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Audio | Tuesday November 28, 2023

The Impact on Climate and Nature with David Wei

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David Wei, BSR Managing Director, Climate and Nature chats with David Stearns on The Impact on Climate and Nature, exploring:

• How these rules and regulations apply specifically to net zero reporting and other climate-related commitments.
• What impact they may have on greenwashing, specifically making it less permissible. 
• To what extent the new requirements may help companies increase their ambition and drive greater impact toward net zero goals. 
• New challenges for climate-focused sustainability practitioners, including the Chief Sustainability Officer. 
• Key competencies that boards will need to develop to ensure that actions are commensurate with disclosure.
• To what extent the politicization of these efforts in the U.S. may a challenge for Chief Sustainability Officers or other leaders at the forefront of this work.

Audio | Tuesday November 28, 2023

The Impact Across Business Units with Adam Fishman

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Adam Fishman, BSR Associate Director, Transformation chats with David Stearns on The Impact Across Business Units, exploring:

• The latest regulatory frameworks, how they are distinct and how they work together.
• Why this is an important time for those in sustainability functions within a company and advice to help them navigate this rapidly evolving landscape. What should they be doing in the near and long-term? 
• How this is likely to affect different job functions and teams within a company, specifically finance, procurement, marketing, human resources, boards, and the c-suite. 
• Do these regulatory frameworks go far enough as far as requiring companies to report and disclose on elements of their sustainability activities? 

Audio | Tuesday November 28, 2023

Leading with Ambition with Aron Cramer

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Aron Cramer, BSR President and CEO, chats with David Stearns on the topic of Leading with Ambition, exploring:

• Why companies should be enthusiastic about these changes to reporting requirements and regulatory frameworks.
• The apparent tension that these reporting requirements have created between ambition and compliance and where the pitfalls might be for companies.
• Whether there is a possibility that new requirements and reporting rules might actually unlock greater ambition.
• Advice for companies pursuing an ambitious sustainability strategy, and whether there is business value in this approach. 
• The evolving role of the Chief Sustainability Officer on strategy, leadership, and external communications.
• Whether these regulations and compliance frameworks go far enough.

Audio | Tuesday November 28, 2023

Unpacking Double Materiality with Beth Richmond

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Beth Richmond, BSR Director, Transformation chats with David Stearns on Unpacking Double Materiality, exploring:

• How the different frameworks and guidelines define materiality, where they are similar and where they are different.
• Why companies should apply the concept of double materiality, and why it is the approach that BSR favors.
• What BSR says to companies who only engage in financial materiality to help them understand why they should embrace double materiality.
• Whether double materiality requires engagement with new stakeholders, both internal and external.
• What Beth is hearing from companies who are going through the process of coming into compliance with mandatory reporting.

Audio | Tuesday November 28, 2023

Role of Boards and Governance with Christine Diamente

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Christine Diamente, BSR Managing Director, Transformation chats with David Stearns on the Role of Boards and Governance, exploring: 

• What new skills boards need to have in light of these new regulatory and reporting requirements.
• What platforms or opportunities exist for upskilling and what kind of requests is BSR receiving from boards.
• What do we mean by business transformation and what hurdles and opportunities exist for corporate leaders in this new environment.
• Lessons learned from Christine’s experience engaging in scenario planning exercises with BSR members. 

Blog | Tuesday November 7, 2023

A Human Rights Impact Assessment of the Tech Coalition’s Lantern Program

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How should companies respond when actions undertaken to address known and severe adverse human rights impacts themselves give rise to new human rights risks? BSR’s human rights impact assessment of the Tech Coalition’s Lantern Program, which we are publishing today, provides an excellent example of how companies can address this challenge in practice. 

Online child sexual exploitation and abuse (“OCSEA”) is one of the most severe human rights impacts in the technology industry today. In 2022, the National Center for Missing and Exploited Children received over 32 million reports containing approximately 88 million suspected child sexual exploitation images and videos, while the NSPCC reports an 82% rise in online grooming crimes against children in the last five years. OCSEA often results in serious adverse physical, emotional, and psychological impacts on victims and survivors, and is linked with higher risk of self-harm and suicidal ideation. 

The Lantern Program is a framework for sharing information related to harmful threats (known as “signals”) for the purpose of combating OCSEA and strengthening how companies enforce their child safety policies. The Program seeks to facilitate cross-industry knowledge sharing, proactive detection of OCSEA, and industry-wide moderation of known or suspected child sexual abuse material.

The goal of signal sharing is to supplement companies’ individual efforts by providing information that helps companies identify cases of OCSEA or offenders who may be operating across different platforms. Examples of signals include hashes of known child sexual abuse material (CSAM), URLs, common keywords or phrases, text fields, search terms, or basic subscriber and user information that may indicate actual or potential cases of OCSEA. 

However, signal sharing between companies may be associated with human rights risks such as freedom of expression (e.g., through over-moderation of content, including content generated by children), privacy (e.g., through overbroad data sharing or monitoring), or nondiscrimination (e.g., by taking action against individuals from communities at greater risk of being wrongly accused of OCSEA).

While these risks exist at individual companies today, their severity and likelihood may increase with the cross-platform nature of the Lantern Program. For example, signal sharing may increase the likelihood of erroneous content removal or blocking of user accounts because signals are further decontextualized when shared across platforms. 

For this reason, the Tech Coalition (an alliance of global tech companies who are working together to combat child sexual exploitation and abuse online) commissioned BSR to undertake a human rights impact assessment of the Lantern Program before its launch. The objective was to identify the potential adverse human rights impacts of the Lantern Program and recommend appropriate action for the Tech Coalition and participants of the program to address these impacts. 

Our assessment concludes that the increasingly cross-platform nature of OCSEA necessitates a collaborative effort and that the multi-company approach underpinning the Lantern Program has the potential to fill a key gap in the industry’s approach to child safety and protection. It will help participating companies better address some of the most severe adverse human rights impacts associated with their platforms.

Further, we conclude that the Tech Coalition has already made significant efforts to prevent, mitigate, and address the human rights risks associated with the Lantern Program. This includes governance mechanisms to ensure participants uphold the commitments they make to participate in the program, a quality assurance plan to ensure that signals shared are applicable and relevant to OCSEA violations and abuse, and parameters around what data can be included in the Lantern database. 

In the report, we identify eight categories of human rights that may be adversely impacted and make 19 recommendations to supplement and enhance the Tech Coalition’s existing efforts, covering: 

• Governance and Participant Engagement, such as supporting smaller participants to be able to comply with requirements and establishing a due diligence process for evaluating new members. 

• Transparency and Stakeholder Engagement, such as facilitating an annual dialogue with key stakeholders where participants can share and discuss their use of the Lantern Program and enabling third-party audits and trusted researcher access to the database. 

• Policy and Process, such as taking a human rights-based approach to responding to potential government requests for data. 

• Technical Measures, such as implementing technical barriers to minimize data collection, storage, and sharing. 

The Tech Coalition has published a response describing how they plan to address our recommendations—they have already implemented nine recommendations, and they are pursuing or investigating the rest. 

The UN Guiding Principles on Business and Human Rights make clear that companies should address adverse human rights impacts with which they are involved and increase their leverage to do this effectively by collaborating with other actors. The Lantern Program achieves both objectives. 

However, the reality in the technology industry is that many human rights can be in tension with each other and that actions to address some adverse impacts may bring new human rights risks.

We warmly welcome the nuanced, thoughtful, and sophisticated way that the Tech Coalition has addressed this challenge, and hope that this assessment both informs progress toward combating OCSEA in a rights-respecting way and inspires other multi-company and multi-stakeholder efforts to consider similar initiatives. 

Reports | Tuesday November 7, 2023

Tech Coalition Human Rights Impact Assessment of the Lantern Program

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The Tech Coalition commissioned BSR to undertake a human rights impact assessment (HRIA) of the Lantern Program, a new signal sharing initiative that will enable technology companies to send and receive online identifiers or indicators (“signals”) related to online child sexual exploitation and abuse (OCSEA).

The Lantern Program was established to address the cross-platform nature of OCSEA, and to protect the rights of children by supporting companies in their efforts to address OCSEA-related harms. However, the use of a cross-platform signal sharing program by companies may have unintended adverse impacts on human rights, such as privacy, nondiscrimination, and freedom of expression. The goal of this HRIA is to:

• Identify and prioritize human rights impacts with which the Tech Coalition is involved through the Lantern Program, including both risks and opportunities, and the vulnerable groups impacted.
• Recommend appropriate action for the Tech Coalition and participants of the program to address these impacts (i.e., avoid, prevent, mitigate, and remedy).

Blog | Thursday November 2, 2023

How Will Chinese Companies Shape the Global EV Market?

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Overview

Global commitments to reduce emissions have led to increased regulation to phase out petrol and diesel cars, spurring on demand for electric vehicles (EVs)—and raising the question of how this demand will be met. Chinese companies are expanding into established and emerging markets for EV products and components, propelled by their access to critical minerals, production capacity, and investments in innovation. While this expansion could help accelerate decarbonization globally, it raises questions about how the EV market will develop, from circularity infrastructure and energy sources in new markets to international cybersecurity and human rights concerns. 

China’s role in the global EV and battery markets 

China has come to dominate global EV markets in both demand and supply. For demand, China is the largest EV market with 59% of all EVs globally sold there; which is expected to increase and be met by local suppliers. The government plans propose that by 2035 EVs will be the mainstream of all new vehicles sold and all public vehicles will be electrified.

Internationally, China currently produces 54% of the world’s EVs and is a major supplier of key EV components to global car manufacturers, including Tesla and Toyota. Chinese companies are gaining market share in established EV markets in the US and Europe, providing both finished products and components all while these markets continue to expand with consumer demand and new legislation from the EU. 

China’s control of critical mineral supplies required for battery production (such as lithium, cobalt and graphite), combined with its refining and production capacity, have been some of its key advantages in securing its position in the global EV market. China has begun to limit the export of key battery minerals which is expected to increase the scramble for battery minerals (previously covered by BSR) and drive up production costs.

China also has made steady advances in battery innovation that increase performance, reduce the cost of production and decrease the amount of critical minerals required, as well as taking the lead on battery-swapping models, with Chinese companies developing swapping stations globally.

Beyond established EV markets, Chinese auto companies are also rapidly expanding into emerging EV markets in India and Africa with lower priced EVs, aided by lower production and component costs. The battery swapping being expanded in China is also well suited to emerging markets where charging infrastructure is limited. For production, Chinese companies are also looking to expand beyond China. Although a recent bid by BYD to invest US$1 billion to establish a car and battery manufacturing facility in India was rejected by India citing “security concerns”.

The Push for China-free EVs 

In response to China’s dominance of the global EV market, the US is making a major pushback using human rights legislation, trade policy and tax incentives through the Inflation Reduction Act (IRA). In order to increase domestic extraction and recycling of critical minerals as well as production of batteries and battery components for the EVs, the IRA includes various tax incentives for EVs where components meet specific requirements for domestic sourcing and production.

Countries where the US has a free-trade agreement are included in this provision, however it specifically states that to qualify for tax credits battery components and critical minerals cannot be sourced from “foreign entities of concern”, starting in 2024 and 2025, respectively. The US has begun including EV batteries and other car parts in the products under scrutiny by the US Uyghur Forced Labor Prevention Act (UFLPA). Lithium production in particular has been tied to high-risk contexts for human rights in China.

Parallel regulation in the EU aimed at prohibiting the marketing of goods made with forced labor might put similar pressure on Chinese imports into the EU and the EU auto industry with impacts for companies using EVs as part of their decarbonization plans. While the EU is yet to go as far as the US in incentivizing a China-free EV supply chain, anti-dumping rumblings have been ongoing and the EU has launched an “anti-subsidy investigation” into lower-priced Chinese EVs in Europe. Many consider this both an economic and political response. There is also a growing concern over privacy, surveillance and the use of EVs to monitor citizens of each other’s nations as tensions between China and the US, UK, and EU rise.

Implications for business

Decarbonization and Grid Stability in Emerging Markets 

Affordable EVs can contribute to global climate change and mobility efforts, and support companies in their decarbonization goals, particularly Scope 3. 

This shift may also increase air quality within cities at a time when air pollution has been named the greatest threat to human health, especially in South Asia. Take India, home to 14 of the world’s 20 most polluted cities. Premature deaths due to tailpipe emissions are one driver behind the government’s goal of reaching 30% EV penetration by 2030—an ambition supported by a range of national and state-led policies and incentives, including tax benefits, subsidies, and infrastructure development.

However in the short term the rapid expansion of EVs—outpacing accompanying infrastructure and policy frameworks—brings challenges that companies need to consider.

Without widespread availability of renewable energy in emerging markets, the increase in EVs may place increased strain on power grids, and ultimately even increase non-renewable energy consumption. It also raises concerns about whether there is appropriate infrastructure to reuse or recycle the increased volume of batteries that will enter these markets. Insufficient recycling infrastructure for lithium-ion batteries (which last up to 10 years) means the sector’s rapid growth will add to extensive and toxic e-waste management burden. New rules based on Extended Producer Responsibility aim to support entrepreneurship in battery collection and recycling, which presents a huge long-term economic opportunity, reducing reliance on battery imports from China, creating jobs and potentially edtech solutions to build related skills.

Human Rights, Supply Chains and Geopolitics

Driven by geopolitics and human rights concerns, countries are using tax incentives, trade agreements and human rights legislation to counter China’s dominance of the market. These are forcing automakers to increase visibility into their supply chains and are expected to shift critical mineral mining and processing global, battery production and auto manufacturing in coming years.

The inclusion of EV batteries in the US UFLPA could disrupt EV production and imports in the US, impacting both Chinese companies and also the Western car manufacturers dependent on Chinese components. The risk of human rights violations and import-market regulations make it imperative for EV companies globally to enhance their supply chain visibility and engage stakeholders in the value chain to enhance overall transparency and sustainability practices.

An increasing number of Chinese businesses are seeking ways to collaborate and understand international regulatory requirements providing an opportunity for international business communities to engage and collaborate with Chinese businesses on these issues. This July, CATL joined the United Nations Global Compact noting the need to build its credentials on sustainability and human rights in order to access international markets that are increasingly focused on forced labor in supply chains.

Businesses need to consider the impact of these challenges on their decarbonization agenda, and take action to shape a sustainable operating context for EVs at scale, as well as make provision for disruption to the EV markets in years to come. 

Questions for business

• How dependent is your decarbonization and wider sustainability strategy on the role of EVs? What action can you take to shape a sustainable operating context for EVs at scale? 

• Have you considered the human rights impacts of fleet electrification and/or the use of EV services in all markets?

• Are you engaging your logistics providers on the sustainability issues in the EV supply chain across your geographies, paying particular attention to those with less regulation and infrastructure to support EVs?

• In the automotive industry, are you engaging your industry peers or industry associations to leverage collective action on the sustainability issues in the EV supply chain?

• In the automotive industry, are you engaging your suppliers directly to enable supply chain transparency and compliance with import regulations?

The research for this Emerging Issue was supported by students at Hong Kong University as part of our research partnership under its Common Core Curriculum: Gamechangers for Sustainable Business in Asia | HKU Common Core.

People

Erin Demarest Seglem

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Erin supports BSR’s member companies in strengthening supply chains, particularly within the consumer sector.

Prior to joining BSR, Erin was a senior sustainability researcher at Corporate Citizenship where she supported clients with climate target-setting, modeling and evaluating emission reduction measures, and conducting GHG inventories for clients across multiple sectors, including financial services, healthcare, apparel, and food and beverage. Previously, Erin has also worked with J.M. Smucker Co. on evaluating food loss and waste across their value chain and as a program manager and strategy lead for New York Road Runners, both managing special projects and overseeing race registration and demand.

Erin is currently pursuing her MBA at Bard’s Graduate Programs in Sustainability, specializing in sustainability and supply chains, and holds a BA in English from Haverford College.

Blog | Thursday October 19, 2023

Inside BSR: Q&A with Cherry Lin

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Tell us a bit about your background. Where are you from, and where are you based? What does a day in your life look like? What is your favorite hobby?

I am from Fuzhou, a coastal city in Southeast China, and currently based in the city of Guangzhou with my 6-year-old daughter. Both are capital cities in neighboring provinces, but 900km apart! Typically, I return to my hometown for the spring festival and eat plenty of street food, which reminds me of my childhood.

I moved 2000km away from my hometown for university. It was at this point that I realized that China is a vast country and there are so many places to explore, and people to meet. I still have several close friends from various cities across China, and we continue to plan trips together. 

A day in my life consists of lots of time with my daughter. We enjoy playing board games, doing DIY, and playing music. I also love wandering around new cities and observing how local people go about their day-to-day lives. I’ve walked around Paris, Hanoi, Yangon, Melbourne, Hong Kong, and several other cities in China.

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

During my time at college, I took on various volunteering roles, including supporting autistic children and helping disabled elderly people to seek assistance when needed. While volunteering, I was given a painting as a gift from a visually impaired boy who was learning the piano. I felt inspired by the communities’ strength and determination in the face of adversity. 

Before joining BSR, I worked for a state-owned company where I trained migrant workers. I got involved in sustainable business in 2011, when I joined BSR’s HERproject as the China country coordinator, with real passion and belief in my work. Since then, I’ve continually felt driven to work on gender equality and women empowerment across the supply chain. 

I am currently working as a manager at RISE, a collaborative to support collective action at scale for the benefit of women workers and push for gender equality in global supply chains. I am the country lead of China and the global lead of Quality assurance at RISE. My work includes working with global teams, brand contacts, and implementing partners across different countries, to expand the presence of RISE and maintain program quality.   

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

There are a lot of interesting programs at BSR. I traveled to Myanmar four times from 2018-2019 for a program focused on women’s empowerment at various supply chain textile factories. My role involved supporting local NGOs in managing gender issues with supply chain factories. It was a full week workshop, and I was impressed by the innovative, energetic and fun approach of the young trainers at these NGOs. I also traveled to Cambodia in late March this year and spent some time with trainers from local NGOs over lunch talking about engaging younger workers via training. It’s always fun and inspiring meeting and working with these teams. 

In this role, I’ve worked with various groups and stakeholders; including workers, managers from factories and suppliers, international brands from different industries, as well as various local NGOs across the globe. 

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

I plan to continue working on gender issues, I am also very interested in inclusion and diversity work. As a mother of a little girl, I hope my daughter can live in a world where her potential is not limited by gender, with equal resources and opportunities, and can feel confident to seek help when issues arise.  

I’ve been following public news reports in China around gender-based challenges including unpaid care work and sexual harassment, as well as the “glass ceiling” for a woman’s career. I have seen some progress in public awareness of the gender-based challenges in China. This proves that continuous efforts made to empower women and shift the social norm will eventually bring a lasting outcome.    

What are you looking forward to in 2024? 

Covid restrictions have made in-person contact nearly impossible over the past 3 years, and it was even more challenging as I work from home. I’ve started to resume in-person connections with team members and stakeholders. In March of this year, I traveled to Bangladesh and Cambodia and met team members from other cities in China for workshops in April, and this month we are planning in-person gatherings with brand contacts.