Guiding Principles on Business and Human Rights (the UN Guiding Principles) and the UN Standards of Conduct for Business Tackling Discrimination Against LGBTI People (the UN Standards). It also affirms the important work the private sector is doing and must continue to do to create inclusive environments for LGBTI employees, customers, and communities wherever they do business.

Which brings us to the bad news. Despite a lot of good work to address inclusivity by the private sector, LGBTI communities around the world remain as vulnerable as ever. COVID-19 has exposed many of the structural and systemic issues disproportionately impacting vulnerable populations, including people of color, LGBTI people, migrants, and more, who were hit hardest by COVID-19. The LGBTI community, for example, suffered from limited access to and deprioritization of healthcare services, stigma and discrimination, violence and abuse, and a decrease in access to work during this crisis, as highlighted by the UN Office of the High Commissioner for Human Rights. These factors existed prior to the pandemic but were quickly exacerbated as LGBTI people sought protections and support during the crisis.  

In response to the severe impact of COVID-19 on LGBTI communities around the world, the Partnership for Global LGBTI Equality (PGLE), a collaborative initiative of BSR in partnership with the World Economic Forum and UN Human Rights, along with our NGO partner OutRight Action International, launched the COVID-19 Global LGBTIQ Emergency Fund. Established by OutRight, the Fund supports LGBTI organizations on the frontlines of the pandemic in the global South, addressing a range of humanitarian needs such as emergency food and/or shelter, access to safe and competent healthcare, safety and security, and financial stability.

The Fund will continue its efforts to mobilize the private sector to support this effort throughout Pride Month and beyond, giving companies an opportunity to reallocate resources in light of cancelled Pride events. Prioritizing financial support to LGBTI communities and advocating on their behalf are concrete steps that the business community can take to empower LGBTI movement leaders and ultimately ensure the survival and long-term viability of local partners leading the grassroots effort to tackle discrimination against the LGBTI community.

Contributing to this emergency relief fund is another way companies can fulfil their commitments under the UN Standards, in particular Standard 5, “Act in the Public Sphere.” PGLE’s mandate is to help companies implement these standards and take action to meet the expectations which they articulate, which include supporting LGBTI communities around the world. And in light of the U.S. Supreme Court’s recent ruling, it is as important as ever for the private sector to ensure it is promoting inclusivity of and eliminating discrimination against LGBTI people. Companies interested in becoming supporters of the UN Standards can visit the PGLE website to learn more.

The private sector has an opportunity to drive impactful change for LGBTI people around the world, particularly during the ongoing COVID-19 crisis and the civil unrest as people rally and demand an end to racial injustice and police violence around the world. We have an opportunity to mobilize a different kind of Pride campaign this year, one focused on fulfilling the vision of the UN Standards and providing essential financial support in a time where LGBTI communities and nonprofits are facing an acute threat to their health and well-being. For millions, Pride has always been a celebration of survival from persecution and discrimination. This year, the sentiment is even more urgent, and we all must come together to strengthen our commitment and work towards a more inclusive, tolerant, and supportive world for all.

Blog | Thursday June 11, 2020

A Human Rights-Based Approach to COVID-19 Decision-Making

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Every action and decision that companies and governments alike make in the fight against the COVID-19 pandemic has the potential to impose significant human rights impacts on employees, supply chains, customers, and communities around the world.

The impacts of both the pandemic and the swift decisions leaders are having to make to address the risks carried by the virus affect different stakeholders in distinct ways, with vulnerable populations bearing the brunt of not only the virus itself, but the economic consequences as well. Because of this, many human rights organizations, such as the UN’s Office of the High Commissioner for Human Rights (OHCHR), have issued statements urging governments and companies to take into consideration the specific needs of rightsholders, particularly vulnerable populations, when developing responses to COVID-19.

Beyond identifying and understanding the impacts of the pandemic on particular populations, companies face additional challenges based on their unique operating circumstances. Indeed, the crisis is playing out in very different ways across sectors, industries, and geographies. For some, COVID-19 has introduced an opportunity to more deeply integrate and embed their platforms and services as the world shifts into a new operating paradigm. For others, the pandemic presents an existential crisis that has severely impacted the business models and long-term viability of entire sectors—from travel and tourism to retail and hospitality, and many more.

To address the diverse impacts and potential approaches companies may face in this crisis, particularly as industries adjust to a new “normal” for the long term, BSR has developed three primers on how to respect human rights during the COVID-19 crisis: one for the energy and extractives sector, one for the food, beverage, and agriculture sector, and one for the transportation and logistics sector.

Regardless of how COVID-19 may affect these three sectors and others differently, a human rights-based approach means understanding how the decisions a company makes in response to COVID-19 impact its own employees, contractors, and supply chain workers and seeking to minimize or eliminate any adverse impacts to the greatest extent possible. While the primers focus on three specific sectors, the approach they outline for thinking through how the pandemic may impact human rights can be applied across industries. Furthermore, the risks highlighted in these three sectors present a range of risks that illustrate of the types of issues many other sectors may face—from protecting employee privacy concerns once testing and tracing is implemented to weighing a balance between communal needs and employee health and safety.

How such decisions are made may impact the following rights, which the primers explore in more detail:

• The right to a safe and healthy work environment, due to heightened risk of contracting the virus in the workplace
• The rights to work and to an adequate standard of living, due to layoffs, furloughs, or shutdowns, particularly in countries where unemployment benefits such as medical coverage or paycheck protection are limited or nonexistent
• The right to privacy, as employers and local governments implement preventative measures to test, track, and trace

In some cases, companies—especially those providing essential services—will have to balance the rights of their employees against those of their customers and local communities. This will require a thoughtful, human rights-based stakeholder engagement approach, weighing the impacts on the various stakeholders and including them in this process.

While these primers are not meant to cover every potential human rights issue emerging from COVID-19 across all sectors, we hope they offer companies enough guidance to be able to address any challenge that may emerge through a human rights lens. If you would like to know more about how to ensure respect for human rights in your company’s pandemic response, please get in touch.

Blog | Wednesday June 10, 2020

Today and Tomorrow: COVID-19 and the Increased Relevance of Corporate Sustainability

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With the spread of COVID-19 creating a crisis that is unprecedented in living memory, there is not an element of our lives that has remained unaffected. And this is especially true for business. 

At GlobeScan and BSR, we spend our time working with some of the largest businesses in the world. We wanted to understand both the immediate effect on the sustainability efforts of the companies we work with and also to begin to understand what long-term implications they are anticipating as a result of the pandemic. 

To that end, we surveyed 102 companies across our global networks. 

In the short term, sustainability teams have been involved in the response to COVID-19 in a myriad of different ways. When we asked what was the most important role that the sustainability function has played so far, respondents highlighted community engagement (19 percent), providing advice and support to the business (14 percent), stakeholder engagement (13 percent), health and safety activities (10 percent), and philanthropy (10 percent). 

The survey results show that one of the biggest longer-term outcomes of the COVID-19 pandemic may be a marked increase in the importance of corporate sustainability. Four in ten respondents (40 percent) say that the crisis will increase both the relevance and expectations for sustainable business. Moreover, over a third (36 percent) say that the agenda for sustainable business will change as existing priorities increase in prominence and new issues arise. 

Resilience is having its moment, as more leaders recognize the strategic value of sustainable business models which improve their company’s ability to anticipate and prepare for fast-moving, unexpected shocks. It will be worth watching the extent to which business leaders continue to see sustainability as a primary source of strategic advantage and as a driver for rebuilding the global economy. 

Resilience is having its moment, as more leaders recognize the strategic value of sustainable business models which improve their company’s ability to anticipate and prepare for fast-moving, unexpected shocks.

When asked which elements of their company’s sustainability strategy would be most affected, over four in ten highlighted supply chains (44 percent), with others mentioning inclusive growth (31 percent), climate action (29 percent), and philanthropy (28 percent). 

It is worth noting the reported impact on inclusive economic growth. In our 2019 annual State of Sustainable Business Survey, this area of the sustainability agenda has traditionally been a lower priority, behind climate, human rights, and workers’ rights. It will be interesting to see whether inclusive economic growth becomes a more important corporate priority given the monumental business and socioeconomic impact of the COVID-19 crisis. 

Given the significant impacts of the COVID-19 crisis, it is perhaps not surprising that almost half of respondents (47 percent) are anticipating budget cuts for their sustainability efforts within the next 12 months. By comparison, at the onset of the Great Recession in 2008, we asked a question to a similar cohort of businesses and just under a third (31 percent) said that they were expecting a budget cut. It will bear watching whether this downward pressure will be alleviated by the countervailing recognition of the increased relevance of sustainability to business longevity and success mentioned above. 

While many sustainability teams may be more challenged when it comes to resources, it comes at a time of great urgency for many of the sustainability issues that companies are facing. The crisis and its impacts will continue to create demands on companies to build more resilient businesses while also addressing systemic challenges facing society, including racial and income inequality, the transition to a net-zero greenhouse gas economy, the rise of automation and artificial intelligence (AI), human rights, and overall health and well-being.   

It is already becoming clear that going “back to normal” is neither likely nor desirable. The challenge for us continues to be meeting the moment while building for the future, and the work of sustainability teams remains essential. Sustainable business can be a catalyst for the change that is needed, and sustainability professionals will need to rise to the leadership challenge that is before them. We have seen it happen before. We hope it happens again. 

Blog | Thursday June 4, 2020

An Open Letter from BSR on Racial Justice

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Dear BSR Members and Partners,

The brutal killing of George Floyd by Minneapolis police officers last week—following on the previous killings of Ahmaud Arbery, Breonna Taylor, Eric Garner, Alton Sterling, Trayvon Martin, and countless others—is yet another example of the systemic and institutional racism that persists in the United States.    

We are heartbroken and outraged by these injustices. This is a deep stain on the promise and reality of the United States. It has been for more than 400 years.  

Black Americans continue to face repression and unspeakable treatment by the police, with too many innocent lives ended prematurely, and violently.   

And while this inhuman treatment reveals this awful truth in the starkest way, we know also that there are countless other ways that so many are deprived of their human rights. Black Americans face deeply entrenched barriers in the workplace, in education, and basic daily activities: profiled on public transportation, attacked and murdered for “running while black,” and even intimidated when doing something as innocuous as birdwatching. And for the last three months, we have watched as COVID-19 has killed disproportionate numbers of Black Americans. 

This is unacceptable, and it is time for change. 

There is much to be done, by all of us—to listen, to learn, and to speak out—and then to act.   

• For BSR: We have a long way to go. We can and must do more to become a more diverse and inclusive organization. While we don’t have all of the answers, we know we must do better. For us, this is a time to listen, to learn, and to begin to do the hard work we know will be required. And we encourage our partners and others in our community to hold us accountable when we fall short. 
• For the sustainability community: We can and must become more diverse. And we need to work together, both to effectively and meaningfully integrate racial justice into our vision for sustainable business and to set an agenda for how companies can protect and defend the human rights of their employees, customers, and users. 
• For business: Your leadership is needed on this issue. This begins with changing employment practices and investments that are critical engines of economic opportunity that can influence outcomes for generations. It also extends to using your influence, partnerships, and voice to change the public policies that have enabled systemic and institutional racism to persist. The anger and frustration we feel right now is raw. As so many of my thoughtful colleagues have said over the last few days of dialogue, we need to commit to change today, and not only that. In addition to speaking out at important moments like this, we must maintain this effort over time, and not simply when the world’s attention is upon it. 

History is full of moments of great pain and tragedy. It is also a story of turning points. Let us hope—and let us commit—to making this a turning point, one that we can be proud of, and one that honors the memory of George Floyd and the many victims who came before him. 

Blog | Thursday May 21, 2020

Rising to the Top: Six Big Sustainability Issues Companies Should Watch During COVID-19

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We are now in the third month since the global effects of the COVID-19 pandemic and related economic shock changed our present, and very likely our future. While there are signs of public health recovery in many places, the economic impacts of this generational event will be felt for a long time to come.

It is now possible to begin to draw some conclusions on the impacts of the coronavirus on sustainable business. First and foremost, despite the serious economic issues facing companies everywhere, there are strong signs that the commitment to sustainability remains strong. Companies continue to understand and appreciate that sustainability was a core part of resilient business strategies before the virus hit, is a primary source of strategic advantage, and will be a crucial part of rebuilding the global economy.

This has been reinforced by investors. There are hopeful signs that the mainstream investors that have upped their commitments to environmental, social, and governance (ESG) considerations remain all in. ESG-pegged funds have performed better and experienced smaller declines during the initial pandemic stock sell-off: Data indicate that almost 60 percent of the biggest U.S. ESG mutual funds performed better than the S&P 500. Data from Morningstar indicate that in March, as market activity slowed dramatically in the face of lockdowns around the world, 62 percent of ESG-focused large-cap equity funds outperformed the MSCI World Index. 

But this is not to say that sustainability won’t be changed by the deep and wide impacts of one of the most transformative three-month periods in a century: It undeniably has.

Let’s face facts: Many companies are hurting, facing existential questions, liquidity problems, and just plain limited bandwidth. In this context, many of our partners at BSR member companies have asked me, “is it tone deaf to be talking about sustainability now?” My answer has been: No, it’s not, but how you talk about it, and what you prioritize, matters greatly.

The parts of the sustainability agenda that deliver top-line value, motivate coworkers, and demonstrate to customers that a company is looking after more than short-term financial gain are the things that matter right now.

It is also the case that the issue set has to adapt. Here are the “Big Six” issues rising in importance.

• The “S” in ESG is more important than ever. The social agenda is more important at a time when tens of millions of people have lost their jobs and people are concerned about their livelihoods, health, and ongoing social cohesion issues. Labor practices will come under increased scrutiny. Women and marginalized communities have been disproportionately disadvantaged by the impacts of the crisis: Their needs demand our attention. BSR works with its members to advance diversity and inclusion, inclusive economic growth, and human rights, all of which are more central than ever to meeting the needs and expectations of employees, communities, regulators, and investors.
• The use of new technologies is accelerating, along with the need to consider human rights and privacy implications. While this topic has been growing in importance, new use cases for contact tracing and workplace monitoring will present significant questions about how to balance health and safety with privacy and human rights standards. We have been aiding companies to align the promise of new technologies with human rights principles, and this is now higher on every company’s agenda.
• Supply chains are under enormous pressure, with companies looking to ensure continuity and address dislocation of workers who have been laid off or furloughed. Tens of millions of workers in global supply chains, many of them women, face increased economic hardship, while fending off a rise in gender-based violence. Companies also need to preserve their supply chains to meet the eventual return of consumer demand. Our HERessentials project is helping to ensure that the needs of millions of women facing lost livelihoods due to the pandemic are met.
• Executive compensation and tax practices are coming under increased scrutiny as job losses reach historic proportions. For too long, we have left economic equity out of the sustainability agenda, and that has to change in the wake of historic economic dislocation. One of the ways BSR is taking on this issue is working with our member companies and other partners to redefine the social contract. Look for more from us on this subject next month.
• One of the most dispiriting statistics to come from the last three months has been the amazing drop in emissions as a result of the economic shutdown. But it is not close to what we need to achieve every year to meet the goals of the Paris Agreement. This should remind us how much innovation is needed to urgently bend the emissions curve and achieve the progress required on climate. The good news is that investors remain committed, creating a clear and direct incentive for companies to stay on track. Our ongoing efforts to assist companies with TCFD assessments, Scope 3 plans, and climate resilience continue apace, with good signs that the business commitment to climate action remains strong.
• Finally, health and well-being is rising on the agenda. Beyond the obvious need to ensure that the virus is tamed as rapidly as possible, business has more incentive to look after both the physical health, but also the well-being of colleagues who are navigating an unexpected and difficult time. Strategic investments in healthy business pay dividends. Through our Healthy Business Coalition, we work with companies who are investing in health along their value chain. Companies with healthier supply chains have more productive workforces, are better able to serve customers, and help consumers to live longer, more fulfilling lives, resulting in thriving communities. This work has taken on even greater importance in the context of the coronavirus.

There is much to play for. Many of our neighbors and colleagues are facing uncertainty, urgent health needs, and a long road back to economic vitality, all while our climate and environmental challenges remain fundamentally important.

We who promote sustainable business need to up our game. Our work remains essential and critical to business success and resilience. But that will only be the case if we adapt our approaches and the issues and solutions we bring forward. I remain confident we can meet the moment and build a better future. We have to get out of our comfort zone to make that happen.

Blog | Wednesday May 20, 2020

The BSR Conference Reimagined

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The COVID-19 pandemic is more than a health crisis, affecting nearly every aspect of society. From the economy, to education, to the way we use technology and how we conduct public and civic life—society is being reshaped in unprecedented ways.

Our work with you has never been more relevant. At BSR, we remain focused on our commitment to help businesses succeed, to become more resilient, and to build a more just and sustainable world. Indeed, we are more convinced than ever that sustainable business is the key driver of business value, and one of the best ways that companies can meet the moment and build the future.

One of the biggest ways this is affecting us, of course, is our ability to convene in person with our members, partners, and other friends in the sustainability world. 

The health and safety of our community and society at large is our top priority. For this reason, the BSR Conference 2020 is going virtual.  

While we are disappointed not to be able to gather in person, we are excited about the opportunity to reimagine every aspect of our annual event. We will shift, for this year, to a digital experience that will connect our global community in brand-new ways, with content and participants who will join us from our eight locations in Asia, North America, and Europe. There is no silver lining to a pandemic, but the virtual platform will give us an opportunity to cover some important emerging topics and to invite new participants and voices to join us in a truly global conversation.

Planning is underway to deliver a great experience that will feature the best of our in-person gathering, presented in new ways. We will keep you updated every step of the way. The Conference will be held from October 20-22, and a more complete agenda will be announced next month. To stay informed on the latest developments, sign up to receive announcements right in your inbox or visit bsr20.org.

We look forward to “seeing you” in October.

Blog | Tuesday May 19, 2020

A Post-COVID-19 Agenda for Sustainability Reporting

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As COVID-19 continues to cause significant turbulence for business and now collides with the arrival of spring “peak reporting season,” companies are experiencing a moment of introspection and posing several questions to themselves: What business risks did our Form 10-K miss? Which nonfinancial data would have helped us better determine our exposure or resilience? How might our definition of what constitutes a "material issue" change? What COVID-19 related information do stakeholders need to judge the effectiveness of our response? 

The world of sustainability reporting after COVID-19 will be very different than the world that preceded it. What should change?  

How Companies Can Improve Sustainability Reporting Moving Forward 

1. Reexamine the materiality assessment and its integration into enterprise risk management. Materiality assessments are the building block of a good sustainability report, enabling companies to identify sustainability issues that are important to both their stakeholders and to business success. As society emerges from the current crisis, materiality assessments can be overhauled in two main ways: First, the clear financial impact of "nonfinancial" environmental, social, and governance (ESG) issues during COVID-19 reinforces the need to better integrate sustainability into Enterprise Risk Management (ERM). Second, companies can use materiality assessments to explore the relationship between a company’s impacts on a sustainability issue and the impact of that issue on the business. Rather than seeing, say, supplier diversity as a “nice to have” that might fall in the middle of the pack relative to other sustainability topics, how does the issue interact with the core business or change a company’s risk exposure?  
2. Determine what information stakeholders need to judge the effectiveness of company response to COVID-19. Stakeholders will eventually look back on how companies responded during the COVID-19 pandemic—and this will require new disclosures to help readers understand how well a company responded. Stakeholders will look for new information on important sustainability issues and insights into company decision-making processes, so companies would be well served by consulting with stakeholders to find out what information they may seek in the future. For example, stakeholders may wish to understand how a company considered the needs of its most vulnerable employees or local communities, whether it undertook human rights due diligence of COVID-related decisions, and how it balanced short-term needs with long-term resilience.  
3. Significantly increase connectivity between sustainability and financial reports. A sustainability report provides an annual account of how a company responds to issues of material significance to stakeholders and serves as a reference point where companies can provide a formal description of their strategy, approach, and performance. COVID-19 has revealed just how impactful nonfinancial ESG issues can be on the financial performance of a business. Now that this connection has been made so evident, companies should use this as the impetus to more closely link nonfinancial and financial reporting. This may imply incorporating more Sustainability Accounting Standards Board (SASB) metrics into financial reporting or increasing cross-references between sustainability and financial reports. This is especially significant in the context of the EU Non-Financial Reporting Directive, which presents an opportunity to further align complementary approaches to the disclosure of sustainability information. 
4. Take inspiration from climate reporting to disclose on company resilience. COVID-19 has increased attention on risk factors, including public health threats, supply chain disruptions, and operational flexibility. To improve reporting on resilience, companies can draw inspiration from the Task Force on Climate-related Financial Disclosure (TCFD). The TCFD recommendations provide a compelling framework for companies to report their climate-related risks and strategies to mitigate them, but the COVID-19 pandemic clearly illustrates that systemic nonfinancial risks extend beyond climate change and span a wide range of social and other sustainability issues. Given the significant traction gained by the TCFD’s four-pillar framework (governance, strategy, risk, metrics and targets), we believe that a similar approach can be deployed across social and sustainability issues in order to report and manage such risks. This can include the use of scenario analysis to set out a range of plausible futures and describe how the company may respond to each, with the goal of improving resilience to the sustainability challenges society will likely face in the years to come. 
5. Collaborate with industry peers to ensure comparable COVID-19 disclosures. Stakeholders today benefit from companies using the Global Reporting Initiative (GRI) and SASB standards and TCFD recommendations. These frameworks enable companies to provide reasonably comparable and useful information. However, no such template exists to compare how companies have responded to COVID-19. Rather than every company creating their own report in their own way, companies can look for opportunities to work with industry peers to create consistent COVID-19 reporting taxonomies, disclosures, and metrics so that investors, stakeholders, and policy makers can make easier comparisons.  

Though COVID-19 has caused unprecedented disruption for many companies, we believe that more integrated, comparable, and standardized reporting will be needed to “build back better.” Such reporting can both meet the new information needs brought to light by COVID-19 and strengthen companies’ decision-making, risk management processes, and overall performance in the long term.  

As we recover, the question of whether or not the reporting field truly moves forward hinges on the extent to which financial and sustainability reporting converges and on whether reporting standards and nascent regulation accelerate this convergence. 

Blog | Friday May 15, 2020

Mitigation and Resilience Building: A Response to the COVID-19 Effects

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More than any crisis in recent history, the COVID-19 pandemic has demonstrated the urgency of creating more resilient businesses and economies. Countries, businesses, supply chains, workforces, communities—all are being affected by COVID-19 and other issues relating to resilience and COVID-19’s cascading economic, social and personal impacts, starting of course with those who have fallen ill or tragically passed, as well as caregivers and other front-line responders risking their lives.

COVID-19 is leaving tremendous disruption in its wake in other long-lasting and grievous ways. The required economic shutdowns mean loss of income and depletion of savings, not to mention the specter of widespread hunger. The cascading impacts on supply chains are manifest, as key inputs (from meats to component parts) slow to a trickle, causing broader business disruption. Meanwhile, the impacts of social distancing and remote working include, among others, acute family care challenges and rising rates of domestic abuse. 

COVID-19’s Impact on Supply Chains: Meet the Moment

Understanding the impacts of COVID-19 within the countries and supply chains producing your product are important to determining how your company can play a role in responding and mitigating current issues and investing in future resilience. The efforts your company undertakes now will have impacts on the safety, security, and livelihoods of those making your product in your operations and supply chains around the world. When looking at mitigation needs and opportunities, here are three important ideas:

1. Honor your contracts. Pay for what you’ve ordered and do not externalize additional financial liability on to your contractors and, via the contractors, the workers who produce your products.
2. Seek support payments for the impacted workforce. Vulnerable workers at the bottom of supply chains in your production line will be impacted the most by the COVID-19 crisis. Work with your industry, relevant governments, and international aid agencies to find money, resources, and other forms of support for those who need it most.
3. Triage and build lifelines. Help find support for the factories most important to your business today and in the coming future. Are there ways to connect loan guarantees, order histories, and future orders to factories to enable their resilience and workforce support?

COVID’s Impact on Supply Chains: Build the Future

The current crisis isn’t the first nor will it be the last. Investments in the resilience of your partners and their workforce will be important to overcome the next, inevitable crisis. 

• Seek to avoid the next crisis. Today it is a virus, next year it may be a typhoon, or a drought, or an earthquake, or a tsunami, or something else. Impacts from climate change are here and will continue. Business continuity planning is important to invest in at the site level, the firm level, and the supply chain resilience level. In addition to building your own business resilience, work with your vendors to build continuity plans covering their own businesses, extending to their community, and explicitly including the workforce.
• Understand potential impact, particularly those most at risk. Planning for the future means understanding the potential impacts on people—and in particular those most at risk. COVID-19 has shown, for instance, the sharp challenges faced by migrant workers, by those with the least resources, and often by women in facing economic, social, and personal hardship and even death.
• Invest in worker and employee resilience. Work to ensure 100 percent of workers in your factories and your own employees are paid via digital wages to enable easier access to financial resources and support during times of crisis. Create incentives to ensure your factories are educating their workers in the things that matter—from workplace skills training to financial literacy and savings, to health and hygiene, and including respect and the avoidance of workplace violence. Mirror this in your own operations, as the front lines of COVID-19 are everywhere and change rapidly. Invest in the skills, competencies, authority and culture of your own organization and staff to meet the moment and build the future. They are key to your future success.

Investments in the resilience of your partners and their workforce will be important to overcome the next, inevitable crisis. 

• Connect and build factory systems. Utilize and connect existing factory systems to create resilience and early warning capabilities. Your supplier’s health clinics should be appropriately resourced and trained, connected to local health authorities, and able to support their workforce. Factory community engagement strategies, staff, and resources can also be connected to disaster mitigation efforts and planning. Connection of broader supply chains to Sustainable Development Goal (SDG) targets, climate action plans, and resilience efforts will help to build resilience valuable to the supplier, the community, the workers, and the supply chain itself.
• Reprice risk in your supply chain. COVID-19 uncovers many of the hidden challenges of lowest-cost sourcing models. Unpriced risk may be embedded in the model and COVID-19 is illuminating these risks—from supplier financial resilience, workforce and community resilience, and component traceability and availability to preparedness for the next, inevitable challenge.  Understanding pricing and integrating these risks into your supply chain models is important to enabling longer term resilience.
• Break the boundaries and innovate to meet the future. The challenges we will face in the future, from climate change to pollution, a growing global population, and, in some places, aging societies, will require new thinking, innovation, and experiments. The efforts of today have obviously not succeeded at the level we need, and the imperative change is of ever greater importance.

BSR works with our member companies and their value chains via our global consulting practice and COVID-19 response. BSR’s HERproject directly connects via local partners to workers, particularly women in global value chains. In this decisive decade, we welcome the opportunity to meet the moment and the challenge of COVID-19 and build the future—and a more just and sustainable world.