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Blog | Thursday March 4, 2021

What Business Can Expect from China’s 14th Five-Year Plan

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The 19th Central Committee of the Communist Party of China (CPC) held its Fifth Plenary Sessions in Beijing in October 2020 to set the outline for the upcoming 14th Five-Year Plan (2021-2025) (14th FYP). The final version of the 14th FYP will be released at the National People's Congress in March 2021. What exactly is the 14th FYP? What are the key macro themes for the sustainability world to watch, and how will they impact business?

What is the 14th FYP and why is it particularly significant?

While every Five-Year Plan (FYP) is emblematic of its own time, the 14th FYP is particularly significant and noteworthy due to China’s impressive recovery from the pandemic, scientific and technological revolution during geopolitical tensions, and its rising profile in international affairs and role in global supply chains. Meanwhile, the time period of the 14th FYP (2021-2025) will be critical for China to lay foundation for many of its ambitious commitments, including but not limited to peaking carbon emissions by 2030 and doubling both current GDP and per capita GDP by 2035. There is no doubt that the 14th FYP will continue to steer the country’s development for the next five years.

Since 1953, four years after the founding of the People’s Republic of China, the FYPs have been the single most important guiding document. Over the last 10 years, the FYP has shifted from a political plan to policy direction for the country’s future economic and social development with strong implementation principles. And the impact of the FYP to business has become more relevant.

Published in 2016, the 13th FYP (2016-2020) put forward comprehensive and balanced development goals for the country and emphasized sustainable development through industrial upgrading, boosting domestic consumption, increasing urbanization rate, eliminating poverty, and improving environmental protection. This was the first time that China set clear sustainability goals and direction, which took root in the public as a simple phrase: "Clear water and green hills are gold and silver mountains."

Despite the U.S.- China trade war and the COVID-19 pandemic, most of the objectives outlined in the 13th FYP were achieved by the end of 2020, especially those regarding environmental protection including the “3-year Blue Sky Battle”, an action plan to improve air quality, which has shocked business operation. Other important achievements included:

• achieved economic growth and grew the middle-income population;
• accomplished environmental and ecological goals related to concentration of fine particles, carbon emissions, water quality, and the elimination of other chemical pollutants, in addition to committing to peak its emissions before 2030 and reach carbon neutrality before 2060;
• eliminated extreme poverty and lifted more than 55 million people out of penury during the period.

What sustainability themes should we expect in the 14th FYP?

The full and complete version of the 14th FYP will be launched at the National People's Congress this month. However, based on discussions in China and the documents from the Central Committee CPC’s Fifth Plenary Sessions, we know there are three major trends to watch:

1. Accelerating green economy and net-zero transition: The 14th FYP period will be the most critical time to steer the overall economic development toward China’s 2030 emission peak commitment and to lay the foundation for its green economy and 2060 net-zero goals. It is expected that environment and climate will be put firmly at the heart of the next FYP, and we also anticipate that many implementation principles and tools will be developed quickly in 2021 to steer the green transformation of key industries and push for clean energy market and solutions innovation at regional level.
   
   China will become an important market and key contributor for international businesses to achieve their climate goals, especially contributing to Scope 3 emissions reduction. This might also result in increasing collaboration opportunities between businesses and other stakeholders to build their renewable energy portfolios and Scope 3 emission reduction pathways. We expect the 14th FYP to include clear measures to guide business actions, especially regarding emission control, green energy strategy, waste management, and recycling. The sectors most likely to be affected include textile, manufacturing, transportation/logistics, agriculture, energy, and infrastructure.
    
2. Boosting domestic market through innovation and technology: In light of the challenging external macro environment and in order to continue to grow China’s national economy and personal income levels, the 14th FYP will focus on boosting the economy through strengthening "internal circulation" (domestic economic activities), accelerating industry upgrades with innovation and technology, and pushing for digitalization with increased provision of "new infrastructure" such as data centers, 5G networks, AI, and internet of things (IoT).
   
   To compete in the Chinese market, businesses will have to show a stronger commitment to innovation and digitalization. Consumer-facing brands will need to cope with and harness various digital channels for marketing, sales, consumer communication, and even product innovation. At the same time, they will need to prepare their manufacturing and research and development (R&D) for fast-changing consumer and policy demand. All of this is expected to take place in China faster than in other parts of the world.
   
   China’s overall goal is to build a well-developed nation with stronger economic power by 2035, and to do so while achieving its climate goals. In this regard, it calls for aggressive business actions to support transforming the country’s industry structure towards energy and resource efficiency. Business will need to take quick measures to transform their energy structure, embrace technology development, and marketing. This will call for business to develop a strategic plan to update their supply chain and plan for growth in tandem with this policy trend.
    
3. Improving well-being and health through enhancing social investment: On the social side, the 14th FYP will continue to improve people’s well-being and health through investing in education and healthcare, providing higher-quality employment and promoting the rural revitalization strategy. Implementation of the Healthy China 2030 vision, a plan to ensure all people in China have access to healthcare, will continue to reform the healthcare, pharmaceutical, and health insurance sectors to deliver quality products and services to people. Rural revitalization will serve as a key lever to strengthen China’s poverty relief efforts and to reduce income inequality through rural livelihood and industry development. That said, it will continue to be relevant for companies in China to enhance social investment in rural areas.
   
   China’s efforts to reduce relative poverty in order to improve overall population’s well-being through education, jobs, skill development, and better health conditions will have an impact on business. There will be opportunities across the agriculture, education, insurance, and public health sectors. Businesses in these sectors will need to develop clear strategies aligned with China’s overall innovation and technology development plan to steer business growth and impact.

All these trends are relevant and noteworthy, and businesses should pay attention over the next five years. However, the continuation of geopolitical conflicts and trade wars might jeopardize collaboration on related areas, especially stability of the supply chain when it's related to critical materials and output. It will require strong leadership from all sectors to steer these new opportunities and achieve win-win solutions for all. 

Watch this space for more as we unpack the changes, related risks, and opportunities that China’s 14th Five Year Plan will bring. BSR will continue to work on this with more in-depth research to each of the topics and their impacts on industries. Engage with us to inform your understanding and develop your China strategy.

Blog | Tuesday March 2, 2021

Beyond Former User @realdonaldtrump: A Human Rights-Based Approach to Content Governance

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The recent action taken by social media companies against former user @realDonaldTrump following the insurrection at the Capitol sparked a fierce debate.

For some, the decisions were a legitimate, necessary, and proportionate response to the obvious incitement of violence and insurrection: a new line had been crossed, and tough action was merited.

For others, this action came too late—the damage had already been done, and the lack of action against previous transgressions (such as quoting “when the looting starts, the shooting starts”) had allowed users to push the boundaries of online speech too far, for too long.

For others still, the decisions were a problematic infringement on the right to freedom of expression and a step too far for companies to take.

A debate raged on about whether and how democratically elected leaders should be treated differently online. For some, the public has a right to hear from their elected officials, no matter how objectionable the message; for others, elected officials should be afforded less freedom when incitement to violence is at stake, owing to the substantial influence that the speaker has with the audience and increased risk of harm.

These are real dilemmas with potentially conflicting rights at stake, such as freedom of expression, public safety, and the right to participate in government. There are no simple solutions (if you think there are, here is a reading list) and we have nothing but admiration for those inside social media companies genuinely seeking to take principled approaches to resolve these dilemmas. It is not an easy task, and it's one where no good deed goes unpunished.

BSR’s engagement in this dialogue has focused on how social media companies can apply a human rights-based approach to the challenge of online speech. In other words, how should a company’s responsibility to respect human rights according to the United Nations Guiding Principles on Business and Human Rights (UNGPs) manifest itself in the context of content governance?

With this objective in mind, we are publishing a short paper today setting out a four-part approach to human rights and content governance, based on a combination of the UNGPs and the various human rights principles, standards, and methodologies upon which the UNGPs were built. These four parts are as follows:

• Content policy—statements about what is and is not allowed on a social media platform should encompass all human rights, be founded upon human rights standards and instruments, and draw upon engagement with affected stakeholders.
• Content policy implementation—given the challenges of enormous scale and rapid speed, companies should prioritize implementation based on the severity of human rights risk (globally, not limited to the United States), understand the link between online content and offline harm in the relevant local context, and provide effective remedy when mistakes are made.
• Product development—the features, services, and functionalities of social media platforms are constantly evolving, and it is important that potential human rights impacts are assessed during the development and deployment process, especially for high-risk and conflict-affected markets.
• Tracking and transparency—companies should maintain quantitative and qualitative indicators of the effectiveness of their approach and be transparent about the rationale for important content decisions, with reference to relevant human rights considerations.

There are two important features to highlight about this approach.

First, these four parts constitute a robust framework of ongoing human rights due diligence that enable content decisions to be made thoughtfully, deliberately, and grounded in rights-based analysis, rather than “on the go” or according to the whim of the moment. They emphasize that the process matters as much as the decision itself—that while different people or companies may reach different decisions, these decisions should be intellectually consistent, defensible on human rights grounds, and conveyed transparently.

Second, these four parts encompass more than simply what content is and is not allowed on a platform. Our approach assumes that international human rights law and the UNGPs provide an overall framework for principled decision making and action, not a “copy and paste” set of content rules for companies to follow. The four parts are intended to be considered as a package and enable companies to adapt as the reality of social media use unfolds.

One of the concerns most frequently expressed over recent weeks has been the unease that companies have so much power—with some arguing that decisions about content should be a role for governments, not companies.

However, there are three reasons why we believe companies should play a role in content governance and thus why setting out a company-based human rights-based approach to content governance remains essential.

First, many of the most significant public policy proposals on content governance—such as the U.K. Online Harms White Paper, the EU Digital Services Act, and proposals to reform U.S. Section 230—envision a very important role for companies taking responsibility for harm associated with content on their platforms.

Second, these public policy proposals relate to specific jurisdictions, whereas the internet is global. Human rights-based approaches enable consistent approaches to be taken across international borders, including jurisdictions where laws and regulations conflict with international rights standards. Indeed, a global approach based upon international human rights standards provide a strong foundation to push back against governments seeking to suppress freedom of expression and other rights.

Third, the UNGPs state that companies have a responsibility to address the adverse human rights impacts with which they are involved. User-generated content clearly has a connection to adverse human rights impacts, and therefore a human rights-based approach to content governance is essential to meet the responsibility of companies to address this connection.

Indeed, the most promising near-term contribution to dilemmas relating to @realDonaldTrump won’t come from government, but from the independent Facebook Oversight Board, which is due to review the former user’s suspension from the platform.

We hope that this paper provides a useful contribution for how respecting human rights and implementing the UNGPs can provide a foundation for this infrastructure, and we welcome comments to amend, improve, and build on this approach.

Blog | Monday March 1, 2021

Three Ways to Improve Supply Chain Sustainability in the Decisive Decade

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2020 began with companies making new commitments to sustainability, looking to do their part to achieve the SDGs and the goals of the Paris Agreement over the course of the Decisive Decade. Then, we found ourselves in the throes of the COVID-19 pandemic, government lockdowns, and the resulting economic downturn.

Over the past year, business learned the hard way how vulnerable it is to unexpected crisis, particularly with regard to global supply chains. COVID-19 provided a wake-up call to companies about how opaque the global supply chain is.

It is now clearer than ever that we need a global supply chain model that is more transparent, more resilient, more responsible, and more sustainable. This is no longer just a strategy for companies to consider—it has become a business imperative.

Unfortunately, there are no obvious and easy solutions available. The existing commodity market has been designed to provide high-quality goods, but it has the downside of price volatility and a lack of transparency. Companies will need to experiment with creative and innovative approaches in order to find an alternative way to maintain business growth while obtaining the necessary transparency and becoming more resilient. Here are three fundamental steps for improving supply chain sustainability:

1. Set Goals and Create an Operational Roadmap

Over the years, we have witnessed an increasing number of entities make ambitious commitments to sustainability. This includes commitments related to climate and the environment (such as Science Based Targets, Net Zero Targets, Zero Deforestation, 100% of Recycled Plastic, and Science Based Targets for Nature) as well as those related to human rights and worker well-being (such as no child labor, no forced labor, and living wage).

It is not only the big brands making such commitments: Entities across all tiers of the supply chain, including retailers and fast-moving consumer goods (FMCGs) to upstream producers as well as intermediary processors and traders, are making these commitments as well. And yet only a few organizations are providing clear operational roadmaps and implementation frameworks to achieve their specific commitments.

Achieving long-term targets requires deep understanding of the issues, needs, and constraints in specific supply chains and across multiple tiers, as well as the ability to translate this assessment into operational actions that companies can take individually and collectively.

An operational roadmap would demonstrate that commitments and policies are taken seriously, based on ambitious but achievable targets. The operational roadmap should include short-, mid-, and long-term milestones and targets, as well as a strong and transparent monitoring process and regular reporting.

Goal-setting and developing an operational roadmap will start a process of creating a sustainable supply chain strategy that will both lead to secure long-term economic value and ensuring positive outcomes for the environment and people. There is always potential for failure when experimenting with how to operationalize a plan to achieve your sustainability goals; however, it’s important to remember that this will help to obtain more clarity on what does not work at the current stage, why, and then figuring out what needs to be improved.

2. Drive Collective Action

The global supply chain is a complex network involving a lot of players, tiers, regions, and issues. All players involved have a role to play and a voice to raise, their own constraints to deal with, and potential to be part of the solution.

A single entity—company, supplier, or manufacturer—on its own cannot impose its vision on the overall network anymore. Approaches like supply chain risk assessments, materiality assessments, due diligence, and supplier ranking systems must be addressed collectively and not imposed by one single player—with its own vision and definitions—upon others in the value chain.

In the effort to create supply chain sustainability and transparency, companies should ensure a common understanding of the issues and constraints, as well as the potential solutions any player at any tier can bring. To address specific issues linked to specific, individual supply chains and to be efficient and successful, all players involved at all tiers need to speak a common language.

As an example, BSR’s supply chain collaboration Action for Sustainable Derivatives (ASD) is designed to bring together value chain actors facing similar challenges to collectively drive change across the palm derivative supply chain. As a collaborative effort, ASD members can use the combined leverage of their procurement influence and spend to create meaningful action. New collaboration models are one of the key success factors of supply chain sustainability and long-term business resilience.

3. Revamp the Business Model

For any company to successfully achieve its high-level sustainability commitments, be it Science Based Targets, no deforestation, or no forced labor, it must move away from the model of the traditional commodity market. This existing model allows for the trade of commodities globally at the most efficient price, but most of the time, it comes at the cost of resilience.

Indeed, this commodity market brings a lot of opacity to global supply chains. This trading approach, where companies are unable to see beyond Tier One suppliers, makes it nearly impossible to obtain transparency on all the players involved in the supply chain and all the sourcing regions and; as such, gain accurate understanding of the risks.

This is why a new business model for our global commodity market must be developed and promoted, one that remains market driven while being fair, more transparent, and can provide more resilience. We need a business model that will help to create progress to address the critical issues that global supply chains are exposed to. However, it’s important to note that this business model can only be proposed, developed, piloted, and scaled through a collaborative approach involving representatives from all tiers of the value chain, including upstream producers or extractors, intermediary processors, FMCGs, retailers, consumers, traders, and financial institutions.

BSR works with our member companies and stakeholders across all tiers of the supply chain to support the implementation of these three imperatives in order to achieve climate, environment, and social commitments as well as broader supply chain resilience. To learn more about our work on supply chain sustainability, transparency, and resilience, please reach out to connect with the team.

Blog | Thursday February 25, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Blog | Wednesday February 24, 2021

How Business Should Respond to the Coup in Myanmar

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

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

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

1. Prioritize staff safety and civil liberties.

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

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

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

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

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

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

4. Take proactive steps to respect human rights.

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

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

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

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

5. Support targeted economic sanctions.

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

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

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

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

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

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

Blog | Tuesday February 23, 2021

Accelerating Progress for Gender Equality through the Generation Equality Forum

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

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

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

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

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

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

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

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

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

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

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

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

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

Blog | Monday February 22, 2021

Inside BSR: Q&A with Francesca Manta

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Blog | Thursday February 18, 2021

Larry Fink Adds His Voice to the Call for Business Transformation

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

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

BlackRock Continues to Prioritize ESG…

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

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

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

…and Calls for Business Transformation

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

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

And on stakeholder engagement, Fink warns:

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

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

ESG Shareholder Capitalism is Not Stakeholder Capitalism

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

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

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

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

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

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

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

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

Blog | Wednesday February 17, 2021

To Combat Systemic Discrimination, Companies Need to Acknowledge Their Role

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

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

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

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

Corporate Advertising

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

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

Lending

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

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

Corporate Hiring

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

Tech-Based Products and Services

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

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

Corporate Lobbying and Tax Policy

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

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

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

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

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

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

Blog | Wednesday February 10, 2021

Women’s Empowerment in the Era of Social Distancing

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

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

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

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

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

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

- Female Worker, Kenya

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

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

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

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

Closing the Digital Gender Gap

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

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

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

Digital Learning for a More Just, Sustainable Future

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

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