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Blog | Wednesday August 31, 2022

The Inflation Reduction Act (IRA) Creates Powerful Tailwinds for Net Zero Companies

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The Inflation Reduction Act (IRA) is historic legislation, projected to reduce US climate pollution by roughly 40 percent by 2030 compared with 2005, and it will enable investment and innovation en route to the current US Paris Agreement target.

Unleashing US$369 billion in climate and clean energy incentives, the legislation provides powerful tailwinds for companies already on a science-based trajectory toward net zero, and it removes excuses for those waiting for policy certainty before setting up their own net-zero goals. Through provisions on methane, environmental justice, and new technologies, the IRA also signals the future of corporate climate action.

All companies validate their net-zero and science-based climate goals without full certainty on how they will implement them. The IRA gives businesses more of the policy certainty that they need to make good on these goals. This ambitious legislation establishes:

• New tailwinds to reduce scope 1 emissions (in company operations), including a US$10 billion investment tax credit to build clean technology manufacturing facilities and US$6 billion for a new Advanced Industrial Facilities Deployment Program to tackle the hardest-to-abate industries like chemical, steel and cement plants. A tax credit will incentivize carbon capture in these industries beyond 2030.
• New tailwinds to reduce scope 2 emissions (e.g., procured electricity and heat), including long-term, full-value tax credits for the production of renewable electricity (e.g., solar, geothermal, wind, combined heat and power, waste energy recovery) through to 2025, converting to technology-neutral tax credits for electricity generation facilities placed in service in 2025 or later. Another 10-year tax credit applies to energy storage technologies. Grants will facilitate siting of interstate electricity and transmission lines. As a result, clean electricity is projected to be roughly three-quarters of US generation by 2030.
• New tailwinds to reduce scope 3 emissions, including tax credits for electric vehicle (EV) charging and the purchase of new and used light-duty EVs, and for commercial clean vehicles. US$1 billion goes to grants or rebates for zero-emission heavy-duty vehicles, and credits support the production of biodiesel, renewable diesel, sustainable aviation fuels, and other clean fuels. These will substantially reduce companies’ emissions in transportation and distribution (categories 4 and 9).
  • For food, beverage, and agriculture companies with substantial upstream footprints, US$20 billion goes to reducing methane from livestock, improving soil carbon and climate-smart agriculture, which will reduce scope 3 emissions from purchased goods and services (category 1).
  • To help resolve a pain point for most corporate practitioners, US$5 million enables the EPA to support standardization and transparency of corporate climate action commitments and plans.

The IRA also bolsters US efforts at climate diplomacy by undergirding its new Paris Agreement target of 50-52 percent reductions by 2030. Additional federal regulatory and state-level action over the coming years can bring this target within reach. Companies concerned about their upstream scope 3 emissions outside of the US, e.g., in manufacturing centers in Asia, should cheer the possibility that a credible US target will result in an upward spiral of national ambition.

Finally, the IRA signals the future of corporate climate action by establishing incentives around emerging issues and technologies.

• A methane emissions reduction program provides grants for methane monitoring and fees for methane emitters in the oil and gas industry starting at US$900/tonne in 2024. Immediate methane reductions are key to limiting warming in the short term and clearing a path for a longer-term energy transition needed to meet the Paris Agreement’s goals.
• Environmental justice provisions will target clean energy and emissions reductions toward low-income and disadvantaged communities. We at BSR are working to bring climate justice, long established in academia and in the development community, into the mainstream of corporate sustainability.
• Tax credits will reduce the green premium on new technologies like hydrogen and direct air capture, laying the groundwork for continued emissions reductions in later decades toward net zero and for the removals that will be necessary in net-zero target years.

The IRA is projected to reduce household energy bills and generate millions of jobs at a time of energy-driven inflation and potential economic recession. That said, we should not overlook the powerful tailwinds it gives sustainability professionals working to build net-zero value chains and how it leaves no excuses for companies yet to take science-based action.

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Kayo Yamasaki

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As Office Coordinator, Kayo provides administrative support and cooperates with internal departments and external parties to ensure the smooth running of our Tokyo office. She undertakes several office tasks, including providing human resources, accounting processes, event coordination, and IT support. She also provides the necessary assistance for the start of projects.

Prior to joining BSR, Kayo worked as a project assistant at an international development consultancy supporting the overseas business development of Japanese small- and medium-sized enterprises. Before this, Kayo worked as a research assistant at the climate change group of a research consultancy. She also has expertise as a financial planner CFP at an accounting firm for seven years.

Kayo holds a BA in Law and finished two years of a Mandarin language program at East China Normal University in Shanghai.

Blog | Tuesday August 30, 2022

Best Practices for Human Rights Due Diligence in Tech Sales Channels

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Many of the human rights risks for hardware and software companies are related to the misuse of their products and services in ways that are connected to adverse human rights impacts. This includes, for example, the use of technology by a government entity to surveil political opponents, shut down internet access, facilitate censorship, or enable other human rights violations.

Technology vendor companies often rely heavily on sales partners—third parties who buy, distribute, integrate, and resell products and services to customers around the world. This means vendors often lack full insight into or control over who their products and services are sold to and how they are ultimately used.

The UN Guiding Principles on Business and Human Rights (UNGPs) require all companies to respect human rights and implement human rights due diligence processes to identify and address actual and potential human rights impacts across the entire value chain—including those related to the sale and use of products and services. Therefore, to fulfill their commitments to implementing the UNGPs, vendors need their sales partners to also address end-use human rights risks.

Considering this challenge, Hewlett Packard Enterprise (HPE) funded BSR to develop a brief outlining guidance and best practices related to the human rights expectations of sales channels in the technology sector. The brief explores the current state of human rights due diligence across sales channels and challenges to effective due diligence, and it enumerates best practices for all entities, from vendors to distributors to resellers.

It comes in the context of expanding scrutiny from the business and human rights field, as well as regulators on the human rights impacts of the downstream sale and use of products and services. Whereas human rights risks in supply chains, or upstream impacts, have received significant scrutiny over the past three decades, stakeholders are increasingly demanding that companies address adverse human rights impacts across their entire value chains. BSR’s primer on human rights due diligence of products and services outlines this development and provides guidance for companies across all industries on getting started.

Although this brief is relevant for companies across all industries who utilize sales partners, it is primarily geared toward technology companies in the hardware and software industry who develop and sell products and services for enterprise and government customers. Increased media coverage and external stakeholder focus on the misuse of technology products and services have put pressure on hardware and software companies to better address the human rights risks associated with the sale and use of their products and services.

BSR notes that developing effective human rights due diligence processes in tech sector sales channels will take time and coordination across the industry. This brief is intended to provide guidance and best practices to assist companies in this journey.

Primers | Tuesday August 23, 2022

Human Rights Priorities for the Beauty and Personal Care Sector

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Human rights are inherent to all human beings. They are defined and established in more than 80 international legal instruments and define the fundamental protections of human dignity, needs, and freedoms, such as food, housing, privacy, personal security, and democratic participation. Since the adoption of the Universal Declaration of Human Rights (UDHR) in 1948, the responsibility to protect human rights has primarily fallen on governments. Beginning in the early 2000s, however, it became increasingly clear that the freedoms enshrined in the framework could also be violated—and promoted—by the private sector. In 2011, the UN Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights (UNGPs), the first international instrument to assign companies the responsibility to respect human rights.

The Guiding Principles state that companies must refrain from negatively impacting rights even when governments are failing to create or enforce necessary laws; and that victims of corporate abuses must have access to effective remedy.

As part of this responsibility, the Guiding Principles require companies to actively identify and manage the negative human rights impacts that they may cause directly, and those to which they contribute through their business practices and relationships. There are several key actions a company can take as part of this due diligence cycle: conduct a human rights assessment to determine which potential human rights impacts are most salient to their business; develop and publish a human rights policy to clearly communicate expectations to stakeholders and business partners; ensure they have robust stakeholder engagement processes in place to support ongoing monitoring of potential or actual impacts and proactive action or remedy.

This issue brief identifies the most relevant, urgent, and probable human rights impacts for businesses operating in the beauty and personal care sector. The information here is gathered from BSR’s direct engagement with beauty and personal care sector companies, as well as our 30 years of experience helping companies in all sectors manage their human rights risks.

The beauty and personal care sector comprises a wide range of businesses and activities, from manufacturing, retailing, and distribution to marketing and advertising of beauty and cosmetic products (such as makeup, fragrances, skincare, haircare, and toiletries). The sector is spread across a wide range of different businesses including specialty stores, pharmacies, and supermarkets, among others. While each of these different business activities will have its own human rights profile and challenges, this brief highlights universal risks for companies operating in the beauty and personal care sector.

Primers | Tuesday August 23, 2022

10 Human Rights Priorities for the Food, Beverage, and Agriculture Sector

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Human rights are inherent to all human beings. They are defined and established in more than 80 international legal instruments and define the fundamental protections of human dignity, needs, and freedoms, such as food, housing, privacy, personal security, and democratic participation. Since the adoption of the Universal Declaration of Human Rights (UDHR) in 1948, the responsibility to protect human rights has primarily fallen on governments. Beginning in the early 2000s, however, it became increasingly clear that the freedoms enshrined in the framework could also be violated—and promoted—by the private sector.

In 2011, the UN Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights (UNGPs), the first international instrument to assign companies the responsibility to respect human rights.

The Guiding Principles state that companies must refrain from negatively impacting rights even when governments are failing to create or enforce necessary laws and that those victims of corporate abuses must have access to effective remedy.

As part of this responsibility, the Guiding Principles require companies to actively identify and manage the negative human rights impacts that they may cause directly and those to which they contribute through their business practices and relationships. There are several key actions a company can take as part of this due diligence cycle: conduct a human rights assessment to determine which potential human rights impacts are most salient to their business, develop and publish a human rights policy to communicate expectations to stakeholders and business partners, ensure they have robust stakeholder engagement processes in place to support ongoing monitoring of potential or actual impacts and proactive action or remedy.

This issue brief identifies the 10 most relevant, urgent, and probable human rights impacts for businesses operating in the food, beverage, and agriculture (FBA) sector. The information here is gathered from BSR’s direct engagement with FBA companies, as well as our 30 years of experience helping companies in all sectors manage their human rights risks. This sector spans all aspects of the global food system, from agriculture to transport, packaging, and retail. It nourishes the world’s population and connects economies in an expansive global value chain.

Yet, as with all complex industries and supply chains, the FBA sector has adverse impacts on people and the environment across the value chain—from farm level to retail and everything in between. While global food systems proved to be resilient during the COVID-19 pandemic, the economic effects exacerbated inequalities and acute food insecurity for the most vulnerable, demonstrating the structural nature of some of these adverse impacts.¹

The FBA supply chain is also responsible for 21–37 percent of GHG emissions every year, which means the sector is a key contributor to climate change.² As the world’s population is expected to grow to 10 billion by 2050, the demand for food will intensify, which may further strain the global food system and exacerbate existing inequalities, human rights risks, and environmental degradation. Understanding the human rights risks and impacts across this complex and necessary system will help those companies within the various industries that make up the FBA sector begin to unpack what contributions they can make to mitigating the negative impacts and seizing on opportunities to advance human rights for all.

Primers | Thursday August 18, 2022

10 Human Rights Priorities for the Luxury Sector

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Human rights are inherent to all human beings. They are defined and established in more than 80 international legal instruments and define the fundamental protections of human dignity, needs, and freedoms, such as food, housing, privacy, personal security, and democratic participation. Since the adoption of the Universal Declaration of Human Rights (UDHR) in 1948, the responsibility to protect human rights has primarily fallen on governments. Beginning in the early 2000s, however, it became increasingly clear that the freedoms enshrined in the framework could also be violated—and promoted—by the private sector. In 2011, the UN Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights (UNGPs), the first international instrument to assign companies the responsibility to respect human rights.

The Guiding Principles state that companies must refrain from negatively impacting rights even when governments are failing to create or enforce necessary laws and that those victims of corporate abuses must have access to an effective remedy.

As part of this responsibility, the Guiding Principles require companies to actively identify and manage the negative human rights impacts that they may cause directly and those to which they contribute through their business practices and relationships. There are several key actions a company can take as part of this due diligence cycle: conduct a human rights assessment to determine which potential human rights impacts are most salient to their business, develop and publish a human rights policy to communicate expectations to stakeholders and business partners, ensure they have robust stakeholder engagement processes in place to support ongoing monitoring of potential or actual impacts and proactive action or remedy.

This issue brief identifies the 10 most relevant, urgent, and probable human rights impacts for businesses operating in the luxury sector. The information here is gathered from BSR’s direct engagement with luxury sector companies, as well as our 30 years of experience helping companies in all sectors manage their human rights risks.

The luxury sector comprises a wide range of businesses and activities, from manufacturing, including raw material production and processing, retailing, and distribution, to marketing and advertising of luxury goods. These include jewelry and watches, apparel, accessories, and eyewear.

While each of these different business activities will have its own human rights profile and challenges, this brief highlights universal risks for companies operating in the luxury sector. This spans the design and concept stage, sourcing and mining of raw materials ranging from cotton to exotic animal skins to gemstones, processing and manufacturing, packaging, and retailing, and disposal and destruction of unsold inventory, encompassing all the workers and local communities involved.

Blog | Wednesday August 17, 2022

Inside BSR: Q&A with Ellinor Haggebrink

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Tell us a bit about your background. Where are you from, and where are you based? What is your favorite hobby?

Born and raised in Sweden, I currently share my time between Copenhagen and Berlin. An increasingly flexible job culture that facilitates dynamic lifestyles has been one upside of the pandemic! Although an unusual set-up, it is not that surprising as traveling has always been my biggest hobby. Since childhood, I have constantly enjoyed exploring new places, which has given me some great experiences around the globe, such as milking cows on a kibbutz in Israel, working as a barista in Dublin, and waitressing on a beach in the Dominican Republic.

This has become less frequent in the past few years due to the pandemic, and in lockdowns, I had to find alternative solutions to keep the travel bug at bay. I started to “travel” via cuisine, by cooking foods from different parts of the world—a perfect combination with another hobby of mine!

How did you first get involved in sustainable business? How long have you been at BSR? What is your current role, and what does that entail?

Backpacking across five continents has opened my eyes to structural inequalities around the globe. Having said that, it has always been important for me to have a job that contributes to societal change. When it was time to (temporarily) put down the backpack, I decided to tie these dots together through a degree in Political Science at Lund University, Sweden.

I joined BSR in February as manager of ESG investing in the Financial Services team. Previously, I worked in the responsible investment industry, advising institutional investors on how to incorporate environmental, social, and governance (ESG) factors into investment decisions. Engaging investee companies to improve their management of the most material ESG risks is also what drew me to BSR—an opportunity to create impact by working directly with member companies.

My role at BSR is a new position due to an increased demand for knowledge around ESG, not only from investors but just as much from issuers. I work together with our financial services members to incorporate ESG and responsible investment priorities into strategy and reporting, and I support non-financial members on how to enhance sustainability by applying the investor perspective.

What are some interesting projects that you get to work on as part of your role at BSR? What do you enjoy about them?

I provide ongoing support to private equity firms on integrating ESG considerations into the investment process, including guiding members through the landscape of financial instruments for corporate impact and providing insights on how ESG can be tied to executive compensation. The financial sector plays a crucial role in the world’s economy and has substantial leverage over all other industries and business activities. I’m proud to contribute to steering investments toward alignment with the SDGs and other sustainability frameworks in my daily work.

One thing that has taken up some of my time since joining is educating non-financial members on the relevance of ESG ratings and how these are used by investors. I feel inspired when I can reach out to high-growth companies that are often early in their ESG journey and nudge them in the right direction.

What issues are you passionate about and why? How does your work with BSR reflect that?

I have always been passionate about justice, which is closely connected to sustainability in my book. Since I joined the responsible investment industry, the importance of ESG has been climbing higher up on the agenda, but we need to roll up our sleeves even more. Business can play a vital role here, and allocation of capital is a strong action.

At the same time, the last decade has seen many positive developments and increased awareness of ESG from both investors and investee companies. The fact that the field is now becoming increasingly regulated both in Europe and the US underlines the importance of the work we do.

Besides knowing from an early age that I wanted a job with an agenda that drives positive change, I have always been attracted by working in dynamic and diverse teams with colleagues from all over the world. BSR ticks both boxes: I’m grateful to have found a job that allows me to connect with an amazingly passionate, skilled, and international bunch of people to develop business and personal relationships within a strongly purpose-driven organization.

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Garrett Finn

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Garrett works with Members on their business transformation journey across the consumer products; food, beverage, and agriculture; healthcare, and travel and tourism industries. Garrett works closely with the materiality and strategy teams to support project delivery and implementation.

Garrett brings six years of work experience across various sectors, industries, and functions. He possesses project management, business development, and corporate strategy expertise in and for complex and matrixed organizations. He has worked across markets in North America and the EMEA region. 

Garrett holds a MSc in Development Studies with an emphasis in Development Economics from SOAS, University of London. Garrett also holds a BA in International Studies with an emphasis in International Development and Foreign Policy from American University. Garrett speaks English and French.

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Travis Osland

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Travis supports BSR member companies across various industries, focusing on sustainability management and climate change.

Prior to joining BSR, Travis was a Climate Corps Fellow with the City of San Rafael, where he helped the City advance its Zero Waste goals and develop a plan for creating a more sustainable, inclusive, and resilient local economy. Previously, he worked at the Center for Food Innovation and Entrepreneurship where he performed research funded by WWF in the areas of on-farm food loss and produce donation.

Travis holds a MS in the emerging field of Biomimicry from Arizona State University and a BS in Environmental Science from Santa Clara University.

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Sonia Teanio

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Sonia supports BSR’s work and member companies across different industries and areas of expertise, with a focus on sustainability management and financial services.

Prior to joining BSR, Sonia worked at the European Bank for Reconstruction and Development in London, where she focused on green finance and supported the integration of gender across its green investments and climate change agenda. Sonia also interned for the Office of the Executive Director at Europol in The Hague, where she assisted with the implementation of diversity and inclusion and stakeholder engagement initiatives.

Sonia holds a MA in Public Policy from King's College London and a BA in International Science, Development and Cooperation from the University of Turin. She speaks English, Spanish, Portuguese, and Italian.