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Blog | Thursday July 19, 2018

How Luxury Can Lead the Future of Sustainable Business

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When luxury leader Chanel published its full-year earnings alongside its first sustainability report at the end of June, the company made a bold move to leave behind the discretion that has characterized it for decades and instead embrace greater transparency. This change signals disruption in the industry, and there is much more to come. While disruption can create challenges, it also offers great opportunity for businesses to become more resilient and ensure strong future growth.

Companies across industries are facing major challenges that, left unaddressed, will have an impact on the resilience of existing business models. These challenges—climate change and biodiversity loss, new technologies and automation, and rising economic inequality—have specific implications for the luxury sector. Climate change and biodiversity loss are affecting the supply of precious raw materials, as well as the resilience of the sector’s infrastructure; new technologies and automation are redefining the manufacturing process, retail experience, and nature of work; and rising economic inequality means luxury brands will need to re-affirm their value, particularly in emerging markets.

Given the luxury sector's role as influencers and trendsetters and its reliance on well-functioning ecosystems, what is the role of luxury to enable and help drive environmental and social progress?

BSR’s Responsible Luxury Initiative (ReLI) is today launching a new report that offers a roadmap toward a resilient luxury sector and highlights three opportunities for luxury companies to invest in future success. The report, Disrupting Luxury: Creating Resilient Businesses in Times of Rapid Change, was developed in coordination and dialogue with ReLI members, who include Cartier, Chanel, Harvey Nichols Group plc, The Hong Kong and Shanghai Hotels Limited, IWC Schaffhausen, Kering, LVMH Moët Hennessy – Louis Vuitton S.A., Michael Kors Holdings Limited, mytheresa.com, OTB, PVH Corp., Ralph Lauren, Richemont International S.A., Swarovski, and Tiffany & Co.

The three opportunities for luxury brands that we have identified in the report are to engage in the circular economy, contribute a positive impact on society, and strongly articulate value to all stakeholders.

Engage in the Circular Economy

Luxury companies can engage in the circular economy, a system that endeavors to protect resources by using less, wasting less, and recycling more, in the following ways:

• Adopt regenerative sourcing practices and invest in the restoration of important ecosystems to ensure the availability of precious raw materials derived from nature, such as wool, leather, exotic wood, cashmere, and rare essential oils.
• Expand product life cycles by sourcing recycled and upcycled materials for products and by designing new business models that enhance the value of luxury products through giving them many lifetimes.
• Build on existing collaborative relationships with key suppliers to identify, catalyze, and support innovation in materials and processes. 

Contribute a Positive Impact on Society

Luxury companies can use both their core business strategies and philanthropic agendas to contribute a positive impact. They can undertake the following:

• Further support social and environmental progress by assessing how products and services affect society and the planet and using complementary business and philanthropic strategies to address key issues.
• Use the power of their brands to promote cultural change toward gender equality and thereby contribute to women’s empowerment; focus on empowering women in luxury supply chains.
• Help ensure that people working in their value chains receive a fair wage and provide training for workers to give them the skills they will need for future jobs.

Strongly Articulate Value to All Stakeholders

Luxury companies can prepare for transparency and better engage investors and consumers on environmental and social progress in several ways:  

• Set a new standard for transparency by providing more details about how their business practices affect the environment and local communities.
• Capture the attention of shareholders who are interested in sustainability and looking to invest in companies that create long-term value.
• Engage consumers more deeply on a new value proposition for luxury that fully integrates sustainability.

These opportunities do not encompass everything that luxury companies must do to be more resilient and sustainable. Like all businesses, they should look to global frameworks, like the Paris Agreement and the UN Sustainable Development Goals, for guidance on fundamental practices.

However, these recommendations offer a luxury-specific perspective on resilience that builds on the sector's specificities and strengths, such as close relationships with suppliers, the ability to experiment with more flexible manufacturing capabilities than mass-produced goods, and a traditionally long-term view of business focused on preserving heritage and brand equity. 

Implementing these opportunities will allow luxury companies to become a model for other sectors, demonstrating how social and environmental sustainability can fuel future growth, drive innovation, and strengthen brand equity.

If you would like to learn more about the Responsible Luxury Initiative, please contact us.

Reports | Thursday July 19, 2018

Disrupting Luxury: Creating Resilient Businesses in Times of Rapid Change

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Companies across industries are facing major challenges that, if left unaddressed, will have an impact on the resilience of existing business models. These challenges—climate change and biodiversity loss, new technologies and automation, and rising economic inequality—have specific implications for the luxury sector.  

Climate change and biodiversity loss are affecting the supply of precious raw materials, as well as the resilience of the sector’s infrastructure; new technologies and automation are redefining the manufacturing process, retail experience, and nature of work; and rising economic inequality means luxury brands will need to re-affirm their value, particularly in emerging markets. Given the luxury sector's role as influencers and trendsetters and its reliance on well-functioning ecosystems, what is the role of luxury to enable and help drive environmental and social progress? 

This report from BSR’s Responsible Luxury Initiative offers a roadmap toward a resilient luxury sector and highlights three opportunities for luxury companies to invest in future success. 

Blog | Tuesday July 17, 2018

Join Us to Empower 1.6 Million Women Workers through HERproject by 2022

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The products and services that keep our societies advancing depend on interconnected economies and global supply chains. Often, if you follow these chains to their very end, you will find women in factories or on farms: Approximately 200 million women work in global supply chains. From Bangladesh and China to Kenya and Ethiopia, women are at the heart of the production of many of the clothes we wear and much of the food we consume.

Yet these women face specific systemic discrimination and inequality that make their lives harder—and that weakens the supply chain. This inequality exists both inside and outside the workplace. For example, a man with the same experience and educational background can expect to make 41 percent more than his female counterparts in the garment industry in Bangladesh. Meanwhile, women in MENA and South Asian countries do 80-90 percent of the total unpaid care work.

BSR's HERproject is based on the belief that women can be powerful agents of change to address these inequalities. When low-income working women are empowered to make and act on choices they value, they can change their workplaces, communities, and societies for the better.

Through discussions with our global brands and partners, we have developed a new vision and model for empowering women in global supply chains. The aim of our new HERproject strategy is ambitious: With our partners, we will double our impact and improve the well-being, confidence, and economic potential of ​1.6 million women workers by 2022.

The aim of our new HERproject strategy is ambitious: With our partners, we will double our impact and improve the well-being, confidence, and economic potential of ​1.6 million women workers by 2022.

Over the last 10 years, we have brought together global brands, their suppliers, and local NGOs to deliver workplace-based interventions on health, financial inclusion, and gender equality. Having worked with over 60 brands in 14 countries to empower over 800,000 women, HERproject has become the largest workplace program devoted to unlocking the potential of women workers in global supply chains. 

We are proud to have stood with inspirational—and powerful—women around the globe as they drive major change in their own lives as well as in the lives of their colleagues, families, and communities.

But we don’t believe in standing still. The supply chains we work in are constantly evolving; the lives and conditions of women are not static, and neither is HERproject.

To implement our strategy, we are asking brands to make a major commitment to women’s empowerment. Through HERproject, we would like to work with our partners and help them to:

• Integrate women’s empowerment into their sourcing practices​;
• Support and recognize suppliers to make progress on women’s empowerment;
• Work toward a greater level of integration and buy-in at the supplier level; and​
• Collaborate with peers and key stakeholders to set the agenda for improved outcomes for women in global supply chains.

We would also like committed brands to work with us to enhance the visibility of women workers in global supply chains through their collective reach and influence​. We commit to help brands speak up, louder and more frequently, for the rights and welfare of these women in global policy debates.

It’s time for all of us to up our game and aim higher. For genuine change for women in supply chains, we need to commit and collaborate. Our new strategy outlines a pathway for us to achieve our vision together: empowered women, dignified work, better business.

We look forward to deepening our engagement with our existing partners and to welcoming new partners to these efforts. To learn more about these possibilities and to discuss your involvement with HERproject, please contact us.

Reports | Tuesday July 17, 2018

Resilient Business, Resilient World: A Framework for Private-Sector Leadership on Climate Adaptation

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Climate change represents a material risk to the private sector with profound implications across companies’ operations, in their supply chains, and in the vulnerable communities in which they operate. For the past three years, the World Economic Forum’s annual Global Risk Report has ranked climate risk high-priority in terms of both likelihood and impact. From extreme weather events, like hurricanes, flooding, and drought, to longer-term events like sea-level rise, the private sector faces a host of physical climate-related events that create risk on various aspects of the value chain. And yet, companies have the capacity to be powerful agents of climate resilience across society—if properly equipped with a comprehensive diagnosis of climate risk and tailored strategies for enhancing adaptive capacity to the effects of climate change.

This report assesses and consolidates the best available knowledge from natural and social science in the field of climate risk and resilience to present an accessible and actionable framework for private-sector leadership on climate change resilience inside individual companies, across complex global supply chains, and within frontline communities vulnerable to climate impacts.

Blog | Monday July 16, 2018

Global Climate Action Summit Update—Will We See You There?

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With the Global Climate Action Summit coming up this September 12-14 in San Francisco, California, businesses, cities, states, investors, and citizens all have the opportunity to showcase extraordinary climate action commitments that will give world leaders the confidence to continue their support of the Paris Agreement and prevent the worst effects of climate change.

Earlier this month, BSR was pleased to issue Summit invitations on behalf of the Summit Co-Chairs to those of our members who have already demonstrated robust climate commitments through the We Mean Business Take Action Platform. We are encouraging companies to join us in supporting the Summit by making a new commitment, participating directly, or attending a side event. There are many ways businesses can engage.

The main Summit program is focused around five headline challenges:

1. Healthy Energy Systems;
2. Inclusive Economic Growth;
3. Sustainable Communities;
4. Land and Ocean Stewardship; and
5. Transformative Climate Investments.

BSR is working closely to develop compelling content and feature bold commitments from business around Challenge 2 on Inclusive Economic Growth—specifically showcasing how business leadership on climate can generate good jobs, broad-based economic opportunity, and inclusive, resilient growth. This issue includes the following sub-challenges:

• Science-Based Targets Challenge: Encouraged by Summit Co-Chair Anand Mahindra at Davos in January and through the more recent launch of the Oslo Climate Leadership Declaration, businesses around the world are being challenged to set science-based emissions reduction targets (SBTs) ahead of the Summit, thereby aligning with the Paris Agreement and the level of decarbonization required to keep global temperature increase below 2 degrees C. Companies that are ready to commit to an SBT can reach out directly to CDP to do so.
• Resilience Challenge: Resilience is defined as “the capacity to recover quickly from difficulties.” In the context of climate change, resilience is the ability of a system or community to rebound following a shock, such as a natural disaster. Companies are encouraged to make large-scale supply chain climate resilience commitments that will enable their suppliers to implement resilience strategies—protecting workers, communities, and the natural environment from climate change impacts. For business, building climate-resilient supply chains will enable impact at scale and deliver substantial benefits.
• Just Transition Challenge: Businesses, governments, and labor organizations can share success stories on and make commitments to both a) manage impacts on workers and communities transitioning away from high-carbon sectors and b) promote broad-based economic opportunity through the creation of good jobs in newly emerging sectors. Specifically, companies that procure renewable energy can pledge to integrate just transition and human rights principles into their procurement standards for renewable energy purchases.

In addition to securing commitments related to the above-mentioned Summit challenges, BSR will co-host an event on Tuesday, September 11 focused on various climate resilience efforts.

This side event will explore a number of approaches to help the public and private sectors establish more resilient communities, ecosystems, and supply chains, which can enable people, businesses, and institutions to thrive in a world of increasing climate risks. It will be open to Summit registrants and non-registrants alike, with advance registration required. Please save the date, and check back on the BSR events and Summit affiliate events pages for more details. 

For more information about the Summit, visit the Frequently Asked Questions page. If you have any questions about how to work with BSR to make sure your climate commitments are included in the business contribution to climate action, please contact us.

We hope you join us in San Francisco this September, as our collective efforts must lead to a turning point by 2020 in order to prevent the worst effects of climate change.

Blog | Thursday July 12, 2018

Three Climate Commitments for the Railway Sector

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In 2015, the transport sector contributed 25.8 percent of total greenhouse gas emissions in the European Union (EU). In fact, transportation is one of the few sectors where greenhouse gas emissions are still rising. If the global community is to achieve the Paris Agreement goal of limiting the increase in global average temperature to well below 2°C (while seeking to limit it to below 1.5°C), the transport sector must make a major contribution.

Railsponsible is a collaborative initiative of railway companies focused on sustainable procurement. Current members are leading railway operators and rail manufacturers: Alstom, Bombardier, CAF, Deutsche Bahn, Knorr-Bremse, Nederlandse Spoorwegen, NMBS, RFI, SBB, SKF, and SNCF. To help the railway industry reduce its overall climate impact, the members of Railsponsible have developed a position paper on climate, setting out possible commitments and activities for both Railsponsible members and for their business partners in the sector.

When measured by the emissions generated during the “use phase,” rail is one of the most climate-friendly modes of transport: It contributes less than two percent of EU emissions despite having more than eight percent of market share. However, the rail industry supply chain includes energy-intensive raw materials, infrastructure development, manufacturing, and maintenance/overhaul, as well as end-of-life/recycling, all of which have significant impacts. Serious effort is needed to address the full climate impacts of the rail supply chain.

Three climate commitments for the rail sector

Railsponsible has identified three key climate commitments that are relevant to and supported or adopted by most Railsponsible members, who recommend that these be incorporated into railway sector companies’ climate strategies and sustainable sourcing approaches. The three commitments cover both manufacturing and transportation (following the life cycle of rail sector products):

1. Adopt an ambitious renewable energy target
2. Create an ambitious energy productivity target
3. Make climate change information available

Given the above, in designing their strategies, companies should consider their size and position in the rail supply chain. Where relevant, organizations may wish to translate these commitments into award criteria for tenders in their individual procurement processes.

Walking the talk

These suggested commitments are based on and reflect existing commitments from Railsponsible members, which are divided into two categories: absolute targets and relative targets.

An absolute reduction refers to a decrease the total quantity of greenhouse gas emissions. Absolute targets set by Railsponsible members include the following:

• Zero emissions for mobility (train, bus, car) and buildings by 2020 (Nederlandse Spoorwegen).
• 100 percent renewable energy by 2050 (Deutsche Bahn).
• Transparent reporting on emission performance data and targets (all members).

A relative reduction refers to the amount of emissions per unit of economic output. In this case, emissions might be reduced relative to the company’s total profits, units of a good produced (for suppliers), or passenger kilometers (for railway operators). Relative targets set by Railsponsible members include the following:

• Reduction of products’ energy consumption by 20 percent by 2020, compared to 2014 [Watt hour/passenger kilometer] (Alstom).
• No increase of carbon emissions until 2020 compared to 2015, while increasing production (Knorr-Bremse).
• 40 percent reduction in CO2 emissions from manufacturing per tonne of products sold (SKF).
• 20 percent increase in energy efficiency for passenger and freight traffic by 2025, compared to 2015 (SNCF).

We hope that Railsponsible’s three key climate commitments will help further advance the growing movement toward climate mitigation in the railway sector. While the examples presented above may provide inspiration to rail operators and to their suppliers, their applicability to individual companies will vary. We recommend careful deliberation and assessment before adopting a commitment.

Railsponsible members believe that the best way to set, implement, and advance climate objectives is through collaboration. Since its launch in 2015, Railsponsible has grown significantly and has provided an assessment platform for over 800 suppliers. The initiative provides a forum for both rail operator and system houses and their suppliers to discuss challenges, devise solutions, and work together on coherent implementation.

If you would like to join the Railsponsible collaboration, please contact us.

Case Studies | Monday July 9, 2018

The Coca-Cola Company: Building a Climate-Resilient Value Chain

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The Coca-Cola Company has been working to reduce emissions in its supply chain for years—including not only those associated with bottling, but also those associated with growing ingredients, producing packaging, and distributing and refrigerating products. As climate change impacts have begun to manifest around the globe, the 132-year-old company partnered with BSR to take this work a step further to examine what climate risk and resilience might mean for The Coca-Cola Company value chain.

The Challenge

From agricultural ingredients, like citrus and tea, to hyper-local distribution systems, The Coca-Cola Company supply chain is one of the largest and most complex in the world. Coca-Cola products are sold in more than 200 countries and territories, and each of those markets faces unique exposure and vulnerability to the impacts of climate change.

Mitigation efforts—those focused on reducing greenhouse gas emissions—are vital to any company’s climate strategy and critical to global efforts to avoid unmanageable climate impacts. As the impacts of climate change are increasingly felt around the world, however, it has become clear that simultaneous efforts are necessary to increase adaptive capacity and build resilience.

“Resilience” is defined as “the capacity to recover quickly from difficulties.” In the context of climate change, resilience is the ability of a system (such as a bottling plant, distribution network, or supply chain) or community to rebound following a shock such as a natural disaster. Building resilience requires not only recognizing potential hazards like extreme weather events, but also understanding the underlying vulnerabilities that may affect recovery from these potential disasters. For example, insufficient infrastructure can reduce a community’s capacity to rebound following a disruption like an extreme weather event, as can poverty or gender inequality.

After years focused on climate mitigation and water stewardship, understanding climate risk and resilience was a natural next step for Coca-Cola.

Our Strategy

BSR partnered with Coca-Cola to begin building the foundation for a more resilient company that is better able to anticipate, avoid, accommodate, and recover from climate risks in the future. At the outset, we identified seven markets—Argentina, Brazil, China, India, Kenya, Mexico, and the United States—and two commodities—coffee and tea—to serve as proxies for the full Coca-Cola value chain. For each of these markets and commodities, we explored exposure to major climate hazards in the context of underlying vulnerabilities, such as rapid urbanization, at-risk populations, food and economic insecurity, and insufficient infrastructure.

Using this analysis, a benchmark of climate resilience activities in the food and beverage sector, Coca-Cola’s existing risk mitigation strategy, and insights from internal company interviews, we developed a framework for identifying and prioritizing climate-related risks. We then mapped Coca-Cola’s existing programs and initiatives to high-priority risks and outlined an approach for expanding this work further across the company’s major business units.

Our Outcomes and Impact

The climate resilience framework we developed aims to integrate resilience into Coca-Cola’s existing strategy, risk management, and sustainability systems. The framework is designed to connect and amplify The Coca-Cola Company’s efforts in empowering women, protecting the climate, and sustainably sourcing ingredients, as well as in water leadership and community development. Over time, we hope to see the framework used to help Coca-Cola create a more resilient value chain, enabling the company to confidently source responsibly cultivated ingredients, withstand or promptly recover from climate-related impacts, identify and reduce climate risks, and contribute to building value chain and community resilience where Coca-Cola is produced and sold.

We hope that these leading-edge efforts will inspire other companies, as well as their partners in the public sector and civil society, to take a more holistic look at climate risk in their value chains and communities and identify opportunities to build adaptive capacity and resilience.

Lessons Learned

Undertaking this work with Coca-Cola allowed us to translate what we know about climate risk and resilience into the context of a global supply chain. Here are a few suggestions for companies interested in exploring climate risk and resilience in their value chains:

• Start small: Begin with a selection of facilities, locations, or products that represent important aspects of your business. This will allow you to identify the most useful and important data points before scaling your approach across the organization.
• Integrate into existing systems: Rather than approaching climate risk and resilience as a new, standalone exercise, consider integrating climate considerations into existing risk management and/or sustainability systems.
• Appreciate both the global and the local: Much like water stewardship, managing climate risk and building resilience is both a global and intensely local challenge. While some tenets and approaches can be broadly applied, individual interventions must be customized and reflect on-the-ground realities.

Learn more about our work on climate-resilient supply chains.

Blog | Thursday July 5, 2018

Making Data Work for Women

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As Melinda Gates put it in a speech at the 2016 Women Deliver conference: “We can’t close the gender gap without first closing the data gap.” Throughout history, women have often been uncounted and therefore invisible, and increasingly, the international community is taking notice. Organizations, including the Bill & Melinda Gates Foundation, the OECD, UN Women, Women Deliver, and the World Bank, have publicly committed to accurate, gender-disaggregated data as a priority.   

To help business do its part to promote stronger collection and use of gender data, BSR is proud to lead a major new initiative to develop a gender data framework for global supply chains. This framework will serve as a practical, credible guide, defining which gender indicators are needed to monitor corporate progress toward gender equality in supply chains and to guide future investments. BSR will partner with ISEAL Alliance, with inputs from the UN Global Compact and UN Women and support from the C&A Foundation, to develop the framework. Fair Wear Foundation will test the framework as a pro-bono partner.

Data is key to progress. It is an essential tool, both for decision-makers to design and measure impactful programs and for citizens to hold them accountable. More and better data makes issues count; it helps inform the policies, programming, and practices that drive impact.

For years, though, there has been a gap in gender data, which is data disaggregated by sex and specifically relevant to women and girls. Women and girls are sometimes missing from datasets, or their contributions and priorities, as well as the challenges they face, are not visible there. At a global level, only 21 percent of the data needed to monitor the 54 gender-specific indicators in the UN Sustainable Development Goals is up to date.

The gender data gap is similarly wide within businesses. The Workforce Disclosure Initiative—a coalition of 100 major investors promoting transparency from companies on how they manage workers—asked 35 leading companies to disclose data on working conditions across their businesses. Of these leading companies, only two disclosed demographic data on the women and men in their critical supply chains.

This absence of the most basic data has led to the development and implementation of policies and programs that do not account for the various barriers women face or the number of women who face them. These policies and programs therefore fail to deliver equally beneficial outcomes for men and women—or may at times deliver outcomes that are actively harmful to women.  

With approximately 190 million women employed in global supply chain-related jobs, business has  unique access to an enormous pool of data that can help shape and strengthen efforts to improve women’s lives.

Specifically, the private sector can leverage its influence and reach to highlight the ongoing unmet needs for women across supply chains, from modern contraception to equitable career opportunities. In this way, companies can put themselves at the heart of the drive for equal societies.

However, the proliferation of databases and guidelines can be complicated to navigate. For businesses in particular, there is no clear guidance on what data to gather and how to gather it. While this is bad for business today, it is also a huge opportunity to develop a clearer, fuller picture of the realities women face.

That is exactly what our new gender data framework will seek to do. We will develop and test it with our partners over the next two years.

We are looking for leading companies and experts to engage with us on the development of this framework and to pilot it in global supply chains. If you are interested in joining this ground-breaking initiative, please contact us to learn more.

Blog | Tuesday July 3, 2018

How to Prevent Your Sustainability Collaboration from Failing

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More than ever before, companies are collaborating with stakeholders across their value chains, and even across entire regional or global governance systems, to learn about the systemic issues that curb long-term business growth—such as keystone species extinction, talent shortages, and climate-threatened supply chains—and agree on joint actions to address them.

There are numerous examples of successful and impactful multistakeholder collaborations for sustainable development: For instance, half a billion children have been vaccinated and more than nine million lives have been saved in the world’s poorest countries since the founding of Gavi, the Vaccine Alliance, in 2000. And the Maritime Anti-Corruption Network (MACN) is successfully driving progress to eliminate corruption across the maritime industry’s value chain, including influencing country regulatory frameworks to increase the efficiency, integrity, and transparency of vessel inspections.

But it is also important to acknowledge the numerous collaborations that never get off the ground, are bogged down in governance negotiations, or struggle to drive meaningful action from participants to meet their impact goals. Learning from both the failures and successes helps to ensure that future collaborations do not repeat the mistakes of the past.

In our recent report, Private-Sector Collaboration for Sustainable Development, we reviewed 21 current and previous collaborations and interviewed more than 40 experts about collaborating for sustainability. From this research, we identified risk factors across the lifecycle of collaborations, from start-up to early implementation to scaling. These include launching prematurely (before participants have had the opportunity to build trust and buy into the proposed solutions), insufficient resources to meet the ambitions of the collaboration, breaches of trust between participants, lack of leadership succession planning, and mission creep.

If you are thinking of starting or joining a collaboration or are currently involved in one, you may encounter some of these red flags. Below are our recommendations for how to address or mitigate them. Some of these steps will require collective action from your collaboration, but you and your partners can improve the odds of success by raising issues as they arise, demonstrating commitment, and taking actions to reduce the risk of failure.   

In the Start-Up Phase

• Spend the time to prepare and engage critical participants. Multistakeholder initiatives take an average of 18 months to move from early discussions to launch. This is a longer time frame than most participants expect, but the time is well spent on attaining buy-in and refining the initiative’s value proposition. Organizations that launch more rapidly are more likely to face challenges early in their growth because they don’t have sufficient participant support or an initial strategy for impact
• Diversify funding. Seeking seed funding from foundations or governments can help initiatives build their value proposition for companies to eventually back the effort themselves. This diverse funding can also make a collaboration better plan for the long term and can help to avoid the “free rider” problem, where competing companies avoid being the sole contributors to an effort that they see as beneficial to their peers.

During Early Implementation

• Prioritize personal relationships and trust-building. Trust is the glue that holds organizations together when the going gets rough. Scheduling meetings in person–while time-intensive and expensive–can be an important investment in building relationships between participants, increasing their commitment to each other and the effort.
• Build a database of participant contacts. Relying too heavily on one point of contact for a participating organization can lead to burnout or loss of the relationship with his or her firm if that person leaves. Collaborations do well to identify several participant contacts and keep them informed about the collaboration’s progress, in case they need to step in.

When Scaling

• Rotate leaders. Some initiatives expose more people to leadership roles by instituting terms for key positions, such as the steering committee. This allows more organizations to participate in governance and creates natural periods for an initiative to refresh its strategic vision under new leadership. To maintain some consistency, it can be helpful to stagger terms. For example, a vice-chair could remain in office when a new chair is elected.
• Agree up front on milestones for scaling or sunsetting. When designing the initiative, members can agree on indicators or milestones to review during each strategy cycle to determine when it may be time to consider different growth paths, including scaling to new geographies or sectors, spinning off, merging, pivoting, or sunsetting the initiative. Some initiatives may determine from the beginning that they will be time-bound, lasting only a few years to accomplish their objective.

Private-sector collaboration for sustainability has enormous potential—but it is challenging to do well. Rushing into a collaboration without the necessary structures and planning can be a recipe for failure.

At BSR, we have 20 years of experience in designing, implementing, and scaling collaborative initiatives. Some have run for decades with ever-growing impact; some have sunset with relative satisfaction; and some have failed to take off. These successes and the failures help us build our expertise in managing collaborative initiatives.

If you are planning to collaborate for sustainability, let us help you do it right. Contact us for more information.

Blog | Monday July 2, 2018

Building Responsibly Announces Worker Welfare Principles

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The rapid growth of the construction sector has attracted large engineering and construction firms, a broad range of multinational and local subcontractors, and millions of low-skilled migrant workers to regions that often have weak local regulation on human rights issues. Workers in these regions are vulnerable to a host of labor and human rights violations, including forced labor, poor working and living conditions, debt bondage, and restrictions on worker representation and association—issues that are not easily solved.

Additionally, this sector faces unique challenges in its efforts to address these human rights concerns, including the decentralized nature of companies’ operations; the short-term nature of projects; industry interconnections (companies are clients of each other); multi-tiered supply chains; and the complexity of relationships with public-sector clients, who are also legislators and regulators where they do business.

For these reasons, Building Responsibly—a business coalition of leading engineering and construction companies working together to raise the bar in promoting the rights and welfare of workers across the industry—has developed a set of Worker Welfare Principles that establish a common, global baseline for the treatment of workers in the engineering and construction industry.  

On June 21, Building Responsibly launched these Principles with its founding members, who include Bechtel, Fluor, Multiplex, Vinci, and Wood. Together, Building Responsibly members employ more than 400,000 people and operate in more than 100 countries. The Principles were developed in consultation with a diverse set of public, private, and civil society stakeholders.

James Walker, group head of ethics and compliance, Wood, and vice-chair of Building Responsibly, told us, “These Principles represent the first major output of our collaboration through Building Responsibly and establish a model others may adopt as they seek to engage with these challenges and issues. Authored by businesses in consultation with external stakeholders, the Principles are rooted in international human rights standards and responsive to diverse global business contexts, ensuring that they are both ambitious and achievable.” He added, “We look forward to ongoing collaboration with workers, clients, business partners, civil society, and others to encourage widespread adoption of these Principles and good practices across the industry.”

Through the 10 Principles, companies commit to ensuring that:

1. Workers are treated with dignity, respect, and fairness.
2. Workers are free from forced, trafficked, and child labor.
3. Recruitment practices are ethical, legal, voluntary, and free from discrimination.
4. Freedom to change employment is respected.
5. Working conditions are safe and healthy.
6. Living conditions are safe, clean, and habitable.
7. Access to documentation and mobility is unrestricted.
8. Wage and benefit agreements are respected.
9. Worker representation is respected.
10. Grievance mechanisms and access to remedy are readily available.

Companies will work to implement the Principles by:

1. Ensuring commitment from leadership;
2. Managing oversight of contractors and supply chains;
3. Providing training to leadership, employees, and workers;
4. Enabling transparent reporting of incidents and concerns; and
5. Engaging with other industry members and all affected stakeholders.

While Building Responsibly is proud to achieve this milestone, the initiative intends to use the Principles to further shape industry practices by developing detailed guidance notes and tools to support companies’ implementation of the Principles. It also plans to, in collaboration with stakeholders, create a roadmap for solutions that improve the rights and welfare of workers in the industry.

For more information about how to get involved, please contact us or visit the Building Responsibly website.