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Blog | Thursday July 17, 2025

Strengthening Supply Chain Sustainability: Eight Dimensions for Responsible Business

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Impacting billions of livelihoods and ecosystems around the world, value chains are a critical lever for business action and progress on climate and sustainable development. The pandemic, geopolitical tensions and wars, extreme weather events, and increasing and then diverging corporate sustainability regulations are just some of the disruptive events that have impacted the daily realities of supply chain management professionals and communities along the value chain. We have reached a point where the need for action is ever more urgent, yet the context for decisions and investments is growing increasingly more complex and seems to be in a constant state of flux.   

In these chaotic times, it’s imperative to take care of the fundamentals (e.g., supplier relationships) that enable supply chain resilience and efficiency. It's impossible to accurately predict how current trade tensions will play out or what crises will come next; however, strong foundations and enduring value chain relationships will best equip companies to navigate these challenging times.  

Informed by 30+ years of working with companies on downstream and upstream impacts across industries, our freshly updated Value Chain Leadership Ladder outlines how to advance business leadership in value chain sustainability. It is designed to help companies assess the maturity of their value chain sustainability processes and programs across eight fundamental dimensions, which enable solid supply and/or value chain management and sustainability progress. Performing the assessment helps evaluate the extent to which companies have a robust program in place and informs key actions in each of these areas.  

The Ladder’s internal dimensions focus on actions that companies can take within their own organizations: 

1. Value chain knowledge and understanding: Knowledge is power. Having a better understanding of your value chain and the people, organizations, relationships, ecosystems and dynamics within not only supports effective and context-specific sustainability action, but also enables companies to anticipate the implications of shocks (e.g., tariffs, climate events) and allows for effective contingency planning. 
2. Strategies and processes: Increasing integration between companies’ sustainability and supply chain strategies ensures they are actively addressing material business risks (e.g., supply security) and capturing opportunities for sustainability-related competitive advantage and innovation. 
3. Commercial terms and buying practices: Approaching these with principles of fairness and shared value positions companies for collaborative relationships that (i) can support navigating value chain volatility and (ii) don't undermine business partners’ ability to make investments that support their buyers (e.g., investments in innovation, in excellence, and in addressing sustainability risks to which buying companies are also exposed). 
4. Governance and management: Appropriate oversight and institutional capacity and incentives are essential to achieve a company’s supply chain and sustainability objectives. 

The external dimensions highlight how companies can pursue progress on sustainability goals beyond their own operations: 

1. Business partner engagement: Considerate and collaborative supplier and business partner engagement is a critical path for developing innovative sustainability solutions, mitigating sustainability and human rights-related risk, and conducting due diligence. 
2. Value chain worker and community engagement: Meaningful engagement with workers and communities along the value chain can help companies anticipate emerging issues, address long-term business risks (e.g. low farming incomes deterring young farmers), and identify and address serious human rights violations. 
3. Collaboration: Working collectively can help deepen and amplify progress on mutual sustainability goals. By sharing resources and knowledge with each other, companies can solve business-critical risks together that they might not be able to address alone. 
4. Reporting: Disclosure on various topics, whether specific (e.g., forced labor) or broad (e.g., sustainability and due diligence measures), remains and is becoming more important for regulatory compliance in many countries. Furthermore, decision-useful reporting helps investors and other business-critical stakeholders understand and gain confidence about the company’s value chain context and management of related issues.  

Recommendations for Companies 

Sustainability and supply chain leaders are operating in a turbulent context. With new regulations, growing interest in responsible value chains, and continued instability, companies need to take a more collaborative approach to supply chain sustainability and supplier engagement, stepping away from expensive, data-intensive practices. With these challenges in mind, the Ladder encourages companies to work in these ways:  

1. Expand from “supply chain” to “value chain.” Companies can consider impacts on society and the environment all along the value chain, reflecting a growing recognition of the salience of downstream impacts and their inclusion in due diligence regulation. The Ladder enables a more dynamic assessment as companies/industries vary in where impact is greatest (upstream/downstream). 
2. Elevate the importance of solutions that are co-created with and led by suppliers and workers. While it’s been long acknowledged that partnership between suppliers and workers enables greater and more sustained impact, sustainability solutions have too often been centered on buying companies’ priorities, rather than leveraging the skills and ideas and catering to the needs of the groups who are most impacted. Companies can provide the most impacted people with a priority role in solutions development and take a collaborative and enabling role in co-creation and solutions led by relevant groups.    
3. Reinforce balance between data, measurement, and context. With the proliferation of digital tools, standards, and regulation, it is even more urgent to avoid overburdening suppliers with data collection. Companies need to be mindful of the context for suppliers, business partners, and workers; to focus on data that is meaningful and useful; and to recognize its limitations.  
4. Maintain responsibility when increasing agility. Agility is the watchword as 2025 continues, but it comes with implications for human rights and sustainability as supply chain and sourcing regions shift (e.g., loss of livelihoods). The Ladder encourages companies to integrate sustainability principles in making and implementing decisions, with due diligence and responsible onboarding and exit as key frameworks to follow.   

When companies are understandably forced by recent events into reactive decision-making, they may fail to consider the long- or medium-term implications for their relationships with suppliers and impacts on communities. Focusing on the fundamentals of value chain management, supported by tools like the Value Chain Leadership Ladder, can help companies move away from reactivity and into proactive, less transactional efforts.  

Interested in learning more about addressing today’s global challenges in your company’s value chains?  Contact BSR’s Supply Chain team to understand the strengths and gaps in your current supply chain approach. 

People

Alexa Roccanova

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Alexa works with the Marketing and Communications team, developing editorial and social media content, marketing materials, and other digital communications. 

Prior to joining BSR, Alexa managed communications, partnerships, and campaigns at the advocacy organization, Remake, where she developed high-impact content, resources, and multi-stakeholder initiatives to advance labor rights and climate justice in the global garment industry. She also worked with the international legal consultancy, Beyond Human Rights Compliance, to develop a technical guidance for fashion companies on meaningful stakeholder engagement. She has worked closely with frontline worker communities, civil society organizations, global apparel companies, and government agencies to facilitate cross-sector collaboration on intersectional sustainability solutions. 

Alexa holds a Master’s in Environmental Policy and Sustainability Management and Bachelor’s degrees in Fashion Design and Literary Studies from The New School.

Blog | Thursday July 10, 2025

How Foresight Can Enhance Strategic Resilience in a Time of Turbulence

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Navigating a New Reality 

Over the past year, the world has entered a turbulent new era—marked by a set of abrupt shocks that are intersecting with, and complicating, enduring, long-term transformations. Sudden disruptions, like unpredictable tariffs and rapid AI advances, are colliding with longer-term shifts, such as intensifying climate impacts and diversifying societies, evolving faster than conventional strategies can adapt. 

In addition, growing alignment across short-, medium-, and long-term sustainability considerations has now fractured. For example, just a few short years ago in the United States, imperatives to act on DEI were increasingly aligned across all time horizons. The near-term political pressures to act, galvanized by movements such as Black Lives Matter, aligned with emerging policy directions as well as the growing diversification of society. Now, however, near-term political backlash against DEI in the U.S. may run counter to medium-term policy expectations or long-term demographic trends. Businesses must increasingly grapple with such tensions and tradeoffs across time horizons rather than planning in linear trajectories. 

At the same time, businesses are facing parallel fragmentation across geographies and jurisdictions. Where there was once a push toward global alignment—on climate disclosure, human rights expectations, and sustainable finance regulations—there is now a growing divergence. The result is a fractured landscape in which a company’s sustainability strategy may be celebrated in one market and penalized in another. 

Building Strategy for a Fragmented Future 

This is not just a more complex environment—it’s a different kind of strategic terrain, one that requires global companies to strategically navigate across divergent politics, timelines, and legal regimes.  

In this context, sustainability strategy must be adaptive rather than static. Long-term success will require companies to combine north-star vision with short-term agility—and to make regular, deliberate choices about how to navigate the tensions between them. 

This is where strategic foresight becomes essential. Foresight isn’t about making predictions—rather, it is a structured way of thinking about the future that can help companies make better decisions in the face of uncertainty. By understanding key drivers of change, stress-testing plans against divergent future possibilities, and articulating a guiding vision, foresight supports organizations in anticipating what’s coming, adapting to volatility with integrity, and staying grounded in long-term purpose. 

Companies should embed foresight into sustainability strategy across three time horizons: 

1. Short-Term: Adapting Without Losing Focus 

In today’s volatile environment, abrupt shocks—such as political pushback or regulatory reversals—can create reactive mindsets. Strategy should not change with the headwinds, yet also can’t ignore the current turbulence. The challenge is to discern what is transient versus what will have lasting impacts, and reconfigure the path to long-term goals. 

Structured foresight exercises can help teams identify where short-term developments create new risks, tradeoffs, or opportunities. These conversations can help surface the dilemmas organizations will need to navigate and help avoid reactive decision-making that undermines long-term vision. 

One way to explore short-term volatility is through future simulations—facilitated role-playing exercises that allow teams to rehearse responses to plausible near-term disruptions, such as regulatory shifts, AI governance dilemmas, or political backlash. These sessions help surface potential points of tension across functions, identify ethical and legal dilemmas, and clarify where contingency plans may be needed. 

2. Medium-Term: Preparing for Trends and Uncertainties 

In the rush to respond to short-term uncertainty, sustainability and business leaders should be wary of taking their eye off the horizon and losing sight of what’s still to come. The medium-term will be shaped by clearly discernible trends (established patterns of change with observable directionality over time), such as intensifying climate impacts, as well as countertrends, such as the anti-ESG backlash. It is also characterized by deep uncertainty around issues such as geopolitical relations and technology deployment. Strategy must aim to be both resilient and adaptive. 

Analyzing trends, countertrends, and emerging issues is an important way to help clarify the direction of travel. Here, it is particularly important to map out the collision of trends and countertrends, as well as their geographical specificities. What may look chaotic on the surface is often the result of coherent drivers of change interacting in complex fashion.    

For deeper uncertainties, the use of future scenarios can enable teams to develop resilient strategies that can succeed across a wider range of possible futures. Scenarios are structured, narrative-based depictions of multiple plausible future operating environments. They are not predictions, but tools to explore uncertainty, challenge assumptions, and stress-test strategies against divergent outcomes. 

Both trend and scenario analysis are vital. Using them together enables strategy teams to stress-test strategic priorities, right-size ambition levels, and build agility and flexibility into how they carry out their strategies in a world of accelerating change. 

3. Long-Term: Vision as a Decision-Making Tool 

Even amid turbulence, long-term vision still matters—and arguably more than ever. A strong sustainability vision should not only inspire but serve as a decision-making tool: guiding tradeoffs, prioritizing investments, and defining red lines that help the company act with clarity and consistency during moments of upheaval. 

Foresight frameworks can help companies articulate a transformative vision of the future and identify various innovation pathways to achieve it. For instance, Three Horizons, a foresight tool for navigating long-term transformation, can help organizations understand the current system (Horizon 1), explore transitional innovations (Horizon 2), and articulate a future vision aligned with emerging needs and values (Horizon 3). Reconnecting with that Horizon 3 vision, even (or especially) in moments of turbulence, helps organizations stay on course while remaining flexible about the route. 

Strategy for a Time of Transition 

The road ahead will be defined by rapid change and disruption, but it will also be shaped by the choices companies make today. 

By embracing foresight, companies can strengthen their ability to anticipate and adapt without losing sight of who they are and what they stand for. This is how futures thinking can support resilient, purpose-driven sustainability strategy and help business lead through crisis, rather than simply endure it. 

Blog | Wednesday July 2, 2025

A Renewed Approach to Sustainability: Five Building Blocks for Business

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As we reach the midway point of 2025, we’re experiencing yet another year of profound change for the world of business. At the start of the year, I laid out Ten Big Questions Facing Sustainable Business Leaders in 2025. Few of these questions have been answered definitively—and in fact, even more questions have emerged. 

Some answers, however, have come to the forefront and can help to guide sustainable business leaders as we continue to navigate an extended period of ongoing and intense change. 

Despite the uncertainty, some important clarity is emerging about how to reposition sustainability, not only to survive amidst challenge, but also to provide a path forward for business more generally. Through discussions with my BSR colleagues, our member companies, and the wider community, a picture of how to move forward is becoming clear:   

• Sustainable business priorities, and the supporting narrative, need to change and put people more firmly in the frame. The political and policy pushback against sustainability in many parts of the world is happening because our agenda does not resonate with the general public and is subject to political attacks, which often distort what sustainable business is actually about. The finer points of net zero are no match for rising energy bills. Commitments to diversity can easily be caricatured at a time when people are experiencing anxiety about their jobs, and rising generations have little hope that they will live better than their parents. 2025 may be remembered as the year that we “changed the sustainability narrative” and reclaimed the argument that sustainability delivers human progress. This will only work if people are put front and center, if we use language that real people use, and if we address peoples’ needs in 2025, not 2030, let alone 2050. In September, BSR will publish a reframing of the sustainable business agenda, and we hope that provides both inspiration and an invitation to dialogue. We invite you to subscribe to BSR’s newsletter to stay informed. 

• The sustainable business community needs to be more fully prepared for the coming AI revolution. It seems clear from interactions with our member companies that it is very early days when it comes to making sense of how AI will shape, and likely define, the next phase of sustainable business. Four key questions will come to define how well—and how responsibly—companies are deploying AI. First, and building on extensive work BSR has conducted with member companies in the tech sector and beyond: is AI being deployed in a way that respects human rights and privacy? Second, will companies ensure that the energy needed to support growth in AI does not produce a U-turn on emissions, and will companies capture the potential for AI to reduce emissions and nature loss? Third, how can companies deploy AI in a way that does not lead to the massive job loss that Anthropic CEO Dario Amodei is predicting? Finally, will companies make better use of AI for managing their sustainability actions, for example by automating data collection and communication? BSR will continue to offer ways for companies to understand and act upon both the opportunities and dilemmas presented by AI. 

• Resilience is growing more important by the day and should be a higher priority for companies. Even as the drive to keep emissions under control remains crucial, resilience will be increasingly important. This is a close cousin of traditional enterprise risk management and business continuity. A robust approach to resilience—which very few companies have yet embraced in a comprehensive way—will be considerably more important for the foreseeable future. There are aspects of resilience that play to the unique strengths of sustainable business leaders. A strong approach to resilience depends on collaboration, foresight, understanding of stakeholder views, and a synthesis of social and environmental and policy matters. All this provides an important pathway to reinforcing and reconceptualizing the business value of sustainability, and it also speaks to very clear and present needs of people and communities. By emphasizing foundations of strong sustainability governance through thoughtful leadership and strategic oversight, companies will be better positioned to navigate turbulence, build resilience, and create long-term value.

• The relative pullback of regulation is an opportunity to refocus on building rather than complying. The steady advance and convergence of sustainability regulation has largely stalled, and in some places, gone into reverse. On balance, this is an unfortunate development, as we lose—for now—some of the clarity and consistency that was driving some forms of action. This period, though, also provides some benefits. We hope that the resources that were dedicated to validating data can be directed back to achieving the progress that the data represented. We also know that compliance creates a floor for companies, but has never been the real driver of sustainability, innovation, or partnership, let alone an ambitious vision. Let us take advantage of this period to recommit to the creative, forward-looking mindset that has always been the best of sustainable business.    

• The business voice, while currently muted, needs to be heard. Finally, despite many evident risks in a challenging political environment, it is time for business to speak up loudly and clearly, and use its influence. If we were to rank the top ten sustainability clichés for 2025, “we are still taking action, we’re just not talking about it” would be at the top of the list. The business voice has been stilled. We know from speaking with many of our members that this has confused, and at times enraged, employees. If policymakers are hearing only from ideological opponents of sustainable business, we will not create the policies we need. And if business leaders do not regain their footing when it comes to advocating for rule of law, open societies, and respect for people, the business environment will degrade. So yes, consider carefully how to speak publicly, but not whether to do so. 

While we don’t yet have clear answers to the 10 questions we posed at the start of the year, we do see five building blocks to a remade approach to sustainable business that will meet the present moment and convey value for business, people, and communities. Sustainable business is on the right side of history. If we look back in 2030 and see that we took up today’s challenges to reinforce value, reorient priorities, and refresh our narrative, we will have made the most of this moment.  

Blog | Thursday June 26, 2025

Material, but Not Always Strategic: Why the Difference Matters

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The context for sustainability strategies has become increasingly complex as businesses face changing geopolitical and trade dynamics, growing scrutiny of sustainability initiatives, and a shifting regulatory environment. Amidst these developments, sustainability strategies require vision, clear focus, strategic foresight, and strong alignment with business value drivers and the company's overall strategy, while delivering societal value and impact. If these factors are in place, a clear and simple narrative, sharing how the company is addressing societal impact alongside business value, can easily follow and is essential to give meaning to employees as well as external actors, including customers, investors, suppliers, communities, and affected stakeholders.  

Make Materiality More Strategically Useful  

A materiality assessment has historically been the most common entry point for sustainability strategies. Materiality’s origin lies primarily in its role as an exercise to inform disclosure. However, these assessments remain strategically valuable as they help define the sustainability topics, risks, and opportunities impacting the company, and the company's most significant impacts on society and environment.  

Since conducting a double materiality assessment (DMA) is resource intensive, it is essential that companies leverage the investment in the exercise to inform strategic decision-making. This includes asking your internal and external stakeholders additional questions on various topics, including what they feel is strategic for the business priorities; how business value drivers, such as revenue growth and operational efficiency, link to or rely on impacts on people and the environment; and how they feel issues may evolve over time. A good DMA aligns with a company’s existing enterprise risk management (ERM) process, considers other assessments that have already been conducted, and reflects the company’s business strategy and governance processes. Opportunities and positive impacts identified through the DMA should be connected to the core business value drivers. They should also feed into strategy setting or refinement, including goals, targets, programs related to strategic focus areas (such as initiatives on climate or inclusive business), and accountability on those topics by leadership.  

If conducted comprehensively, a DMA can serve as a strong foundation for shaping a focused and credible sustainability strategy aligned with stakeholder expectations and long-term business goals. A materiality assessment should not be perceived as a "compliance-only" exercise; rather, its results should be complemented with additional insights, such as key strategic business differentiators compared to other companies, to move from "compliance requirement" to "core strategy informant."  

Distinguish Strategic Issues from Material Issues  

When setting sustainability strategies, companies often fall into the trap of aggregating all material issues into the broad bucket of “ESG” and calling it a strategy. More tactical insight is needed to refine the list of material issues to a list of strategic issues. This refinement process should draw from the overall sustainability vision, the business strategy, and strategic foresight of the macro context (which includes global trends, economic shifts, regulatory developments, climate change, geopolitical dynamics, social movements, and technological innovation). 

For example, while any robust financial materiality assessment will ground itself in core business drivers, a topic’s current or future performance does not determine whether the topic is material. Gaining a greater understanding of the direct links between business strategy and performance with material topics is crucial to creating a sustainability strategy that is embedded in and supportive of business strategy. Here, insights such as plans on future product or market growth, or innovation priorities, may be helpful. Furthermore, customer insights and employee surveys show us that some material issues, like product safety and workplace safety, may resonate more with customers and employees since they align with business values like integrity, quality, safety, ethics, longevity, and accessibility. 

Another key consideration is the impact of macro conditions, like geopolitical volatility, market shifts, and plausible future developments. These may suddenly shift business strategy or sustainability impacts, risks, and opportunities. Strategic foresight can be used to better understand current volatility and identify potentially unforeseen risks or opportunities, helping to root strategy in longer-term transformations, while navigating and adapting to short-term shocks.

As companies have different approaches of setting a threshold for materiality (aligned with a company’s enterprise risk framework or not), this should also be considered when reviewing the sustainability topics in the context of strategy. Together, with a clear understanding of impacts, all these components should steer a company toward its unique position and clear narrative on business and societal value.    

This process of designing or refining the sustainability strategy could also uncover topics that are material but not necessarily strategic. For example, water pollution may be a material topic for a company with water use and discharge in its operations or value chain due to its clear environmental impact and potential financial and reputational risk, requiring reporting under the CSRD. However, this does not mean that it is a strategic topic or driver of long-term value and differentiation for this company, and it could be addressed through robust environmental management systems rather than as a strategic priority.  

On the other hand, sustainable product innovation (such as co-branded eco-friendly packaging) may be strategic for market positioning and future consumer appeal, but if these initiatives do not present significant risks, impacts, or financial implications, they may not be classified as material in a DMA—meaning they are managed internally, but are not subject to mandatory reporting.  

Ensure That Material Issues Are Still Addressed and Managed 

Leaving a material topic outside of your business or sustainability strategy does not necessarily mean it will be neglected. There are several ways that issues can continue to be addressed and managed without declaring them as the most strategic issues. For example, the issue of pollution can be addressed through management agendas, policies, and procedures. Joining or initiating a collaboration among peers is another way to show commitment and enable progress, especially for more nascent or systemic issues such as plastic pollution. It is helpful to distinguish between issues that are strategic, which require management, and issues that require reporting, and then determine the required actors and audiences for each of these issues.   

At a time when sustainability and business strategy are becoming increasingly intertwined, companies must go beyond compliance and use materiality as a lens for strategic clarity. By distinguishing between what is material and what is truly strategic, businesses can focus their efforts where they matter most, increasing impact, resilience, and long-term value.  

Interested in translating your company’s materiality insights into clear, credible strategies that meet stakeholder expectations? Reach out to BSR's Business Transformation team for more information on building business resilience and collaborating with peers to create systemic change.

Reports | Tuesday June 24, 2025

Reproductive and LGBTIQ+ Health Access

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As access to reproductive and LGBTIQ+ healthcare becomes increasingly fragmented across the United States, companies are navigating a growing set of challenges, with implications for workforce well-being, data governance, service delivery, and operations. An area once considered peripheral to business needs to be an influential factor in business strategy. 

Businesses are providers and stewards of access through benefits, technology platforms, consumer touchpoints, and policy engagement. As legal uncertainty deepens and enforcement expands, companies are being called to take a more deliberate approach across their value chains. 

The report, Reproductive and LGBTIQ+ Health Access: Emerging Risks and Responsibilities, offers practical guidance for companies responding to this shifting landscape. It supports efforts to reduce harm, align internal systems, meet evolving stakeholder expectations, and promote equitable access.  

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The guidance includes targeted insights for industries with heightened exposure and influence, including financial services; technology, travel and hospitality; pharmaceutical, biotech, and pharmacy sectors; retail; and energy, extractives, transport, and industrials.

Click on the image to view a larger size.

The following action areas offer a starting point for business engagement: 

• Understand how care access is shaped by operational and strategic decisions 
• Build internal systems that can anticipate change and respond consistently 
• Reevaluate physical footprint and service infrastructure through an access-informed lens 
• Collaborate across sectors to promote coordinated and inclusive approaches 
   

Reports | Wednesday June 18, 2025

Advancing Forced Labor Supply Chain Data Standardization

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As businesses and public sector actors work to prevent, detect, and address forced labor, collecting data on risks and indicators can be complicated due to a lack of clear guidance and standardization. What key challenges do companies face, and how can data collection approaches be simplified to inform meaningful action? 

Two new reports from BSR Collaborative Initiative Tech Against Trafficking (TAT) shed light on how public and private sectors collect forced labor data and highlight opportunities to drive greater standardization, based on a year of research and collaboration. The first report, Standardizing Data Collection on Forced Labor: Benchmark of Practices and Gap Analysis, examines practical examples in collecting forced labor data points across private sector value chains. The second publication, Governments as Intermediaries of Forced Labor Data, summarizes insights from a policy dialogue series with government and intergovernmental stakeholders, which TAT conducted in 2024.

Access TAT's press release to learn more about these reports and the initiative's next steps on forced labor data standardization. 

Blog | Wednesday June 11, 2025

Extreme Heat, Floods, and Supply Chain Shocks: How to Future-Proof Your Manufacturing Operations

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Blog | Thursday June 5, 2025

Four Tips for Authentic Business Leadership During Pride 2025

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This June’s Pride celebrations will occur as LGBTIQ+ equality advocates and inclusive business practitioners confront ongoing challenges to hard-earned progress that have raised the stakes of private-sector engagement.

This is especially true in the U.S., where federal research programs benefitting LGBTIQ+ people have already been cut by nearly a billion dollars. The future of preventative health care programs supporting LGBTIQ+ people is at risk, given longstanding efforts to dismantle the Affordable Care Act, and legal rights and protections related to dignity, safety, and healthcare of transgender people are being litigated in U.S. courts.  

Some companies have limited their public communications or otherwise ended voluntary LGBTQI+ programs, including philanthropic grants, event sponsorships, and promotion of voluntary performance standards, efforts that were increasingly commonplace prior to the recent resurgent wave of anti-LGBTIQ+ political advocacy. Furthermore, social media campaigns driven by conservative “influencers” have undercut some business relationships with their core consumers, attacking brands for their inclusive advertising and/or retail choices. Special interest groups have instigated legal challenges to business’ DEI programs, creating unfavorable media attention and leading to uncertainty on company commitment to building organizations, products, and services that can meet the needs of their diverse consumers and stakeholders.  

Still, there’s evidence that LGBTIQ+ equality and inclusive business practices remain a business priority even as some companies scale back. Participation in the Human Rights Campaign’s Corporate Equality Index increased over the last year in spite of some high-profile withdrawals from the effort in the fall. More and more, business shareholders have voted to uphold diversity programs and underscore the importance of inclusion despite recent legal flashpoints and an effort by federal officials to cripple these programs through executive orders and allegations of illegality. Though company sponsorship of Pride festivals is expected to lag overall, a majority of corporations have recently reported little to no change in their expected participation.

In this landscape, business actions on LGBTIQ+ equality efforts appear to be fueled less by sector-wide alignment and more by each company’s unique operational posture and the media/risk tolerance of its leaders. It is understandable, then, that many business practitioners, including communication, inclusion, human resources, and government affairs leads alike, may be questioning what current expectations or best practices they might advance within their company. Considering the risk-averse environment in which many business practitioners may find themselves, we share four practical tips for LGBTIQ+ engagement for the 2025 Pride season and beyond.

1. Celebrate LGBTIQ+ Pride, even if it means doing so less publicly or with fewer resources. Like other cultural, civic, and social commemorations, LGBTIQ+ Pride is an opportunity for businesses to underscore its inclusive values and appreciate broader business success in the context of the contributions of its diverse leadership and workforce. It also offers businesses a chance to showcase positive impacts in communities where they are headquartered and operate more broadly. This remains true despite current sociopolitical headwinds. Indeed, even some companies that have made headlines for reported cuts to these engagements have privately indicated their intent to support Pride observances through more local sponsorships, events, and gatherings, yet with less budget, public fanfare, or formality. Ultimately, your company might choose to observe this Pride season with fewer resources and with greater awareness of potential scrutiny and/or worker safety risks. Still, these concerns should not preclude your company and your workers from engaging in lawful activities that help promote a culture of inclusion and positive impact, even if such activities are tailored to your specific circumstances and operational footprint.
2. Share updated communications and policy materials, acknowledging your company’s responsibility for ensuring a workplace free from LGBTIQ+ discrimination and harassment. Include relevant global and local policies that guide your company’s efforts to uphold that responsibility. Your current employees and teams likely include LGBTIQ+ individuals or individuals who have loved ones who are directly impacted by social, legal, and cultural debates and/or shifting policies focused on LGBTIQ+ equality. Via diversity, legal, or communications officers, ensure clarity about your company’s nondiscrimination and harassment expectations and policies, as well as the processes/infrastructure that are in place to manage potential issues. The UN Standards of Conduct for Business Tackling Discrimination Against LGBTIQ+ People offers guidance for global businesses navigating wide-ranging expectations, and sometimes conflicting jurisdictional laws, for LGBTIQ+ workplace, marketplace, and community standards. 
3. Invite leaders of regional/local business headquarters and workforce volunteer coordinators to uplift local direct service/volunteer organizations providing general support to LGBTIQ+ workers and their families in communities touched by your business’ operations. Data from past few years, including the Association of Corporate Citizenship Professional’s Annual CSR Insights Report, has repeatedly indicated that employee volunteerism and issue-focused pro-bono engagement is both a norm and increasing throughout the private sector. Just as donation drives like Giving Tuesday raises billions in annual donations to nonprofits around the globe, Pride is a great opportunity for businesses to highlight employer benefits, including paid time-off for volunteerism, matched donations, and other community-sponsored activities that may benefit LGBTIQ+ community members, including your company’s workers and their families. Indeed, some of your workers may be especially keen to find volunteer activities or donation drives given the current climate. Driving awareness for such opportunities through regional/local leaders who may be able to share vetted information may be a great way to ensure your company enables its teams to align their efforts with local dynamics in place of overcompensating for broad-based concerns that may be best navigated at the corporate level.
4. Create informational resources that can help address how your company may respond to various LGBTIQ+-related cases expected from the U.S. Supreme Court in the coming weeks. In the coming weeks, several Supreme Court decisions are anticipated on litigation that will directly/indirectly affect LGBTIQ+ individuals and families. From national coverage of preventative care treatments, including HIV and breast cancer medications, to the scope of certain healthcare programs available to transgender youth, some cases may lead to questions about the consistency or coverage provided in employee benefits and healthcare plans. Here, your company’s human resources team might host or commission an informational webinar, develop FAQ documents, and/or establish a small team/individual as the main point of contact for inquiries on any legal changes affecting LGBTIQ+ workers. 

There is a lot of room for ambitious leadership for business engagement on LGBTIQ+ equality efforts, not only in the U.S. but globally as well. For more information on how your company can support LGBTIQ+ workers and communities, please reach out to BSR’s Inclusive Business team and explore the team’s latest insights on the BSR Member Portal.

Blog | Wednesday June 4, 2025

Advancing a People-Centered Approach to Sovereign Debt

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Due to several factors, including the rapid increase of global interest rates, depreciation of local currencies, higher risk premiums, among others, many developing countries, particularly developing economies with the weakest credit ratings, are unable to fulfill their financial obligations to external creditors, sparking a “silent debt crisis” and leading to default, restructuring, and the requirement to refinance about US$60 billion in external debt annually. This means allocating twice as many resources to servicing public debts while diverting scarce resources away from socioeconomic development. In the recent World Bank Group Spring Meetings, the IMF called for the urgency in dealing with complex trade-offs between increasing sovereign debt, slower growth, and new spending pressures. Following a decade-long sovereign debt market boom, global public debt is expected to rise by an additional 2.8 percent of GDP by 2025 and to reach 100 percent of GDP by 2030. 

This financial crisis is also a human rights crisis. While sovereign debt can help fund sustainable development, excessive public debt and high interest rates burden developing countries. By 2023, 3.3 billion people lived in countries spending more on interest payments than on critical public expenditures including 54 developing countries that allocated over 10 percent of government revenues to interest payments, outpacing growth in critical public expenditures, such as education, health, and other human rights-related expenditures. At the Spring Meetings, participants emphasized that growth must translate into better livelihoods through effective fiscal and monetary policies, transparency, and good governance.

This is key for private creditors, who own 61 percent of developing countries’ debt, and whose lending terms are more volatile and expensive than concessional financing. Private creditors have also financed repressive regimes responsible for severe human rights violations. This represents a twofold problem for responsible finance because sovereign bond investors may: 

• Restrict governments’ ability to deliver human rights by demanding lending conditions mostly favorable to creditors, such as higher interest rates and a lack of concessions in times of financial difficulty, or irresponsible debt restructuring, and/or;  
• Finance governments that systemically violate human rights and perpetrate crimes against humanity.  

While countries have the ultimate duty to protect human rights, investors can impact human rights and have a responsibility to respect them in their operations and value chains. Yet the UN Working Group on Business and Human Rights finds that many investors fail to connect human rights standards and due diligence with responsible investment practices. The PRI (Principles for Responsible Investment) adds that few sovereign debt investors recognize how their investments impact human rights or the resulting material risks to their portfolios.  

While some sovereign bondholders set human rights expectations for debtors and engage governments on issues like deforestation impacts on Indigenous Peoples, the majority fail to do so. This is due to several challenges, including perceived encroachment on sovereignty, limited leverage compared to corporate stocks and bonds, and potential reputational backlash from cutting government funding.

When governments can no longer afford interest payments, debt restructuring agreements may lead to further cuts in spending on essential services for the population, exacerbating socio-economic inequalities and undermining human rights. A study of 19 sovereign debt restructurings in 13 countries (Barbados, Belize, Chad, Côte d’Ivoire, Ecuador, Grenada, Greece, Jamaica, Mongolia, Mozambique, St Kitts and Nevis, Seychelles, and Ukraine) found that investors often ignore the human rights situation in debtor countries during negotiations, requiring countries to make financial decisions that may limit their ability to meet human rights obligations.  

Despite these findings, the UN Guiding Principles on Business and Human Rights (UNGPs), Organisation for Economic Co-operation and Development‘s guidance on responsible business conduct for institutional investors, and EU-wide regulations outline processes for investors to respect human rights. In turn, the 2011 UN Guiding Principles on Foreign Debt and Human Rights focus on debt repayment and countries’ fiscal capacity to uphold human rights, urging lenders to conduct due diligence to ensure that the loans do not impair the borrower’s ability to fulfill human rights. These provide the foundation for investors to embed human rights considerations into their strategies and more effectively account for the implications of their sovereign investments. 

Recommendations for investors 

BSR recognizes the challenges sovereign investors face in addressing human rights in their sovereign bond portfolios. BSR encourages investors to take the following steps to align investment practices with the UNGPs and other relevant human rights standards:  

1. Embed human rights in investment practices. This involves integrating human rights considerations into investment policies and processes, publishing a human rights policy, and communicating expectations to bond issuers and affected stakeholders.

2. Assess the country’s context and human rights profile before investing and continuously thereafter, including during debt restructuring negotiations.

• Understand the debtor’s human rights performance, the strength of the rule of law, and the socio-economic context. Use credible human rights indicators and data from reputable sources like the UN’s Universal Human Rights Index and the Human Rights Measurement Initiative while seeking input from affected stakeholders.
• During debt restructuring, assess how negotiating positions may impact the debtor’s capacity to meet human rights obligations and avoid exceeding the human rights debt tolerance threshold. 

3. Use leverage to influence behavior changes among debtors. While sovereign bondholders have less influence than equity investors, multiple opportunities exist:

• Raise human rights considerations with governments,emphasizing the importance of tax and social spending, and strong democratic institutions attracting foreign investment. Creating lending conditions tied to sovereign human rights performance may be possible.  During the Spring Meetings, participants highlighted the need for transparent, accountable sovereign debt decisions and empowering parliaments, civil society, and citizens to align borrowing with public interest.
• Participate in debt relief programs and restructuring negotiations in good faith, including through a formal social dialogue. Avoid predatory or obstructive behaviors that limit governments' efforts to fulfill human rights obligations and seek debt agreements that are financially sustainable and respect human rights cognizant of the country’s context (e.g., see proposal under the Debts of Vulnerable Economies Fund Principles).  
• Influence and collaborate with peers to increase leverage over debtor countries. Communication between asset owners and managers regarding their expectations of debtor countries will raise awareness of this important topic in the industry.  
• Consider taking a human rights-based approach to divestment if the leverage methods discussed above are not effective. Sovereign investors would need to consider the potential negative impact of divestment on human rights within the country. 

Given the complexities of sovereign debt investment, it is important to anticipate regulatory and stakeholder expectations, including national and regional legislative developments in the EU and elsewhere that seek to ensure responsible business and investment strategies uphold human rights. Please contact us to learn more about BSR’s approach to helping your company navigate human rights and sustainability opportunities and challenges associated with sovereign debt.