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Blog | Tuesday December 14, 2021

Race and Ethnicity: Civil Society Expectations for Business and Recommendations for Company Action

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More than a year ago, the Black Lives Matter movement spurred companies into addressing long-standing race and ethnicity issues and developing or stretching their diversity, equity, and inclusion (DEI) goals.

However, most of these initiatives have focused on the US, and companies are struggling to address these issues in other countries. Nevertheless, racism and ethnic discrimination are global problems, from racist abuse of England’s Black football players to sexual violence against Indigenous women in Argentina—and addressing these issues benefits everyone. Increasingly, there is a growing societal expectation for businesses to look globally at their internal DEI programs, including those that address race and ethnicity, and as part of their product portfolio, supply chain, and presence in local communities. 

Multinational companies are seeking effective practices for addressing race and ethnicity issues globally. We conducted interviews among BSR’s 300 member companies to identify common challenges companies face when addressing these issues and the potential opportunities this can represent for businesses. We also interviewed civil society organizations around the world to understand their expectations for corporate action.

How Are Companies Addressing Race and Ethnicity Issues outside of the US?

Leading companies are setting global policies with executive support and are creating frameworks for local and regional action plans and initiatives to be developed. Global efforts have been framed around “multi-culturalism,” “full spectrum diversity,” and “culture and heritage.” However, companies’ global commitments do not always come through at the local level. Success in this area depends on support from headquarters and local ownership.

Internally, companies are creating safe spaces for employees to reflect, share, and learn from each other’s experiences related to race and ethnicity and providing opportunities to learn about racism and discrimination through trainings, roundtables, town halls, etc. Although a necessary first step, these practices alone will not achieve lasting impact for employees or the company.

Until recently, most company efforts have used “band-aid” solutions for a specific issue, like quotas for representation or philanthropic contributions. Few companies have designed the necessary structural changes required to address the root causes of racism and inequality inside and outside their operations, and industry collaboration remains limited.

What Do Civil Society Organizations Expect of Companies?

Civil society organizations stressed the need to address discriminatory structures and systems instead of trying to change individuals. The organizations we spoke to noted that currently most internal efforts are top down and focus on behavior change or solely on diversity, with less attention paid to inclusion and equity. For example, setting quotas for leadership positions can ensure accountability, but it can also make certain groups feel that there is no longer a place for them or reinforce the idea that someone was promoted because of their diversity characteristics and not their skills and experience.

Reviewing practices that may perpetuate racism and discrimination, such as recruitment or pay policies, allows for a discussion on how employees and stakeholders can work together to create a more equitable system that benefits everyone.

Based on this research, we have developed a set of global DEI recommendations to address race and ethnicity issues that enables localization and long-term flexible investments. Companies can act on issues related to race and ethnicity in their countries of operations and learn from civil society organizations in the following ways:

• Commit to a global, long-term DEI policy with highest-level buy-in from senior leadership and frameworks for local and regional action plans and initiatives. For example, Cisco developed a set of Social Justice Beliefs that inform how it acts as a business for its employees, customers, and communities. As part of those principles, it has developed specific actions to address racism against the Black Community in the US, and it plans to explore expanding these actions to make them applicable to a global context. ID_Brazil works with global companies with footprints in Brazil and other Latin American countries to review policies and practices across operations and identify racism-related challenges and gaps through its Yes to Racial Equality Seal. 
• Focus on dialogue and learning as a first step: Foster safe dialogue for employees to share experiences, connect leaders with underrepresented staff at the local level, and implement training and toolkits for leaders and employees to identify and speak on racism and discrimination (e.g., this toolkit from Berkeley Haas). Accenture has created a training program that supports employees in identifying and speaking on racism (currently available in the US, the UK, and Ireland, and it will soon be available in Canada and South Africa). 
• Co-create through partnerships: Companies cannot and should not aim to address racism and discrimination alone. They can establish community engagement board(s), leverage and support employee resource groups (ERGs), focus on creating an effective reporting and ethics hotline, and join collaborations tackling racial justice to work with other companies committed to addressing these issues, like the WEF’s Coalition on Racial Justice in Business or the European Network Against Racism. Companies will need to commit financial and human resources to support these partnerships and ensure they are not adding additional work to groups that are already under-resourced.
• Advocate for systems change: Using an equity lens, examine your company’s business operations and product development processes to identify if and how it has enabled and benefited from systemic racism. Some examples: Starbucks, Airbnb, and Facebook completed civil rights audits. Companies should also explore how they can use their voice to advocate externally for wider systems change. For example, Ben & Jerry’s call to dismantle white supremacy provided actionable steps, and Dr. Bronner’s pledged funding to four organizations fighting racial justice and called out systemic racism in the criminal justice system.

Meeting today’s societal expectations for social justice and robust DEI programs requires long-term planning and readjusting business strategy. By joining the handful of leaders already committing to address race and ethnicity issues throughout their global operations, companies can strengthen existing commitments to human rights and non-discrimination and become a leader in their industry, especially as DEI becomes less about counting employees and more central to meeting growing stakeholder expectations to embed equity across company value chains. For more information, please reach out to our Equity, Inclusion, and Justice team.

Blog | Friday December 10, 2021

The Future of Business and Human Rights

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As we celebrate Human Rights Day on December 10—the anniversary of the adoption of the Universal Declaration of Human Rights—we are taking the opportunity to reflect on the role of business in shaping a future in which human rights are respected and protected in both law and in practice.

Business touches the lives of people in diverse ways, from workers to customers to community members throughout global value chains. Ensuring respect for human rights across these many touchpoints has never been more important.

The past few years have seen enormous changes in the business and human rights landscape. The emergence and intensification of destabilizing dynamics like climate change, the COVID-19 pandemic, political instability, socioeconomic inequality, and the rapid growth of new technologies with yet unknown human consequences heighten the risk that business activity will adversely impact people. At the same time, businesses are under increased public scrutiny for their human rights footprint, face growing regulatory and legal pressures to proactively manage and remediate these impacts, and are increasingly expected to disclose both human rights impacts and management measures.

Looking Back: Taking Stock of the First Decade of the UNGPs

The UN Guiding Principles on Business and Human Rights (UNGPs) offer guidance to companies on how to manage human rights risks associated with their business activities and value chains amidst these global challenges. Unanimously endorsed by governments 10 years ago in June 2011, the UNGPs lay out the corporate responsibility to respect human rights. They provide guidance on the steps businesses should take to avoid infringing on the human rights of others and to address adverse impacts with which they are involved (Principle 11).

Over the past decade, the UNGPs have given companies a shared roadmap for respecting human rights and spurred progress toward this goal in a business context, demonstrating that changing ways of doing business to reduce harm to people is possible. Yet gaps between aspirations and implementation still remain, leading to the continued occurrence of human rights abuses despite corporate commitments to the contrary. This is due in part to the scale and complexity of today’s global challenges, as well as barriers to change such as corporate capture of the state, lack of meaningful corporate human rights disclosure, and business models with inherent human rights risks.

Looking Ahead: Ensuring Respect for Human Rights in the Next Decade

The UNGPs and its key concept of human rights due diligence provide a powerful normative and practical tool for companies to tackle inequalities and realize a just and sustainable future for all—including in the context of “building back better” from the COVID-19 crisis and the just transition to a low-carbon economy.

The roadmap for responsible recovery during times of crisis, released last month by the UN Working Group on Business and Human Rights, emphasizes the role of business, including financial institutions, in addressing our most pressing global challenges in the next decade.

The roadmap sets out key action areas for strengthening business respect for human rights in the coming decade and leveraging the power of business enterprises to overcome the shared challenges of today and tomorrow. These include strengthening and mainstreaming human rights due diligence across value chains, increasing collective action to tackle systemic challenges, ensuring alignment between the UNGPs and the development of standards and regulations, strengthening access to remedy, deepening stakeholder engagement, and better tracking of progress.

To help companies fulfill their human rights responsibilities and align with the vision set out by the UNGPs and the UN Working Group’s roadmap, BSR has released a series of deep dives on the emerging issues and approaches that are critical to realizing the promise of the UNGPs and closing the gap between aspiration and action.

This month, we released our final installment: an update to our human rights assessment approach. Grounded in the UNGPs, our approach guides companies through the process of identifying and prioritizing their salient human rights risks and impacts. This is the critical first step for business to prevent and mitigate harm to people.

As stated in the UN Working Group’s roadmap, “Respecting people and the planet, by preventing and addressing adverse impacts across business activities and value chains, is the most significant contribution most businesses can make toward sustainable development.”

As we say goodbye to 2021 and move into 2022, we look forward to supporting business across sectors throughout the globe to fulfill the vision set out by the UDHR by shaping a rights-respecting future.

Blog | Thursday December 9, 2021

The Rise of Circular Fashion Brings Opportunity to Design a Fashion System That Works for All

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The fashion industry is transforming from linear to more circular business models—including repair, recycling, resale, and rental—while simultaneously being shaped by macro forces, such as automation and climate disruption.

This transition brings both an opportunity to proactively address the industry’s long-standing labor concerns by designing new business models and a responsibility to ensure that the new jobs created are good jobs.

The significant momentum behind circularity begs the question for both industry and policymakers: How can we leverage this transformation to reimagine and rebuild the global fashion system so that it works for all?

Through Keeping Workers in the Loop (KWIL), we convened over 45 major fashion industry players—established brands, emerging circular businesses, worker representatives, sustainable fashion experts, and international institutions—to explore this very question.

Our research uncovered three key findings:

1. As business models change, circularity offers an important opportunity for entrepreneurship and upskilling.

Growth and investment in circular fashion signal the significant commercial potential in transforming the fashion industry. For example, just four luxury resale platforms attracted over US$134 million in total investment in the sixteen months to August 2021. Businesses that offer recycling services, repair, rental, or resale platforms are emerging quickly and growing rapidly.

As major legacy businesses seek to adapt, circularity can also provide economic and entrepreneurship opportunities for workers. Our research, in which we surveyed almost 200 workers, suggests significant appetite to engage in and start new circular businesses. In India, 66 percent of workers surveyed, and particularly women, are keen to start their own businesses but feel constrained by lack of investment and business skills. Workers already possess much of the knowledge needed to successfully navigate the transition. For example, informal waste workers understand how garment and textile waste is segregated, processed, and reentered into the marketplace.

Jobs in the circular economy require soft skills such as agility, language and business skills, and technical competencies (e.g., garment deconstruction). Our research found that both skills (broadly) and training are currently lacking at all levels of the industry. Equipping diverse groups of workers with the necessary skills and entrepreneurship opportunities can accelerate the creation of a circular and resilient fashion value chain.

2. Marginalized and disenfranchised groups are overrepresented in value chain segments likely to expand in a more circular system, and there is a strong risk of perpetuating existing labor issues in circular roles.

The transition to a more circular industry means the opaque and complex global fashion value chain will expand to encompass new segments and activities like recycled plastic, agricultural waste, and textile recovery, sorting, and recycling. Our research found that the parts of the industry that are already circular today, such as waste-picking for recycling or sorting for resale, have some of the worst labor conditions, high levels of informality, and negative social impacts on communities. Informality in the garment and textiles industry poses a major challenge to a just, fair, and inclusive transition to circularity, as many of the activities to support a circular fashion system rely on informal workers. Furthermore, harassment, long working hours, and low levels of representation for workers are also key concerns among today’s circular workers.

3. The transition will take place amidst a backdrop of growing precarity and economic inequality throughout the global fashion system.

KWIL’s economic modeling suggests that circularity, automation, and other macro factors could significantly disrupt fashion industry job growth by 2030. The variation between the number of jobs today and what we see in the scenarios is a range of 6.72 million jobs—that’s over 11 percent of the fashion value chain jobs included in the model. Regional variance in job losses and/or gains across our economic scenarios is significant, with China and India seeing the biggest shifts. KWIL’s economic modeling also finds that wages in the garment and textiles industry are likely to be highly volatile relative to the rest of the economy. Worryingly, most scenarios see a decline in wages for low-skill jobs across geographies, whilst high-skill wages tend to increase.

Circularity’s social impact potential can only be realized through intentional action.

Our findings suggest that the circular fashion transition brings a number of potentially important benefits for workers, including:

• The potential of strong job creation;
• More multifunctional, stimulating roles, with improved health and safety for workers;
• Entrepreneurship opportunities, particularly for women, and;
• Increased potential to integrate informal workers into the value chain, offering them social protection etc.

Conversely, without intentional integration of jobs and social justice aspects, and adapting the operating norms in the industry, there is a real risk of perpetuating the same challenging outcomes for workers due to a lack of representation, consideration in decisions, regulatory protection, and an imbalance of power along the supply chain.

KWIL’s report highlights how changing industry dynamics and potential job disruption heightens the need to address these legacy industry challenges in the circular transition. To help prioritize a path to circularity that supports workers, it lays out 10 recommendations to enable a transition that is just, fair, and inclusive.

You can find the full report here, offering an initial mapping on skills needed, an exploration of how circularity will affect different roles, how job impacts will play out in diverse circular models, and detailed recommendations for both fashion and textile businesses and policymakers.

If you are interested in exploring how your company might work collaboratively with peers and BSR to help develop new strategic approaches which improve the global fashion system so that it works for all,  please connect with our team.

This research project was developed and supported by a grant from the Laudes Foundation. The Foundation's partnership and financial contribution were invaluable to the success of the project. We are also very grateful for the contributions of Sida—the Swedish International Development Cooperation Agency, H&M Group, and Target to the project outcomes and to the diverse organizations that contributed their insights and ideas to this work.

Reports | Thursday December 9, 2021

Human Rights Assessments: Identifying Risks, Informing Strategy

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Why Assess Human Rights Risks?

Identifying the human rights risks associated with business is the first critical step in preventing and mitigating harm to people due to business activity.

The UN Guiding Principles on Business and Human Rights (UNGPs) lay out the expectation that companies should avoid infringing on the human rights of others and should address adverse impacts with which they are involved.¹ To achieve this, businesses should carry out human rights due diligence, which is a four-step process for identifying and assessing actual and potential impacts, implementing measures to prevent and mitigate impacts, tracking the effectiveness of these measures, and reporting on how impacts are being addressed.² Human rights assessment is the first step in this process.

Reports | Wednesday December 8, 2021

Keeping Workers in the Loop

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The environmental and commercial benefits of a transition to circular fashion are clear, but the social impacts have received less attention. While a shift to circularity will create new roles and important opportunities for entrepreneurship, there are also serious challenges around marginalized groups, reskilling, and labor market disruption. 

This report explores the job impacts of the circular fashion transition, informed by BSR’s 18-month collective research with industry leaders and stakeholders via Keeping Workers in the Loop (KWIL). From automation to climate disruption, it considers the impact of a changing industry context and dynamics on workers and offers recommendations to industry and policymakers on creating a just, fair and inclusive circular fashion system.

KWIL has been supported by Laudes Foundation and the Swedish International Development Cooperation Agency (Sida); is led by BSR, in partnership with Catalyst Management Services, India and economists from the University of Lincoln; and includes H&M Group, Shahi Exports, The Renewal Workshop, Target, and VF Corporation as industry partners.

Blog | Wednesday December 8, 2021

The New SBTi Standard Places Science at the Heart of Corporate Net-Zero Targets

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The launch of the Science Based Targets initiative (SBTi) Net-Zero Standard just before COP26 marks a significant milestone. It is the first independently certifiable standard that assesses a company's net-zero targets, and importantly it clearly grounds them into 1.5°C-aligned short-term and long-term action.

Experts from civil society, corporates, and academia worked together over the past year to develop the standard, which was then piloted by more than 80 companies. The result brings much-needed clarity to corporate net-zero targets—a rapidly evolving, and sometimes criticized, topic.

The standard finally invites climate science to the net-zero conversation and, importantly, distinguishes between near-term and long-term science-based targets.

Near-term science-based targets focus on a short timeframe (5-10 years). They require companies to align their Scope 1 & 2 targets with a 1.5°C goal, while Scope 3 ambitions should retain a threshold of well below 2°C.

Setting longer-term targets is an important development. It requires companies to achieve 1.5°C-aligned decarbonization by their net-zero target year, but by no later than 2050. Achieving that ambitious goal translates to reducing greenhouse gas (GHG) emissions by at least 90 percent for the vast majority of Scopes 1, 2, and 3.

These changes are significant in that they provide a mechanism for increased accountability in the near term, but also for the longer term, when a company pledges to reach net zero. With this robust new framework, the question for businesses is no longer “by how much should I reduce emissions and on what scopes?” but rather “how do I transform my business to align with the 1.5°C ambition?”  

And that is why this new SBTi standard is so important: it enshrines 1.5°C across scopes as the minimum ambition, in alignment with the UN Race to Zero initiatives. And, as a standard, it provides a pathway to independent verification. This is a much-needed and welcome development, which provides companies with a clear framework for action.

The standard also clarifies the meaning of the "net" in net zero. The mounting criticism of net zero has focused on companies claiming net zero by simply offsetting emissions without decarbonizing.

The new standard addresses this critique by clearly stating that a company will not be able to claim it has achieved a net-zero goal until the long-term decarbonization target is met. When companies reach such deep decarbonization across Scopes 1, 2 and 3 at their target year, they are required to net their emissions by balancing out residual emissions with permanent carbon removals.

This means that in their target year, companies should reach net zero by netting a portion of emissions by investing in technological or nature-based solutions that effectively remove GHGs from the atmosphere. What this also implies is that avoided emissions or reduced emissions credits will not be part of the "net" of net zero.

Companies will need to plan for their carbon removal strategies. Companies should expect additional guidance on this topic in 2022, both from SBTi and initiatives such as the Voluntary Carbon Markets Integrity Initiative (VCMI).

The standard also provides initial guidance on climate solutions beyond companies’ value chains. While the standard insists on the essential importance of deep decarbonization, it recommends that companies also step up action beyond their Scopes 1, 2 and 3 by investing in appropriate climate solutions; e.g., by investing in forest conservation to eliminate deforestation by 2030 on their way to net zero.

The urgency of the climate crisis could not be more acute, and immediate action is needed. The new SBTi standard makes science-based decarbonization across scopes the baseline for businesses. Climate leadership will increasingly require companies to concurrently look beyond their value chain, with additional investments to slash methane emissions and scale nature-based solutions, on the way to net zero.

Further guidance and clarity on the role of SBTi to encourage climate action beyond the value chain is needed. Here are a few things to look out for in 2022:

• Increased company uptake of the SBTi Net-Zero Standard: SBTi had validated the targets of seven companies by launch, including Transform to Net Zero member Wipro. Early signs suggest more than 70 companies are already interested in validation, and this is poised to grow further.
• Increased clarity: Two main SBTi projects are in the works. A review and development of long-term Scope 3 target-setting methods will help build confidence in comprehensive Scope 3 decarbonization targets; the cited "beyond value chain mitigation" project will bring clarity on expectations for climate investments to supplement decarbonization efforts.
• Guidance on forest, land, and agriculture: The forest and agriculture sector especially requires additional guidance; e.g., accounting rules for land-based removals. The release of the forest, land, and agriculture (FLAG) methodology will help and likely trigger updates in the standard.
• Net-Zero Standard for financial institutions: It is worth noting that a separate process is ongoing for financial institutions, with more information available here.

As we recently wrote after COP26, it is very clear that net-zero corporate commitments are here to stay, and so is the pressure to define what good looks like.

The key pillars of the SBTi Net-Zero Standard delineate the backbone of robust corporate net-zero implementation. We encourage businesses to embrace them and think strategically about the business transformation needed to achieve them.

The publication of the SBTi Net-Zero Standard is a start and not an end, as some topics need additional guidance—but we now have the "what." The challenge ahead lies in the "how" companies will reach those targets through business transformation in a just and equitable way.

Blog | Tuesday November 23, 2021

COP26 Made Climate Action Mainstream Business and Put 1.5°C on Life Support

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At COP26, the global community made meaningful progress. Unfortunately, it also is wholly insufficient to meet the Paris Agreement’s goals.

National 2030 targets announced in Glasgow take us to 2.4°C of warming by 2100, a noticeable improvement from our path six years ago in Paris, but these are still very far from the objectives of the Paris Agreement. The stretch target of 1.5°C, which the UK hosts aimed to keep alive, is now on life support. 

That is why the Glasgow Climate Pact asks countries to strengthen commitments by the end of next year, in 2022, instead of waiting until 2025. It also calls on countries to accelerate “the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies.” The UN outcome also enabled countries to apply carbon credits to their national targets and to have credits flow across international borders.

International cooperation was not limited to the official negotiations.

• Over 100 countries joined the Global Methane Pledge to reduce global methane emissions by at least 30 percent below 2020 levels by 2030. Conspicuously absent, however, were the largest methane emitters: China, India, and Russia.
• In one of several nature-related announcements, 140 leaders whose countries account for 90 percent of global forests joined the Glasgow Leaders’ Declaration on Forests and Land Use to work collectively to “halt and reverse forest loss and land degradation by 2030.”
• A disappointing 40 Ministers supported the Global Coal to Clean Power Transition Statement to transition away from unabated coal power generation. This group did not include some of the major producers and consumers of coal.
• The US and China issued a joint declaration, making climate a rare issue of cooperation between the two largest emitters.

COP26 also clearly showed how climate action has become mainstream business. 100 pavilions inside the official site and many parallel conferences outside of it produced announcement after announcement. Future COPs will be more trade fair than international negotiation. Among the highlights:

• The formation of the International Sustainability Standards Board, which will consolidate the Value Reporting Foundation (VRF) and the Climate Disclosure Standards Board (CDSB), is a major breakthrough for unified ESG reporting.
• The First Movers Coalition will gather companies to use their purchasing power to create early markets for innovative clean energy technologies in industries whose emissions are hard to abate.
• The Glasgow Financial Alliance for Net Zero, an umbrella initiative grounded in the UN’s Race to Zero criteria, includes 450 financial services firms managing US$130 trillion of private capital.
• A multistakeholder COP26 declaration accelerated the transition to 100 percent zero-emission light vehicles.

At COP26, BSR launched or co-launched several collaborative efforts to build the net-zero economy, including:

• A free online training course for SMEs called “Climate Fit,” part of a set of tools that SMEs can freely access on the SME Climate Hub, which was developed with CISL.
• A 1.5°C Supplier Engagement Guide for the 1.5°C Supply Chain Leaders, a group of companies making climate a key procurement criterion. The guide is an open framework available to any company, with clear steps and an open/evolving repository of best practices shared by leading companies.
• The Business Alliance to Scale Climate Solutions, a group of corporate funders and partners dedicated to increasing the scale and impact of carbon credits and other forms of climate solutions funding. BASCS is now open for new members!
• The Sustainable Freight Buyers Alliance, which will be incubated over the coming six months and aims to achieve 100 million tonnes of reductions in freight and logistics emissions this decade and to contribute to 1.5°C-aligned net-zero logistics by no later than 2050.

Finally, COP26 evidenced several trends which will intensify in coming years.

Net-zero commitments are here to stay. The release of the Science-Based Targets initiative’s Net Zero Standard will help to make them more consistent and environmentally integral. But with activists protesting for climate justice and decrying the credibility of those commitments, the main question for business will be how to implement net-zero goals quickly and equitably while benefiting local communities. Businesses will have to get their arms around climate justice.

The connection between climate and nature will become more prominent. Companies will increasingly be asked not only to decarbonize energy, but to look upstream at their impacts on land and materials they source. And there is growing momentum to rapidly reduce methane emissions. For business, this means an expectation to consider not just CO₂ but all greenhouse gases in their accounting and their decarbonization strategies, e.g., related to agriculture, waste, and land use.

F. Scott Fitzgerald wrote that the “the test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless yet be determined to make them otherwise.” So it was with COP26. The 1.5°C goal, with all the impacts that the IPCC documented in 2018, is slipping away, even as climate action mainstreams into the business community.

Reports | Tuesday November 16, 2021

Action for Sustainable Derivatives: Annual Update on Progress, 2021

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The latest update from Action for Sustainable Derivatives (ASD), BSR's collaborative initiative driven by palm oil derivatives users to transform their supply chains, shows that a centralized, collective approach to enhancing transparency, boosting engagement, and identifying risks is working.

Highlights include collective transparency for 825,000 tons of palm-based materials—nearly double the volume covered during the first year of ASD. This represents around 1.1 percent of the global palm production and 20-25 percent of the palm kernel oil-based oleochemicals market.

Learn more about ASD's impact. 

Blog | Wednesday November 10, 2021

Allbirds’ SPO Framework Is Step in the Right Direction for ESG Commitments by High-Growth Companies

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For the past quarter century, Silicon Valley has generated untold innovation and value from new business models that have transformed our world. For many of the original generation of disruptors, a formal look at environmental, social, and governance (ESG) questions would only come later, after they achieved the size and scale to merit scrutiny and, in some cases, after they made misjudgments of their impacts in the world.

This is why last week’s initial public offering (IPO) from Allbirds, an apparel and footwear company that has made sustainability an explicit part of its brand and value proposition, is so interesting. Indeed, Allbirds premised its entry to the public capital markets on an explicit set of 19 ESG criteria developed through partnership with an advisory council comprised of a mix of nonprofit and philanthropic organizations, investors, and corporate governance experts. (Full disclosure: I chaired the advisory council and therefore participated in the development of the criteria, which are currently hosted by BSR at https://spo.bsr.org/ and where the full list of advisory council members can be found).

The Sustainability Principles and Objectives Framework (SPO Framework) includes topics ranging from climate change to value chains, human rights, labor practices, and governance.

In preparing to go public, Allbirds, which had already achieved B Corp status, found that there was no existing framework specifically designed for a company at its stage of development. This led to the creation of the SPO Framework, which is intended for late-stage private companies, companies preparing to go public, and early-stage public companies.

In the development of the Framework, several key principles were applied:

• The framework needed to be appropriately comprehensive for companies that, in many cases, do not—yet—have the institutional structures to develop, implement, and verify policies and practices. 
• It also aimed to be sufficiently ambitious to be meaningful, while not being limited to a tiny handful of companies.
• The Advisory Council also had a clear commitment to ensuring that the Framework was not seen as adding to the already quite crowded world of performance standards and reporting and disclosure frameworks. This is why the focus on companies at a specific stage of their development is so important.
• Finally, there is an intention on the part of all of us who developed the Framework to see the Framework grow and evolve, with plans for ongoing development yet to come.

This IPO may be the first of its kind, but it most certainly will not be the last. Since the SPO Framework was first released in August, we have seen considerable interest from investors, other companies at a similar stage of development, journalists, and the sustainability community more broadly. It seems highly likely that there will be more companies using this model to raise the level of their ESG commitments and to demonstrate to investors and stakeholders that they intend to make sustainability commitments right from the start.

And for Allbirds, a company whose initial product is athleisure shoes, it makes sense that they hope many companies will follow in their footsteps.

Blog | Thursday November 4, 2021

Companies Now Have a Powerful New Tool for Promoting and Protecting the Rights of LGBTIQ+ Employees

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A wave of anti-LGBTIQ+ policies, driven by populist movements, continues to rise around the world, threatening many of the rights-protecting victories achieved over the last several decades. 

In May, the Human Rights Campaign declared that “2021 officially [became the] worst year in recent history for LGBTIQ+ state legislative attacks as [an] unprecedented number of states enact [a] record-shattering number of anti-LGBTQI measures into law.” And that is just in the United States.

2021 has witnessed similar backlashes to LGBTIQ+ communities claiming their universal human rights in places like Hungary, Poland, and other parts of Eastern Europe, a region once deemed to be “a world leader on gay rights.”

In the face of this, the world’s leading companies have a tremendous opportunity to stand up and promote rights and protections for their LGBTIQ+ employees.  A new tool recently launched by a coalition of international organizations, including BSR and the Partnership for Global LGBTIQ+ Equality (PGLE), is helping companies to do just that.

While many companies have embedded protections and benefits for their LGBTIQ+ employees into their systems, the UN Standards present a framework for companies to go even further—by positioning LGBTIQ+ rights as universal human rights and building off the concepts embedded in the UN Guiding Principles on Business and Human Rights.

Through the implementation of the UN Standards, companies have a path forward, and indeed a responsibility, to promote these universal rights within their spheres of influence—including business partners, governments, and the communities in which they do business.

In September 2021, a coalition of organizations launched the UN LGBTIQ+ Standards Gap Analysis Tool (Tool). Partners in this effort include BSR, PGLE, the Office of the United Nations High Commissioner for Human Rights (OHCHR), the United Nations Global Compact (UNGC), and the World Economic Forum (WEF), with the generous support of BCG. The tool is a practical, step-by-step guide designed to help companies navigate the implementation of the UN Standards so it can be used across relevant departments and functions within your company. It is a complimentary and strictly confidential online platform that helps companies assess current policies and programs, highlight areas for improvement, and identify opportunities to set future corporate goals and targets when implementing the Standards.

Furthermore, the tool can provide companies with a roadmap to further align their practices, policies, and procedures in line with the UN Standards of Conduct.

We believe the UN Standards and our supportive tool are the authoritative frameworks for businesses to respect the human rights of LGBTIQ+ people across their value chains—including employees, those of their business partners, and LGBTIQ+ communities worldwide. It is also a catalyst for determining action and support for companies to use in house and provides an opportunity for DEI leaders to articulate the importance of providing enduring improvements for LGBTIQ+ community internally and within the communities in which they operate and provide services and products to.

We encourage BSR members and beyond to support the Standards and use this tool to guide them on this very important and worthwhile journey.