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Blog | Thursday February 25, 2021

Working Together to End Gender-Based Violence at the Generation Equality Forum

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As the world grapples with the impacts of a global pandemic with women on the frontlines, the Generation Equality Forum (GEF) offers a once-in-a-generation opportunity for actors around the globe, including the private sector, to come together to build an ambitious agenda to empower women and girls. BSR, the B Team, and Women Win/Win-Win Strategies are working together to engage the private sector toward making meaningful commitments to promote gender equality at the Forum. We connected with BSR member Kering’s foundation to hear more about its role as a GEF Action Coalition Lead and what motivated it to take part in the Forum. 

Generation Equality Forum seeks to establish a roadmap for how to scale up and mobilize action to achieve gender equality within a generation. Why is it important for the private sector to support the Forum?

The Generation Equality Forum, which gathers a diverse set of players from around the world, is the perfect opportunity to mobilize the private sector to support accelerated progress towards gender equality.

We know that the private sector is directly affected by gender inequality, which can have a negative impact on a company’s growth and development. We also know that gender-based violence is a societal issue that impacts the professional sphere. Because of this, we strongly believe that companies have a responsibility to take action.

A One In Three Women network study done in 2019 found that 16 percent of women and 4 percent of men who responded had experienced domestic violence within the last 12 months. Over 50 percent said it had affected their work, while 24 percent needed to take time off. 37 percent of colleagues experiencing violence spoke to someone at work.

 It is absolutely key that survivors maintain their jobs and their financial autonomy. Domestic violence is a critical issue that needs to be taken on by the private sector, in order to support its staff and ensure a safe and supportive work environment for all.

A second area of action where the private sector can be impactful is through its expansive reach and influence. It can encourage its network—its own customers, supply chain, partners and more—to join together in order to achieve Sustainable Development Goal 5 and, more specifically, to end gender-based violence.

Why has the Kering Foundation decided to step up as a private sector leader on the Generation Equality Forum Action Coalition focused on gender-based violence?

It was a natural choice. As a Foundation, positioned between the private and nonprofit sectors, we take on a complementary role to governments and civil society. By identifying new initiatives that do not yet have financing from other funders or governments, we can test new approaches, support pilot programs, and then replicate these models throughout a specific country or even internationally. We have also seen how much we can achieve when we join forces with other committed players.

In 2018, the Foundation co-founded One In Three Women, the first European network of companies engaged against gender-based violence, with the FACE Foundation. We now work alongside the other network members—Korian, L’Oréal, Carrefour, BNP Paribas, SNCF, le Fonds de Solidarité OuiCare, Publicis, PwC France and Maghreb, and EPNAK—to share best practices and co-develop tools, including an e-learning course on domestic violence and its impact on the workplace.

Our ambition as a private sector leader in the Action Coalition on Gender-Based Violence is to share our experience and network, scale up our work, and mobilize a broader group of companies, organizations, and countries to join in this combat.

The Kering Foundation has been committed to promoting gender equality and addressing gender-based violence for many years. What drove the Foundation to focus on this topic?

Empowering women has always been deeply embedded in the Kering Group’s priorities.

In 2008, Chairman and CEO of Kering, François-Henri Pinault, founded the Kering Foundation to end violence against women after becoming aware of a staggering statistic: one in three women around the world is or will be a victim of abuse during her lifetime. It is a universal issue regardless of social class, culture, nationality, age.

60 percent of Kering employees and 80 percent of its customers are women. Mr. Pinault wanted the Group to focus on a cause where it could make a real difference. This commitment has developed into a strong strategy with key feminist partnerships at its center. The Foundation focuses on three axes of action: improving support to survivors, developing prevention programs with younger generations to put an end to the intergenerational cycle of violence, and finally, bringing other actors—particularly the corporate world—on board to take collective action, both externally and internally.

Our approach to our partnerships is centered around flexible funding to local nonprofit organizations, who have a deep understanding of the local context and needs.

What do you hope to see from the private sector to support the success of the Gender-based Violence (GBV) Action Coalition and the Forum itself?

The Generation Equality Forum marks the 25th (now 26th) anniversary of the Beijing Declaration and Platform for Action, for women’s rights and empowerment. More than 25 years later, we need to define and develop new actions and approaches to respond to an ever-changing context and new challenges.

This Action Coalition—and the Forum itself—is the opportunity to bring together corporate groups, with different experiences and expertise to make effective and truly transformative change. As part of the GBV Coalition, we are working to develop a well-defined roadmap, accompanying tools, and global indicators. We would like to see the private sector join the Coalition as members and make concrete commitments in order to effectively combat violence against women.

More specifically, the private sector needs to focus on prevention programs to address the root causes of violence: changing harmful gender norms, engaging with men and boys on masculinity, and paying particular attention to the intersection of violence against women and with violence against children, in particular incest. In addition, providing sufficient resources to tackle the challenges of supporting survivors remains essential.

Of course, it is absolutely crucial to concentrate on our own teams as well: by raising awareness and training employees, including senior executives.

We are looking forward to bold, ambitious commitments from this Forum that will lead to a large coalition of diverse players, including many private sector members, all signed on to take concrete steps to putting an end to violence against women.

Blog | Wednesday February 24, 2021

How Business Should Respond to the Coup in Myanmar

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The Myanmar military’s coup and escalating use of violence against peaceful protestors have left many foreign businesses operating in the country wondering what to do. The bottom line is this: respect human rights, not only by preventing and mitigating harm linked to business activity, but also by ensuring that business activity is not rewarding the leaders of the coup.

The challenge of respecting human rights while navigating business in Myanmar is significant: engagement with the new authorities risks conferring legitimacy on them and economically enabling their illegal seizure of power, while disengagement reduces leverage, hinders delivery of essential goods and services, and terminates needed jobs. Some businesses provide essential services—such as telecommunications, transport and logistics, and infrastructure providers—and may have a greater longer-term positive human rights impact by staying in the country. Other businesses may have limited ability to prevent and mitigate the human rights impacts that occur in their value chains or may be constrained by preexisting contractual obligations. How can business navigate these trade-offs and ensure respect for human rights?

Drawing on the UN Guiding Principles on Business and Human Rights (UNGPs), UN guidance for business in conflict situations, and BSR’s own experience working with businesses in Myanmar and advising companies on human rights due diligence in high-risk contexts, here are seven practical steps that businesses with a presence in Myanmar can take:

1. Prioritize staff safety and civil liberties.

Businesses with a presence in Myanmar should prioritize the safety, security, and mental well-being of their staff and support their human rights to freedom of expression, association, and political participation.

2. Be transparent in the short term, and document abuses for the long term.

Businesses should be as transparent as possible about their presence in Myanmar, their business relationships there, and their response to the coup. Businesses whose services have been interrupted should seek to inform their customers about the reasons why as well as the scope and length of the suspension of services. Some businesses and staff may be subject to coercion and victims of violence themselves; in these cases, businesses can document and collect information for future disclosure. Information collected by businesses now may be valuable evidence for use in potential criminal tribunals later.

3. Undertake rapid human rights due diligence on your business operations in Myanmar.

Businesses are not neutral actors in conflict situations. They have a responsibility to understand how their supply chains, direct operations, and the use of their products and services can influence local conflict dynamics. In the context of Myanmar, rapid human rights due diligence should look in particular at risks to staff safety and how business relationships and activities may impact on the political context—for example, by enabling or constraining freedom of expression and association or by directing payments either to or away from the military. Effective due diligence in Myanmar’s rapidly changing context will also require that businesses collaborate, share information, and engage in collective action with home governments, embassies, investment and trade associations, peer businesses, and (in a safe and secure manner) local civil society.

Businesses should use this information in the short term to prevent and mitigate any actual and potential human rights impacts in Myanmar, which they may cause or contribute to through their own business actions or to which they may be linked through their business relationships. They should also use this information to identify and utilize leverage to prevent the use of their products, services, and assets in atrocity crimes and other human rights abuses.

4. Take proactive steps to respect human rights.

Democracy and rule of law set the stage for the realization of human rights—as well as for a stable business environment—and companies should consider how they can proactively support this. In the immediate term, companies should consider making a statement voicing opposition to the coup and support for human rights, either alone or collectively (for example, by signing on to the statement organized by the Myanmar Centre for Responsible Business).

Companies should also determine how their business activity can support civil liberties and rule of law in the country and how they can support human rights defenders (including journalists, trade unionists, and their own protesting employees) through dialogue as well as funding, logistical, or communications support.

Collective action will be critical in the weeks to come, enabling joint advocacy to protect human rights and rule of law as well as information sharing with other business, government, and civil society stakeholders to identify corruption, military aliases, and hidden military beneficial ownership arrangements in business value chains. Companies’ home governments have a particularly important role to play in helping them to navigate human rights dilemmas so that they can fulfil their responsibility to respect human rights. This is in line with UNGP Principle 7, which stipulates that since “the risk of gross human rights abuses is heightened in conflict-affected areas, States should help ensure that business enterprises operating in those contexts are not involved with such abuses.”

Businesses should especially seek to maintain their operational-level grievance mechanisms, even if they pull out of the country. These grievance mechanisms may be essential tools for providing non-judicial access to remedy to Myanmar people during and after the coup, when the Myanmar judiciary may not be functioning correctly. These grievance mechanisms should be accessible to vulnerable groups and ethnic minorities. Companies may also be asked to cooperate in future criminal tribunals for atrocity crimes, as well as provide reparations where appropriate.

5. Support targeted economic sanctions.

Many international stakeholders are calling upon businesses in Myanmar to support targeted international sanctions to prompt the Myanmar military to step away from the coup. Several governments have already imposed or proposed new sanctions against the coup regime, including the U.S., the UK, Canada, and the EU. Foreign companies operating in Myanmar can help to shape effective sanctions by assessing the impact of those under consideration and providing inputs to inform foreign governments’ planning, with a focus on demonstrating the impact of targeted sanctions on the ability of companies to invest responsibly and recommendations for mitigating that impact.

6. Terminate all military business relationships and minimize government contact.

Many foreign companies operating in Myanmar have long since ended or avoided business relationships with the Myanmar military, including military-owned conglomerates Myanmar Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC) and their subsidiaries and business partners. This is in line with recommendations from the UN’s 2019 fact-finding mission report, which recognizes that companies should respect the standards of international humanitarian law and ensure that they do not aid and abet the Myanmar military by knowingly providing them financial, logistical, or any other practical assistance or encouragement. Other companies are still seeking to identify the often murky ties that they may have to military-affiliated individuals or organizations in their value chains. Many of these relationships are hidden by opaque beneficial ownership arrangements, corrupt business practices, and the use of aliases by both businesses and individuals. To avoid conferring legitimacy on the coup leaders, companies should minimize contact with government outside its role as a regulator.

7. Exit responsibly, if you are unable to stay.

Businesses that choose to leave Myanmar should do so in a way that respects human rights. This includes providing reasonable notice to all stakeholders, ensuring staff continue to receive income or support to mitigate loss of employment, and ensuring the security of staff who cannot be evacuated.

We are facing a quickly closing window of opportunity for business to signal the economic costs of the coup to its leaders and to take action in support of human rights. Complicit or not in the coup, all foreign businesses operating in the country have both the moral obligation and economic influence to take swift and powerful actions to respect and promote the protection of the human rights of the Myanmar people.

Blog | Tuesday February 23, 2021

Accelerating Progress for Gender Equality through the Generation Equality Forum

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“Human rights are women’s rights, and women’s rights are human rights,” Hillary Clinton boldly declared at the UN Fourth World Congress on Women. In 1995, this was a landmark statement.  

The same event would go on to produce the most ambitious and inclusive agenda for global women’s rights: the Beijing Declaration and Platform for Action.

Twenty-five years later, the world is grappling with a global pandemic that has deeply exacerbated gender inequality. At the same time, we have a once-in-a-generation opportunity to drive progress for gender equality: the Generation Equality Forum is a global gathering that will establish a roadmap for how to scale up and mobilize urgent action—in order to achieve gender equality within a generation.

BSR is partnering with the B Team and Women Win/Win-Win Strategies to engage the private sector—mobilizing both companies with established women’s empowerment programs and those looking to get involved in the movement—toward making meaningful commitments to promote gender equality through the Forum and across six key themes, or Action Coalitions:

• Gender-based violence
• Economic justice and rights
• Bodily autonomy and sexual and reproductive health and rights
• Feminist action for climate justice
• Technology and innovation for gender equality
• Feminist movements and leadership

The Forum is organized through a multi-stakeholder and multigenerational campaign, including the private sector, governments, foundations, and civil society organizations. Active participation of business leaders and the collective expertise of the private sector will be an essential component to the success of the Forum—and ultimately, our ability to achieve the goal of gender equality.

Women intersect with business throughout the value chain, providing multiple entry points to promote gender equality. The Forum offers an opportunity to leverage these entry points across the workplace, marketplace and community. Through collective action and partnerships with governments and civil society, business can help to catalyze meaningful change for women across value chains, industries, and regions.

Corporate action for gender equality is not new: more than 3,000 companies have signed on to the Women’s Empowerment Principles (WEPs). And many companies are taking steps specifically to address gender equality in their supply chain. For example, Kering partnered with BSR to review the workplace gender equality policies and practices of 189 suppliers and the perceptions and experiences of 880 workers in their Italian luxury supply chain. The research highlighted significant challenges for women workers and identified clear opportunities for the luxury sector to lead efforts toward more gender-inclusive supply chains in Italy.

We have seen mounting evidence that prioritizing gender equality creates strategic advantages for companies. Gender-diverse workforces help to attract talent, reduce turnover, and can contribute to building trust with clients and consumers. Companies with women in leadership outperform their competitors, with a McKinsey study finding a 55 percent increase in average company earnings before interest and tax. On a macro level, achieving gender equality could add upwards of US$12 trillion to the world’s economy. 

Despite the momentum from the Beijing commitments and the Sustainable Development Goals (where Goal 5 is Gender Equality), gender equality remains an elusive goal. The COVID-19 pandemic has greatly exacerbated social and economic inequalities, and it is estimated that it could wipe out 25 years of global progress toward gender equality.

At the same time, the current crisis has shed light on the essential role women play as leaders, caregivers, frontline workers, and activists. New research across 17 countries highlights the growing consensus on gender equality: 80 percent of respondents believe gender equality is an important cause to work toward, and 60 percent feel gender equality is essential to end poverty in all countries.

Now is the time to join this critical movement as Generation Equality Commitment Makers, encouraging your company to make a bold and transformative commitment to one or several Action Coalitions to define and drive catalytic change for gender equality. Companies like Kering, Microsoft, and PayPal have already joined as Action Coalition Leaders.

We invite all companies to join BSR, the B Team, and Women Win/Win-Win Strategies for a webinar on March 2, 2021 to explore the types of engagement opportunities that companies can expect at the Generation Equality Forum and why you should get involved.

Blog | Monday February 22, 2021

Inside BSR: Q&A with Francesca Manta

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Inside BSR is our monthly interview series highlighting BSR team members around the globe. This month, we connected with Francesca Manta, an Associate Director in our Copenhagen office, on everything from her childhood as a "lawyer of lost causes" to the variety of cities that she has lived and worked in to her experience of working remotely and raising preschoolers during the COVID-19 pandemic.

Tell us a bit about your background. Where are you from, where are you based, and how are you handling COVID-19 lockdowns and the remote work situation?  

I’m originally from a tiny, not very known region in the south of Italy, between the “toes and the heel” as I usually say. My current home however is Copenhagen, Denmark, where I have been for about 13 years now.  

Before settling in Denmark, I lived in a few different places: Rome, where I studied Political Science and International Relations; Uppsala, Sweden, for my exchange year; Washington, D.C., for project work at the International Law Institute; Nairobi, Kenya, working with microfinance; and Singapore, with my former employer Vestas.  

Copenhagen won the contest for best home base because of family reasons, but also because of great work opportunities and obviously, the fantastic weather.  

The pandemic has been a little earthquake of chaos. But I do believe we are creatures of habit, so I would say I have now settled into new routines and new confined spaces—sharing the home office with my husband and cat, doing a "fake" morning commute around the office, and spending a lot more time with our children.  

However, nothing can fill the big gap of not doing project work on the field, seeing colleagues daily, and visiting my family in Italy. 

What issues are you passionate about and why? Does your work at BSR reflect that? 

If you ask my mom, she would say that I was always the “lawyer of lost causes” when I was little: taking the side of the weakest, arguing impossible cases in the name of justice and fairness. I would say that passion is still there now: justice and equity, seen obviously from a sustainability angle.  

How can I contribute to making the world more equitable, especially for our children and grandchildren? How can I use my expertise to change the status quo and advance sustainability and human rights as business as usual, part of the new social contract? 

I feel so lucky I get to do exactly this at BSR every day, through our projects, member engagement, research and partnership with donors.  

Off-work passions are more mundane: I love knitting, doing creative projects, exponentially increased during lockdown, cooking, and baking. I am an avid reader and love rowing. 

How did you get into working on sustainable business? How long have you been at BSR? What is your current role and what does that entail? 

I thought I would become a diplomat, as international relations and politics had always been my passion. While writing my bachelor thesis, I started researching global supply chains in China and India and suddenly found a new love in sustainability—which was called corporate social responsibility (CSR) back then.  

Luckily, I could study a business master's degree focused on sustainability and development at Copenhagen Business School, which led me to my first work opportunity with the Danish Institute for Human Rights, where I specialized in human rights and business and later on, in broader sustainability issues at various companies.  

I have been at BSR almost two years, and I am part of the Human Rights team. Some of my work involves leading projects with members on implementing the UN Guiding Principles on Business and Human Rights and conducting human rights assessments of their operations and supply chains. I also work more broadly on gender, supply chain, and sustainability management issues across different industries.  

In addition, I support some of our Nordic and European members in advancing their sustainability work through BSR membership—something I particularly enjoy as I feel like I’m very much an extended part of their teams! 

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

Learning and impact are my favorite things about all the fantastic projects I get to work on at BSR. There is always a new topic, an unpredictable angle, a gnarly conundrum to solve—whether human rights, diversity, supplier management, or reporting. We also work very collaboratively yet independently across teams, joined by a particularly inspiring synergy which is reflected in the quality and integrity of projects.  

Some of my favorite projects have been doing field work on agricultural supply chains in Ethiopia and Egypt, developing global harassment policies and programs for some of our members, and taking an active role in the integration of gender and human rights, which even brought me to the United Nations to present BSR’s groundbreaking work on gender due diligence back in 2019. 

2020 was undoubtedly a difficult year. What were the things that brought you joy amid lockdowns/quarantines? What are you most looking forward to in 2021/when the pandemic is over? 

If I were to pick a word for 2020, that would be gratitude. It’s been a tough year no doubt—lockdown and working from home with preschoolers is no walk in the park, and being separated from colleagues, friends, and family has been straining mentally and physically.  

However, I continued to work and supported even more interesting projects, with 2020 being an incredibly impactful year at BSR.  

My family, near and far, felt never so close, and spending a lot of time with my young children made me appreciate these years much more than if I were caught in the hamster wheel of "normal" life.  

And lastly, I live in a beautiful and green city where we still enjoyed a lot of freedom despite the lockdowns. We could replenish the happiness tank with walks, the allowed take-away food, and biking along the now frozen Copenhagen lakes.  

What I am taking with me when this is over is resilience, patience, creativity, and appreciation of the simple joys of life. Crossing my fingers that very soon I can eat bad plane food, sit comfortably in crowded restaurants without wearing a mask, starfish on hotel beds after a long day on the ground, and laugh with friends and family again.  

Blog | Thursday February 18, 2021

Larry Fink Adds His Voice to the Call for Business Transformation

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Many investors and companies are reacting to the present enthusiasm for ESG investing with questions such as: “Which ESG KPIs should I report on? Which frameworks should I use? Does ESG investing create better returns?”

Larry Fink—Chair and CEO of BlackRock, the world’s largest asset manager—recently published his annual letters to CEOs and clients, providing valuable perspective on these questions. Many ESG and sustainability professionals are eagerly applying the guidance.  But it is vital to recognize that the letters go far beyond these proximate questions to deliver a clear message to the market: ESG KPIs aren’t enough—it’s time for investors and companies to lead with ambition, transformation, and action for a sustainable world.

BlackRock Continues to Prioritize ESG…

The Fink letters spotlight many important developments and trends on ESG:

• Sustainable investing is good investing. Fink highlights that in 2020 “81 percent of a globally-representative selection of sustainable indexes outperformed their parent benchmarks.”  He goes on to note that within industries, “companies with better ESG profiles are performing better than their peers, enjoying a ‘sustainability premium.’”
• ESG and climate are part of the firms’ fundamental approaches to investment management and risk management. BlackRock touts that in 2020 the firm integrated ESG considerations into 100 percent of its active and advisory strategies. BlackRock also launched Aladdin Climate to integrate assess environmental risks as part of its portfolio and risk management platform.
• Companies should report in alignment with global standards, especially TCFD and SASB. Fink notes that since his 2020 letter, the field has seen “a 363 percent increase in SASB disclosures and more than 1,700 organizations expressing support for the TCFD.” Fink also expresses strong support for a consolidated global standard, exhorting companies to report against SASB and TCFD until such a standard is determined.
• Climate, racial justice, and economic inequality are top priorities—along with the intersection of those issues. BlackRock emphasizes climate action, transparency, and the relevance of “net zero” targets. The firm additionally emphasized the relationship among these topics, with climate change “already having a disproportionate impact on low-income communities around the world.”

It’s also essential to note that BlackRock isn’t alone in calling for such advancements on ESG. For example, in January State Street Global Advisors CEO Cyrus Taraporevala published his annual missive to Boards with a similar emphasis on ESG. Together the two firms manage more than US$12 trillion in assets. A vast set of asset managers have also committed to support SASB, TCFD, and other initiatives.

…and Calls for Business Transformation

Beyond the ESG topics of the day, Fink’s letter pushes the conversation about sustainability and ESG investing to address the broad societal and environmental challenges facing the world.

On climate, his letter specifically emphasizes BlackRock’s requests for “companies to disclose a plan for how their business model will be compatible with a net zero economy” and “to disclose how this plan is incorporated into your long-term strategy and reviewed by your board of directors.”

And on stakeholder engagement, Fink warns:

Companies ignore stakeholders at their peril—companies that do not earn this trust will find it harder and harder to attract customers and talent, especially as young people increasingly expect companies to reflect their values. The more your company can show its purpose in delivering value to its customers, its employees, and its communities, the better able you will be to compete and deliver long-term, durable profits for shareholders.

These comments illustrate the imperative to respond to a changing world, to drive transformation, and to think big. Just adding a few ESG metrics and bumping your ESG scores will not be enough. 

ESG Shareholder Capitalism is Not Stakeholder Capitalism

Humanity presently faces a staggering set of challenges. In response, we at BSR see many investors and corporations developing ESG strategies that focus on ESG policies, gathering and reporting ESG KPIs, and initiating targeted ESG programs. These efforts constitute important progress, and we are proud to work with many members and stakeholders on such initiatives. 

At the same time, we must be clear about what lies ahead: taking the same old system and adding a few ESG KPIs is not a meaningful solution to global challenges, investor objectives, or corporate imperatives. Incrementalism won’t be enough.

Put another way, as we seek to make the transition from “shareholder capitalism” to “stakeholder capitalism,” we must ensure we don’t get stuck at “ESG shareholder capitalism”—a system that perpetuates the catastrophe of short-termism, social harms, and environmental degradation, but with better scores on ESG ratings.

Recognizing this imperative—and the insights from BlackRock and State Street—is why BSR continues to build on its nearly thirty-year history on the vanguard of sustainability with efforts centered on initiatives such as futures thinking and scenario analysis; business resilience; climate transformation; diversity, equity, and inclusion; stakeholder engagement; human rights impacts; and sustainability reporting and transparency. We’ve seen how important it is for companies to:

• Develop resilient business strategies that consider a broad range of stakeholders and impacts—not just the interests of short-term investors
• Make strong ESG ratings performance the outcome of a sustainability strategy—not the driver of it
• Set ambitious targets and marshal the organization to achieve them
• Use scenarios to imagine, prepare for, and influence the future of business
• Collaborate with peers, stakeholders, and policymakers to support shared solutions and aligned incentives
• Speak out and demonstrate leadership, knowing that those who are silent face scrutiny, and those who fail to back up their words face reproach

Transformation happens quickly. Around 15 years ago, the iPhone didn’t exist, financial markets were in a frenzy for mortgage-backed securities, oil prices were more than 30 percent higher than today, and the U.S. was on a 50-year streak of shopping mall construction. A lot has changed, and business has had to transform in response. We should not dismiss the astonishing swiftness and power of global transition.

The coming years will bring such transition as the world grapples with fundamental social and environmental disruption. Companies and their leaders need to articulate ambitious transformation plans to navigate and participate in the push from “shareholder capitalism,” past “ESG shareholder capitalism,” and toward a just, sustainable, and thriving world. 

To all corporate leaders: your stakeholders are waiting to hear your plans and—as BlackRock just made clear—your investors are, too.

Blog | Wednesday February 17, 2021

To Combat Systemic Discrimination, Companies Need to Acknowledge Their Role

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Included in the Biden-Harris administration’s flurry of activities in its first two weeks in office was a series of executive actions focused on addressing the U.S. federal government’s role in perpetuating systemic racism. The actions aim to address federal use of private prisons and racism in federal housing policies, affirm the federal government’s commitment to tribal sovereignty and consultation with Indigenous communities, and combat xenophobia against Asian Americans and Pacific Islanders.

While such actions—and the administration’s acknowledgement of historic systemic racism and discrimination—are certainly a step in the right direction, government is just one actor. The private sector, academia, civil society, and culture and society at large have all contributed to the entrenchment of systemic discrimination and therefore must play a role in its undoing.

So how can companies play a role in tackling the same challenges identified and acknowledged by the Biden-Harris administration?

As a first step, companies must identify how individuals and communities may be denied equal opportunities both up and down their value chain. The following are but a small sampling of ways that the private sector’s operations or products and services have furthered structural racism or structural oppression:

Corporate Advertising

Generations of discriminatory depictions have strengthened (or created new) stereotypes within societies, affecting any number of vulnerable groups: Black, Indigenous, and Other People of Color (BIPOC), women, religious communities, persons with disabilities, etc. A recent survey of 3,500 advertisements across 56 countries between 2019-2020 found that only 7 percent of women and 9 percent of men were shown in non-traditional, un-stereotyped gender roles, and only 22 percent of ads surveyed featured a mixture of ethnic origins or skin color.

An example countering this trend is that of P&G’s “We See Equal” advertising campaign, which sought to undo entrenched stereotypes about traditional gender roles and included several companies rebranding. Other examples include actions from Mars and PepsiCo, as well as some professional sports teams, which involved updating brand logos based on racist stereotypes.

Lending

Discrimination by institutional lenders has resulted in unequal access to financing for housing, education, transportation, and more, exacerbated by the marketing of more expensive lending products to vulnerable groups.

Netflix is using its influence to address this disparity by moving up to US$100 million of its cash holdings to financial institutions that focus on Black communities—a move that first recognizes the problem at hand and then seeks to use the company’s leverage to influence change.

Corporate Hiring

Significant research indicates that despite the prevalence of Diversity, Equity, and Inclusion (DEI) programs, little has changed in terms of discrimination rates in corporate hiring, retention, and promotion practices. In the U.S. for example, a study by the Harvard Business Review found that hiring discrimination against Black Americans has not declined in 25 years despite the prevalence of corporate initiatives to tackle this problem, with similar patterns identified in Europe and elsewhere.

Tech-Based Products and Services

Algorithmic decision-making across all facets of society has exacerbated inequalities and prejudices, from facial recognition software performing poorly with Black and female faces, to lending software discriminating against Black mortgage applicants, to automated court sentencing software that carries an implicit bias against Black defendants.

However, tech platforms can also serve as vehicles for change. Microsoft, in partnership with the Urban Institute, is working to advance data-driven transparency and accountability concerning the impact of prosecutorial discretion on communities of color, potentially providing the evidence needed to identify how the U.S. justice system disproportionately targets them.

Corporate Lobbying and Tax Policy

It is well known that many companies use their influence to support politicians whose voting and policy records demonstrate a commitment to maintaining the status quo. Others take efforts to reduce their tax burdens, which ultimately pulls money out of the communities that need it most, namely those historically impacted by structural oppression.

While many companies temporarily halted political spending as a result of the insurrection at the U.S. Capitol in January 2021, adopting an “ESG lens” across all political and lobbying engagements going forward is one way companies can create consistency between their DEI targets and their lobbying activities.

Without first understanding how a company’s entire operations and value chain may exacerbate inequity and entrenched disparities, companies will not be able to tackle these challenges. There are many approaches to identify and assess such impacts, including conducting human rights impact assessments with a specific lens on the impacts of systemic racism and oppression.

Once identified, companies must act, enable, and influence to address the negative impacts: through principles, policies, and approaches embedded into all aspects of the business; through procurement product development, and partnerships; through corporate lobbying and pushing policy debates, and everything in between.

This is a long and difficult journey, one which will not be successful without regular rightsholder engagement; clear, accurate, and up-to-date data; proper resourcing; and a strong commitment from the top.

The Biden-Harris administration’s executive orders are a tremendous step in the right direction, but tackling systemic racism and oppression is a collective effort. Without the commitment and effort of the private sector, progress will be slow and incomplete.

Blog | Wednesday February 10, 2021

Women’s Empowerment in the Era of Social Distancing

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Approximately 190 million women are employed in global supply chains, yet many are in precarious positions. Low literacy and tech literacy levels, among other factors, relegate women to lower paying jobs with minimal rights protections, making them particularly vulnerable. Since 2007, BSR collaborative initiative HERproject has sought to change this and empower women workers through workplace-based interventions on health, financial inclusion, and gender equality.

Over the years, HERproject has worked in more than 620 workplaces across 14 countries. And yet in 2020—as COVID-19 and its economic impacts have exacerbated gender inequalities—health and safety precautions prevented HERproject programs from continuing in the farms and factories where they have traditionally taken place.

Against this backdrop, we developed HERessentials—a new HERproject program leveraging digital tools to reach workers, particularly women, to build their adaptive capacity and resilience in the face of crisis. HERessentials engages workers in a safe and socially distant way and provides workers and managers access to trainings and important resources on stress management, communication, health, and finance topics through a tablet. Furthermore, it is designed to increase workers’ digital and tech literacy while also heightening resilience in an increasingly technological world of work. The offering puts technology in the hands of low-income women with low tech skills all while empowering suppliers to take ownership of worker trainings on essential topics. 

HERessentials is incorporated in workplaces via content downloaded onto tablets, ensuring access and collecting data offline, and workplace management is supported by local HERproject implementing partners to ensure sustainable ownership of the program.

Although HERessentials started as a response to the COVID-19 crisis and recovery in supply chains, it will have longevity. The content aims to provide workers with valuable trainings that, while important before, have become much more pressing given the COVID-19 crisis.

“I have financial issues because my salary can hardly sustain the family. My husband lost his job due to COVID-19, and this has affected the family both financially and emotionally. There have been increased arguments in the family.”

- Female Worker, Kenya

COVID-19’s Consequences for Women in Global Value Chains

The COVID-19-fueled economic crisis has made vulnerable women workers even more exposed to job insecurity and diminished protections of worker rights.

The consequences of this have been manifold: Workers have been facing increased reliance on credit, notable upticks in violence at home and at the workplace, and reduced health-seeking tendencies due to concerns around COVID-19. Such challenges are formidable and can seem especially difficult to tackle in times of social distancing and restrictions on movement that reduce access to local services and support.

At the onset of the crisis, factories halted production for long periods, and when they were finally able to reopen, they did so with limited capacity given budget cuts and adaptations for social distancing.  HERproject recently published a report illustrating that these impacts are occurring in real time. For example, it was reported that in Bangladesh, women taking loans increased by 15 percent, while the percentage of men who borrowed nearly doubled in order to make ends meet. Furthermore, in Kenya, 54 percent of female and 49 percent of male respondents reported noticing an increase of violence against women around them.

Closing the Digital Gender Gap

In light of these issues, empowering women workers through information dissemination and capacity building is crucial. In a time where in-person engagement is limited, digital tools like HERessentials can be leveraged to strengthen workplace support for workers as well as develop women workers’ resilience.

A gender divide currently exists in digital literacy and access. However, closing the digital gender gap has the potential to reduce inequalities, empower women, and shore up their skills. By increasing workers’ skills and versatility in the workforce, in addition to providing access to key information, digital tools like those used in HERessentials have the potential to strengthen women’s awareness and capacity.

Digital tools are not the panacea to women workers’ vulnerabilities in global supply chains, but they can have an impact on empowering women with information and skills to strengthen their resilience especially in times where traditional in-person methods are restricted. COVID-19 was the catalyst for the creation of HERessentials, but its design has been centered around a long-term view of sustainability and capacity building.

Digital Learning for a More Just, Sustainable Future

We recently began implementing HERessentials in garment factories in Bangladesh, and in the coming months, we will adapt and roll out the program in India, Pakistan, Costa Rica, and Honduras, with a view to future expansion in Myanmar, Cambodia, Kenya, and Ethiopia. While there is much more learning to do on how to make digital learning as effective and impactful as possible, this is a positive step toward putting tools and resources in the hands of women workers.

HERproject looks forward to continuing to work with global brands, their suppliers, and local NGOs to bring vital empowerment programs to women across the globe. To learn more about our work, please reach out to connect with our team.

Blog | Tuesday February 9, 2021

Why Companies Should Assess Double Materiality

Preview

This is the first post in a four-part series on materiality.

After years of debate over the definition of materiality, 2020 has brought a consensus that materiality is double—meaning that businesses should report on financially material topics that influence enterprise value as well as topics material to the economy, environment, and people.

The new definitions of the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and the two papers published by the five reporting standard organizations helpfully clarify reporting standards’ different perspectives on the question “material to whom,” enabling greater interoperability between them:

• On the one hand, a company identifies and assesses those sustainability issues that influence enterprise value. We can also call this "financial materiality" or "impacts inwards." This is covered by the SASB definition of materiality. The main audience for this information is investors, lenders, or other creditors.
• On the other hand, a company identifies and assesses impacts on the economy, environment, and people. This refers to "environmental and social materiality" or "impacts outwards." This is covered by the GRI definition of materiality. The main audience is a broad set of stakeholders, including governments, consumers, business partners, responsible investors, employees, civil society organizations, local communities, and vulnerable groups.

Take the topic of climate change. A business will want to understand how physical and transition risks may impact its enterprise value. Severe weather events may affect the company’s manufacturing sites or supply chain security, or climate regulation may mean that some of its products and services are no longer relevant. On the other hand, the company emits carbon emissions that impact the environment and people’s livelihoods.

Double materiality is also applicable to an issue like diversity, equity, and inclusion. In a talent-tight market, a company’s ability to attract a diverse workforce may improve its pool of talent and workforce productivity and influence its enterprise value. If a company has discriminatory practices, this may result in lawsuits or change of leadership, which could in turn negatively impact enterprise value. On the other hand, discriminatory practices constitute an infringement on civil and human rights.

However, some topics may constitute significant impacts outward without affecting enterprise value (top left quadrant of the matrix). Take the presence of conflict minerals in electronics companies’ supply chains. Minerals extracted in conflict zones are sold to perpetuate conflicts, affecting communities’ human rights and livelihoods. On the other hand, conflict minerals has not proven to negatively impact enterprise value. 

Looking at the bottom-right quadrant, customer satisfaction will likely affect enterprise value. However, it might not constitute a significant impact on people, the environment, or human rights.

For the purposes of reporting, a business should engage its investors on topics that affect enterprise value (in the two right quadrants). The business will report to a wider range of stakeholders, such as consumers, business partners, and local communities, on significant impacts to the economy, the environment, and people (in the two top quadrants).

So, why should companies apply this concept of double materiality?

We hear from our members that despite having completed a materiality assessment, they still get questions from stakeholders about other issues that may not be material to their business. We hear that some topics like modern slavery get Board time and attention, even if this topic may not be material to the company. We hear that executives get tired of hearing that all sustainability issues are material topics, when actually they are not.

By applying the concept of double materiality, a company will be able to clearly distinguish between inward and outward impacts.

• A company should report on all its significant impacts outwards, regardless of whether they are material to the business. Applying the concept of double materiality will help answer stakeholder pressures for greater corporate transparency.
• The sustainability field has at times overestimated the impact of sustainability topics on the business. In our view, this can impede on the sustainability team’s ability to convey true priorities. By identifying those issues that are financially material, a sustainability team will be able to advance priorities that are truly a business concern.
• Understanding the link between inward and outward impacts of an issue will help the company build an adequate management plan, as well as report on these topics in a meaningful way to different stakeholders. When drawing a plan to manage an impact, e.g. labor rights in the supply chain, a business will be able to inform the plan with an understanding of whether this is a true risk for the business or whether this is part of the company’s responsibility to mitigate an impact on people.

As businesses are looking to refresh their materiality assessment, applying the lens of double materiality will help enhance the value of the assessment for reporting and strategy. We will continue to explore how to enhance the value of materiality assessments in this blog series. We are interested in hearing your thoughts and continuing the conversation about double materiality with our members. Contact us!

Blog | Tuesday February 9, 2021

Double and Dynamic: How to Enhance the Value of Your Materiality Assessment

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Progress on harmonizing sustainability reporting standards and definitions hit the accelerator in 2020. After 20 years of discussions and evolving perspectives on what materiality means, who is it for, or whether the sustainability field should even be using the term “materiality,” we see a consensus emerging. 

At BSR, we welcome this consensus. Frankly, after years of debate in our field, this clarity is refreshing!

A materiality assessment is often considered the cornerstone of a company’s sustainability efforts. If done well, a materiality assessment helps a company focus its sustainability strategies on the areas and topics that will have the most impact. It allows a company to understand stakeholder priorities and deliver decision-useful sustainability reporting to its stakeholders. It enables sustainability teams to build a shared understanding by relevant functions and business leaders on sustainability priorities.​

However, in our experience, materiality assessments can fall short of delivering these key benefits. The process is often not well understood by business leaders and is disconnected from other business processes, such as strategic planning or risk management. It is often viewed as a check-the-box and low-value exercise. The methodology is often seen as more art than science. The results are often dependent on which stakeholders you engage and what is high on their agenda at the time you ask them. A materiality assessment provides a static picture of what is important today, with little insight on what will be important tomorrow.  

Today, we can agree that materiality is double and dynamic. Double materiality recognizes that a business should report on both impacts inwards (sustainability topics that are financially material influencing enterprise value) and impacts outward (sustainability topics that are material to the economy, the environment, and people). Dynamic materiality acknowledges that the financial materiality of an issue can be dynamic, changing based on foreseen or unforeseen events.

In this four-part blog series, we will explain how to enhance the value of materiality assessment and what these new materiality definitions mean for businesses, whether they use this assessment for the purposes of reporting, strategy building, or stakeholder assessment.

• Part one will focus on why companies should assess double materiality.
• Part two will look at how companies can monitor dynamic materiality.
• Part three will focus on identifying and assessing the company’s impacts outwards and how this assessment links to a human rights assessment.
• Part four we will discuss methods to evaluate how sustainability issues can impact enterprise value. 

Summary of Changes to the Definition of Materiality

• In June 2019, the European Commission introduced the “double materiality perspective” in its Guidelines on non-financial reporting: supplement on reporting climate related information. According to the Non-Financial Reporting Directive, a company is required to disclose information on ESG “to the extent that such information is necessary for an understanding of the company’s development, performance, position and impact of its activities.” The European Commission states: “The reference to the ‘company’s development performance and position’ indicates financial materiality, in the broad sense of affecting the value of the company. This perspective is typically of most interest to investors. (…)  The reference to ‘impact of the company’s activities’ indicates environmental and social materiality. This perspective is typically of most interest to citizens, consumers, employees, business partners, communities and civil society organizations.”
• In June 2020, the Global Reporting Initiative (GRI) published its exposure draft with a revised definition of materiality. The GRI states: “The organization prioritizes reporting on those topics that reflect its most significant impacts on the economy, environment and people, including impacts on human rights. In the GRI Standards, these are the organization’s material topics.”
• In August 2020, the Sustainability Accounting Standards Board (SASB) published proposed changes to the SASB Conceptual Framework. The proposed changes to the definition of materiality are intended to align to an international definition of financial materiality rather than a U.S.-centric one. The proposed definition reads: “For the purpose of SASB’s standard-setting process, information is financially material if omitting, misstating, or obscuring it could reasonably be expected to influence investment or lending decisions that users make on the basis of their assessments of short-, medium-, and long-term financial performance and enterprise value.” 
• The five reporting standards organizations, CDP, CDSB, GRI, IIRC, and SASB, (also known as Group of Five) published two papers, Statement of Intent to Work Together Towards Comprehensive Corporate Reporting in September 2020 and Reporting on enterprise value in December 2020. In these two papers, they describe materiality as "nested and dynamic" and present a comprehensive corporate reporting system with three lenses. The largest lens of reporting reflects “reporting on all sustainability matters that reflect significant positive or negative impacts on people, the environment and the economy.” The second lens is a subset of topics reflecting “those sustainability matters that create or erode enterprise value.” The third lens is the smallest subset of topics “already represented as monetary amounts recognized in the financial statements.” Materiality is dynamic because topics can move from the larger lens to the smaller lens and become financially material over time.
• In September 2020, the IFRS Foundation, which sets global standards in financial accounting, launched a Consultation Paper on Sustainability Reporting. One of the key questions it asks is whether a global standard should focus on issues material to investors ("single materiality") or address topics “that are material to multiple stakeholders’ understanding of a company’s effect on its environment” ("double materiality").

Blog | Thursday February 4, 2021

Companies Can’t Ignore the ‘She-cession’ Created by the COVID-19 Pandemic

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“Stronger engagement on gender equality is key to a sustainable global recovery from the COVID-19 crisis and building fairer, more inclusive, more prosperous societies. Women and girls are in the frontline of the pandemic and must be put in the driving seat of the recovery.”

In this statement, Jutta Urpilainen, EU Commissioner for International Partnerships, stresses the vital importance on the role of women in both responding to the COVID-19 pandemic and its economic recovery. Indeed, women will be key to the economic recovery from COVID-19, in part because they have been the hardest hit.

As early as April 2020, news investigations raised the alarm over the disproportionate impact of COVID-19 on women and their economic prospects. As the months went on, the pandemic continued to spread, governments imposed lockdowns, schools stayed closed, and more workers lost their jobs—the economic crisis caused by COVID-19 grew into a full blown “she-cession” that companies cannot afford to ignore.

Women Have Suffered Disproportionately due to COVID-19

Women make up the majority of workers in “frontline” sectors, including retail, health, K-12 education, and paid care. Many of these workers are in precarious situations with inadequate health and safety measures, putting themselves and their families at risk. In other sectors, women have experienced higher levels of job losses, either being let go or leaving to manage childcare.

In the U.S., women account for 53.6 percent of overall net job losses since the beginning of the pandemic, with Black and Latina women facing even higher unemployment rates. In Europe, the job loss rate for women is 1.8 times greater than that of men. Low-income women and women in rural settings in Latin America are more likely to be unable to work or go out during the pandemic.  Similar trends can be seen around the world in countries such as Brazil, South Africa, and India.

COVID-19 is likely to have long-lasting impacts on women’s economic participation: the poverty rate among women in Europe is expected to go up by 1.9 percent. In the U.S., nearly 40 percent of unemployed women have been out of work for six months or longer. In addition, the jobs that are coming back are not going to women; this is true even in female-dominated sectors like retail, leisure, and hospitality.

Job losses are not the only negative impacts women face. In the U.S., France, and the U.K., incidents of domestic abuse increased by 25-36 percent following the first confinement. Globally, domestic violence is expected to soar by 20 percent globally during lockdowns.

What’s more, around 70 countries have reported issues delivering family planning services during the pandemic. Marie Stopes International, which provides family planning services in 37 countries, estimates that nearly two million fewer women received birth control services between January and June of 2020.

Building Back Better—with Women in Mind

As governments and businesses begin to develop and enact plans for rebuilding, they need to incorporate an intentional gender lens on recovery efforts. Without this lens, we run the risk of undoing the decades of progress that we have made towards women’s economic empowerment and gender equality. 

So far, both the European Union and the U.S. state of Hawaii have already decided to put women at the center of their recovery. This holds enormous potential to help families and communities rebuild, as women invest more in their children’s education and health and put more of their income back into their local community. Thus, targeted programs and policies, including paid leave, equal pay, addressing gender bias in hiring, and others that support gender equality and women’s empowerment, are more important than ever.

BSR believes the six actions listed below are steps companies can take to ensure a gender-responsive approach to building back better.

1. Make flexible work options the norm so that all employees of all genders can balance their professional and personal responsibilities. This includes teleworking, reduced working hours and part-time schedules, flexible working hours, compressed work weeks, and role sharing, among others. For example, Mars, as part of their new “Full Potential” platform, has committed to advancing their approach to flexible work beyond the pandemic. These options will not be feasible for all roles, many of which are the hardest hit by the pandemic (retail, health, and care), so companies will need to consider other options to support women as listed below.
2. Consider re-entry programs, mentorship, and training for women who have been out of the workforce for an extended period. This should also include skills development to support employees to transition to more tech-based models of working. IBM is expanding its “returnship program” to hire and train women who have had to step back from employment during the pandemic, while Verizon retrained 8,000 workers to work remotely when stores were shut down and has allowed some of those employees to continue working remotely or part-time even when stores reopened.
3. Encourage men to do their share of unpaid care work through awareness-raising campaigns, providing paid paternity and care leave, and supporting men who choose to take leave for care responsibilities. Initiatives such as the Parental Leave Taskforce, founded by Dove Men+Care and Promundo, and PL+US are championing access to parental leave for dads everywhere. Their latest report highlights the significant challenges facing employees who lack paid leave and provides recommendations for the private and public sector to better meet the needs of businesses and employees in a post-pandemic world.
4. Support survivors of domestic violence to access the services and support they need. Offer paid leave for victims of domestic violence, relocation options, and information about local services. Avon and its parent company, Natura &Co, have partnered on #IsolatedNotAlone, a campaign that aims to raise awareness of the issue, provides resources, and calls on governments to take action.
5. Remember that the impacts of COVID-19 are not the same for all women and take an intersectional approach when designing policies and programs. This includes considerations for LGBTIQ+ women, women of color, and women with disabilities. Companies looking to expand or strengthen their Diversity, Equity, and Inclusion programs should consider these recommended actions to take intersectionality into account.
6. Advocate for a gender-responsive recovery that reaches the most vulnerable. To work toward solutions that are more systemic and comprehensive, companies can work with peers and through trade organizations to ensure a gender lens is placed on recovery efforts, including investments in care infrastructure, preventing and responding to increased gender-based violence, and promoting greater equality for all women. This will be particularly important to reach the 190 million women in global supply chains who face additional risks, for example, related to lack of access to contraception and extreme financial insecurity.

Later this year, the Generation Equality Forum will offer a once-in-a-generation opportunity for business, governments, and civil society organizations from across the globe to co-create an actionable roadmap to achieve gender equality by 2030.

The Forum will discuss the range of gender equality challenges laid bare by the pandemic, such as economic justice and technology for women and girls, as well as issues that remain critical to address, including climate justice and sexual and reproductive health. BSR, in collaboration with The B Team and Women Win/Win-Win Strategies, is excited to work with our members to catalyze meaningful commitments and action as part of this milestone gathering. Join us on March 2 for a webinar to learn about how business can contribute to the success of this landmark moment.