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Blog | Wednesday June 10, 2020

Today and Tomorrow: COVID-19 and the Increased Relevance of Corporate Sustainability

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With the spread of COVID-19 creating a crisis that is unprecedented in living memory, there is not an element of our lives that has remained unaffected. And this is especially true for business. 

At GlobeScan and BSR, we spend our time working with some of the largest businesses in the world. We wanted to understand both the immediate effect on the sustainability efforts of the companies we work with and also to begin to understand what long-term implications they are anticipating as a result of the pandemic. 

To that end, we surveyed 102 companies across our global networks. 

In the short term, sustainability teams have been involved in the response to COVID-19 in a myriad of different ways. When we asked what was the most important role that the sustainability function has played so far, respondents highlighted community engagement (19 percent), providing advice and support to the business (14 percent), stakeholder engagement (13 percent), health and safety activities (10 percent), and philanthropy (10 percent). 

The survey results show that one of the biggest longer-term outcomes of the COVID-19 pandemic may be a marked increase in the importance of corporate sustainability. Four in ten respondents (40 percent) say that the crisis will increase both the relevance and expectations for sustainable business. Moreover, over a third (36 percent) say that the agenda for sustainable business will change as existing priorities increase in prominence and new issues arise. 

Resilience is having its moment, as more leaders recognize the strategic value of sustainable business models which improve their company’s ability to anticipate and prepare for fast-moving, unexpected shocks. It will be worth watching the extent to which business leaders continue to see sustainability as a primary source of strategic advantage and as a driver for rebuilding the global economy. 

Resilience is having its moment, as more leaders recognize the strategic value of sustainable business models which improve their company’s ability to anticipate and prepare for fast-moving, unexpected shocks.

When asked which elements of their company’s sustainability strategy would be most affected, over four in ten highlighted supply chains (44 percent), with others mentioning inclusive growth (31 percent), climate action (29 percent), and philanthropy (28 percent). 

It is worth noting the reported impact on inclusive economic growth. In our 2019 annual State of Sustainable Business Survey, this area of the sustainability agenda has traditionally been a lower priority, behind climate, human rights, and workers’ rights. It will be interesting to see whether inclusive economic growth becomes a more important corporate priority given the monumental business and socioeconomic impact of the COVID-19 crisis. 

Given the significant impacts of the COVID-19 crisis, it is perhaps not surprising that almost half of respondents (47 percent) are anticipating budget cuts for their sustainability efforts within the next 12 months. By comparison, at the onset of the Great Recession in 2008, we asked a question to a similar cohort of businesses and just under a third (31 percent) said that they were expecting a budget cut. It will bear watching whether this downward pressure will be alleviated by the countervailing recognition of the increased relevance of sustainability to business longevity and success mentioned above. 

While many sustainability teams may be more challenged when it comes to resources, it comes at a time of great urgency for many of the sustainability issues that companies are facing. The crisis and its impacts will continue to create demands on companies to build more resilient businesses while also addressing systemic challenges facing society, including racial and income inequality, the transition to a net-zero greenhouse gas economy, the rise of automation and artificial intelligence (AI), human rights, and overall health and well-being.   

It is already becoming clear that going “back to normal” is neither likely nor desirable. The challenge for us continues to be meeting the moment while building for the future, and the work of sustainability teams remains essential. Sustainable business can be a catalyst for the change that is needed, and sustainability professionals will need to rise to the leadership challenge that is before them. We have seen it happen before. We hope it happens again. 

Blog | Thursday June 4, 2020

An Open Letter from BSR on Racial Justice

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Dear BSR Members and Partners,

The brutal killing of George Floyd by Minneapolis police officers last week—following on the previous killings of Ahmaud Arbery, Breonna Taylor, Eric Garner, Alton Sterling, Trayvon Martin, and countless others—is yet another example of the systemic and institutional racism that persists in the United States.    

We are heartbroken and outraged by these injustices. This is a deep stain on the promise and reality of the United States. It has been for more than 400 years.  

Black Americans continue to face repression and unspeakable treatment by the police, with too many innocent lives ended prematurely, and violently.   

And while this inhuman treatment reveals this awful truth in the starkest way, we know also that there are countless other ways that so many are deprived of their human rights. Black Americans face deeply entrenched barriers in the workplace, in education, and basic daily activities: profiled on public transportation, attacked and murdered for “running while black,” and even intimidated when doing something as innocuous as birdwatching. And for the last three months, we have watched as COVID-19 has killed disproportionate numbers of Black Americans. 

This is unacceptable, and it is time for change. 

There is much to be done, by all of us—to listen, to learn, and to speak out—and then to act.   

• For BSR: We have a long way to go. We can and must do more to become a more diverse and inclusive organization. While we don’t have all of the answers, we know we must do better. For us, this is a time to listen, to learn, and to begin to do the hard work we know will be required. And we encourage our partners and others in our community to hold us accountable when we fall short. 
• For the sustainability community: We can and must become more diverse. And we need to work together, both to effectively and meaningfully integrate racial justice into our vision for sustainable business and to set an agenda for how companies can protect and defend the human rights of their employees, customers, and users. 
• For business: Your leadership is needed on this issue. This begins with changing employment practices and investments that are critical engines of economic opportunity that can influence outcomes for generations. It also extends to using your influence, partnerships, and voice to change the public policies that have enabled systemic and institutional racism to persist. The anger and frustration we feel right now is raw. As so many of my thoughtful colleagues have said over the last few days of dialogue, we need to commit to change today, and not only that. In addition to speaking out at important moments like this, we must maintain this effort over time, and not simply when the world’s attention is upon it. 

History is full of moments of great pain and tragedy. It is also a story of turning points. Let us hope—and let us commit—to making this a turning point, one that we can be proud of, and one that honors the memory of George Floyd and the many victims who came before him. 

Blog | Thursday May 21, 2020

Rising to the Top: Six Big Sustainability Issues Companies Should Watch During COVID-19

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We are now in the third month since the global effects of the COVID-19 pandemic and related economic shock changed our present, and very likely our future. While there are signs of public health recovery in many places, the economic impacts of this generational event will be felt for a long time to come.

It is now possible to begin to draw some conclusions on the impacts of the coronavirus on sustainable business. First and foremost, despite the serious economic issues facing companies everywhere, there are strong signs that the commitment to sustainability remains strong. Companies continue to understand and appreciate that sustainability was a core part of resilient business strategies before the virus hit, is a primary source of strategic advantage, and will be a crucial part of rebuilding the global economy.

This has been reinforced by investors. There are hopeful signs that the mainstream investors that have upped their commitments to environmental, social, and governance (ESG) considerations remain all in. ESG-pegged funds have performed better and experienced smaller declines during the initial pandemic stock sell-off: Data indicate that almost 60 percent of the biggest U.S. ESG mutual funds performed better than the S&P 500. Data from Morningstar indicate that in March, as market activity slowed dramatically in the face of lockdowns around the world, 62 percent of ESG-focused large-cap equity funds outperformed the MSCI World Index. 

But this is not to say that sustainability won’t be changed by the deep and wide impacts of one of the most transformative three-month periods in a century: It undeniably has.

Let’s face facts: Many companies are hurting, facing existential questions, liquidity problems, and just plain limited bandwidth. In this context, many of our partners at BSR member companies have asked me, “is it tone deaf to be talking about sustainability now?” My answer has been: No, it’s not, but how you talk about it, and what you prioritize, matters greatly.

The parts of the sustainability agenda that deliver top-line value, motivate coworkers, and demonstrate to customers that a company is looking after more than short-term financial gain are the things that matter right now.

It is also the case that the issue set has to adapt. Here are the “Big Six” issues rising in importance.

• The “S” in ESG is more important than ever. The social agenda is more important at a time when tens of millions of people have lost their jobs and people are concerned about their livelihoods, health, and ongoing social cohesion issues. Labor practices will come under increased scrutiny. Women and marginalized communities have been disproportionately disadvantaged by the impacts of the crisis: Their needs demand our attention. BSR works with its members to advance diversity and inclusion, inclusive economic growth, and human rights, all of which are more central than ever to meeting the needs and expectations of employees, communities, regulators, and investors.
• The use of new technologies is accelerating, along with the need to consider human rights and privacy implications. While this topic has been growing in importance, new use cases for contact tracing and workplace monitoring will present significant questions about how to balance health and safety with privacy and human rights standards. We have been aiding companies to align the promise of new technologies with human rights principles, and this is now higher on every company’s agenda.
• Supply chains are under enormous pressure, with companies looking to ensure continuity and address dislocation of workers who have been laid off or furloughed. Tens of millions of workers in global supply chains, many of them women, face increased economic hardship, while fending off a rise in gender-based violence. Companies also need to preserve their supply chains to meet the eventual return of consumer demand. Our HERessentials project is helping to ensure that the needs of millions of women facing lost livelihoods due to the pandemic are met.
• Executive compensation and tax practices are coming under increased scrutiny as job losses reach historic proportions. For too long, we have left economic equity out of the sustainability agenda, and that has to change in the wake of historic economic dislocation. One of the ways BSR is taking on this issue is working with our member companies and other partners to redefine the social contract. Look for more from us on this subject next month.
• One of the most dispiriting statistics to come from the last three months has been the amazing drop in emissions as a result of the economic shutdown. But it is not close to what we need to achieve every year to meet the goals of the Paris Agreement. This should remind us how much innovation is needed to urgently bend the emissions curve and achieve the progress required on climate. The good news is that investors remain committed, creating a clear and direct incentive for companies to stay on track. Our ongoing efforts to assist companies with TCFD assessments, Scope 3 plans, and climate resilience continue apace, with good signs that the business commitment to climate action remains strong.
• Finally, health and well-being is rising on the agenda. Beyond the obvious need to ensure that the virus is tamed as rapidly as possible, business has more incentive to look after both the physical health, but also the well-being of colleagues who are navigating an unexpected and difficult time. Strategic investments in healthy business pay dividends. Through our Healthy Business Coalition, we work with companies who are investing in health along their value chain. Companies with healthier supply chains have more productive workforces, are better able to serve customers, and help consumers to live longer, more fulfilling lives, resulting in thriving communities. This work has taken on even greater importance in the context of the coronavirus.

There is much to play for. Many of our neighbors and colleagues are facing uncertainty, urgent health needs, and a long road back to economic vitality, all while our climate and environmental challenges remain fundamentally important.

We who promote sustainable business need to up our game. Our work remains essential and critical to business success and resilience. But that will only be the case if we adapt our approaches and the issues and solutions we bring forward. I remain confident we can meet the moment and build a better future. We have to get out of our comfort zone to make that happen.

Blog | Wednesday May 20, 2020

The BSR Conference Reimagined

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The COVID-19 pandemic is more than a health crisis, affecting nearly every aspect of society. From the economy, to education, to the way we use technology and how we conduct public and civic life—society is being reshaped in unprecedented ways.

Our work with you has never been more relevant. At BSR, we remain focused on our commitment to help businesses succeed, to become more resilient, and to build a more just and sustainable world. Indeed, we are more convinced than ever that sustainable business is the key driver of business value, and one of the best ways that companies can meet the moment and build the future.

One of the biggest ways this is affecting us, of course, is our ability to convene in person with our members, partners, and other friends in the sustainability world. 

The health and safety of our community and society at large is our top priority. For this reason, the BSR Conference 2020 is going virtual.  

While we are disappointed not to be able to gather in person, we are excited about the opportunity to reimagine every aspect of our annual event. We will shift, for this year, to a digital experience that will connect our global community in brand-new ways, with content and participants who will join us from our eight locations in Asia, North America, and Europe. There is no silver lining to a pandemic, but the virtual platform will give us an opportunity to cover some important emerging topics and to invite new participants and voices to join us in a truly global conversation.

Planning is underway to deliver a great experience that will feature the best of our in-person gathering, presented in new ways. We will keep you updated every step of the way. The Conference will be held from October 20-22, and a more complete agenda will be announced next month. To stay informed on the latest developments, sign up to receive announcements right in your inbox or visit bsr20.org.

We look forward to “seeing you” in October.

Blog | Tuesday May 19, 2020

A Post-COVID-19 Agenda for Sustainability Reporting

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As COVID-19 continues to cause significant turbulence for business and now collides with the arrival of spring “peak reporting season,” companies are experiencing a moment of introspection and posing several questions to themselves: What business risks did our Form 10-K miss? Which nonfinancial data would have helped us better determine our exposure or resilience? How might our definition of what constitutes a "material issue" change? What COVID-19 related information do stakeholders need to judge the effectiveness of our response? 

The world of sustainability reporting after COVID-19 will be very different than the world that preceded it. What should change?  

How Companies Can Improve Sustainability Reporting Moving Forward 

1. Reexamine the materiality assessment and its integration into enterprise risk management. Materiality assessments are the building block of a good sustainability report, enabling companies to identify sustainability issues that are important to both their stakeholders and to business success. As society emerges from the current crisis, materiality assessments can be overhauled in two main ways: First, the clear financial impact of "nonfinancial" environmental, social, and governance (ESG) issues during COVID-19 reinforces the need to better integrate sustainability into Enterprise Risk Management (ERM). Second, companies can use materiality assessments to explore the relationship between a company’s impacts on a sustainability issue and the impact of that issue on the business. Rather than seeing, say, supplier diversity as a “nice to have” that might fall in the middle of the pack relative to other sustainability topics, how does the issue interact with the core business or change a company’s risk exposure?  
2. Determine what information stakeholders need to judge the effectiveness of company response to COVID-19. Stakeholders will eventually look back on how companies responded during the COVID-19 pandemic—and this will require new disclosures to help readers understand how well a company responded. Stakeholders will look for new information on important sustainability issues and insights into company decision-making processes, so companies would be well served by consulting with stakeholders to find out what information they may seek in the future. For example, stakeholders may wish to understand how a company considered the needs of its most vulnerable employees or local communities, whether it undertook human rights due diligence of COVID-related decisions, and how it balanced short-term needs with long-term resilience.  
3. Significantly increase connectivity between sustainability and financial reports. A sustainability report provides an annual account of how a company responds to issues of material significance to stakeholders and serves as a reference point where companies can provide a formal description of their strategy, approach, and performance. COVID-19 has revealed just how impactful nonfinancial ESG issues can be on the financial performance of a business. Now that this connection has been made so evident, companies should use this as the impetus to more closely link nonfinancial and financial reporting. This may imply incorporating more Sustainability Accounting Standards Board (SASB) metrics into financial reporting or increasing cross-references between sustainability and financial reports. This is especially significant in the context of the EU Non-Financial Reporting Directive, which presents an opportunity to further align complementary approaches to the disclosure of sustainability information. 
4. Take inspiration from climate reporting to disclose on company resilience. COVID-19 has increased attention on risk factors, including public health threats, supply chain disruptions, and operational flexibility. To improve reporting on resilience, companies can draw inspiration from the Task Force on Climate-related Financial Disclosure (TCFD). The TCFD recommendations provide a compelling framework for companies to report their climate-related risks and strategies to mitigate them, but the COVID-19 pandemic clearly illustrates that systemic nonfinancial risks extend beyond climate change and span a wide range of social and other sustainability issues. Given the significant traction gained by the TCFD’s four-pillar framework (governance, strategy, risk, metrics and targets), we believe that a similar approach can be deployed across social and sustainability issues in order to report and manage such risks. This can include the use of scenario analysis to set out a range of plausible futures and describe how the company may respond to each, with the goal of improving resilience to the sustainability challenges society will likely face in the years to come. 
5. Collaborate with industry peers to ensure comparable COVID-19 disclosures. Stakeholders today benefit from companies using the Global Reporting Initiative (GRI) and SASB standards and TCFD recommendations. These frameworks enable companies to provide reasonably comparable and useful information. However, no such template exists to compare how companies have responded to COVID-19. Rather than every company creating their own report in their own way, companies can look for opportunities to work with industry peers to create consistent COVID-19 reporting taxonomies, disclosures, and metrics so that investors, stakeholders, and policy makers can make easier comparisons.  

Though COVID-19 has caused unprecedented disruption for many companies, we believe that more integrated, comparable, and standardized reporting will be needed to “build back better.” Such reporting can both meet the new information needs brought to light by COVID-19 and strengthen companies’ decision-making, risk management processes, and overall performance in the long term.  

As we recover, the question of whether or not the reporting field truly moves forward hinges on the extent to which financial and sustainability reporting converges and on whether reporting standards and nascent regulation accelerate this convergence. 

Blog | Friday May 15, 2020

Mitigation and Resilience Building: A Response to the COVID-19 Effects

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More than any crisis in recent history, the COVID-19 pandemic has demonstrated the urgency of creating more resilient businesses and economies. Countries, businesses, supply chains, workforces, communities—all are being affected by COVID-19 and other issues relating to resilience and COVID-19’s cascading economic, social and personal impacts, starting of course with those who have fallen ill or tragically passed, as well as caregivers and other front-line responders risking their lives.

COVID-19 is leaving tremendous disruption in its wake in other long-lasting and grievous ways. The required economic shutdowns mean loss of income and depletion of savings, not to mention the specter of widespread hunger. The cascading impacts on supply chains are manifest, as key inputs (from meats to component parts) slow to a trickle, causing broader business disruption. Meanwhile, the impacts of social distancing and remote working include, among others, acute family care challenges and rising rates of domestic abuse. 

COVID-19’s Impact on Supply Chains: Meet the Moment

Understanding the impacts of COVID-19 within the countries and supply chains producing your product are important to determining how your company can play a role in responding and mitigating current issues and investing in future resilience. The efforts your company undertakes now will have impacts on the safety, security, and livelihoods of those making your product in your operations and supply chains around the world. When looking at mitigation needs and opportunities, here are three important ideas:

1. Honor your contracts. Pay for what you’ve ordered and do not externalize additional financial liability on to your contractors and, via the contractors, the workers who produce your products.
2. Seek support payments for the impacted workforce. Vulnerable workers at the bottom of supply chains in your production line will be impacted the most by the COVID-19 crisis. Work with your industry, relevant governments, and international aid agencies to find money, resources, and other forms of support for those who need it most.
3. Triage and build lifelines. Help find support for the factories most important to your business today and in the coming future. Are there ways to connect loan guarantees, order histories, and future orders to factories to enable their resilience and workforce support?

COVID’s Impact on Supply Chains: Build the Future

The current crisis isn’t the first nor will it be the last. Investments in the resilience of your partners and their workforce will be important to overcome the next, inevitable crisis. 

• Seek to avoid the next crisis. Today it is a virus, next year it may be a typhoon, or a drought, or an earthquake, or a tsunami, or something else. Impacts from climate change are here and will continue. Business continuity planning is important to invest in at the site level, the firm level, and the supply chain resilience level. In addition to building your own business resilience, work with your vendors to build continuity plans covering their own businesses, extending to their community, and explicitly including the workforce.
• Understand potential impact, particularly those most at risk. Planning for the future means understanding the potential impacts on people—and in particular those most at risk. COVID-19 has shown, for instance, the sharp challenges faced by migrant workers, by those with the least resources, and often by women in facing economic, social, and personal hardship and even death.
• Invest in worker and employee resilience. Work to ensure 100 percent of workers in your factories and your own employees are paid via digital wages to enable easier access to financial resources and support during times of crisis. Create incentives to ensure your factories are educating their workers in the things that matter—from workplace skills training to financial literacy and savings, to health and hygiene, and including respect and the avoidance of workplace violence. Mirror this in your own operations, as the front lines of COVID-19 are everywhere and change rapidly. Invest in the skills, competencies, authority and culture of your own organization and staff to meet the moment and build the future. They are key to your future success.

Investments in the resilience of your partners and their workforce will be important to overcome the next, inevitable crisis. 

• Connect and build factory systems. Utilize and connect existing factory systems to create resilience and early warning capabilities. Your supplier’s health clinics should be appropriately resourced and trained, connected to local health authorities, and able to support their workforce. Factory community engagement strategies, staff, and resources can also be connected to disaster mitigation efforts and planning. Connection of broader supply chains to Sustainable Development Goal (SDG) targets, climate action plans, and resilience efforts will help to build resilience valuable to the supplier, the community, the workers, and the supply chain itself.
• Reprice risk in your supply chain. COVID-19 uncovers many of the hidden challenges of lowest-cost sourcing models. Unpriced risk may be embedded in the model and COVID-19 is illuminating these risks—from supplier financial resilience, workforce and community resilience, and component traceability and availability to preparedness for the next, inevitable challenge.  Understanding pricing and integrating these risks into your supply chain models is important to enabling longer term resilience.
• Break the boundaries and innovate to meet the future. The challenges we will face in the future, from climate change to pollution, a growing global population, and, in some places, aging societies, will require new thinking, innovation, and experiments. The efforts of today have obviously not succeeded at the level we need, and the imperative change is of ever greater importance.

BSR works with our member companies and their value chains via our global consulting practice and COVID-19 response. BSR’s HERproject directly connects via local partners to workers, particularly women in global value chains. In this decisive decade, we welcome the opportunity to meet the moment and the challenge of COVID-19 and build the future—and a more just and sustainable world.

Blog | Tuesday May 12, 2020

A Human Rights Impact Assessment of Facebook In Cambodia

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Earlier today, Facebook published an executive summary of a human rights impact assessment (HRIA) BSR conducted on behalf of Facebook in Cambodia and their response to those recommendations. This follows Facebook’s previous publication of BSR’s HRIA of Facebook in Myanmar and human rights review of the Facebook Oversight Board. Today Facebook also published executive summaries of HRIAs conducted in Indonesia and Sri Lanka.

BSR’s HRIA made 22 recommendations for Facebook in Cambodia across the five areas of Community Standards enforcement, protecting civic space, engagement with stakeholders, promoting systemwide change, and preparing for upcoming risks and opportunities. Facebook’s response to the HRIA clearly sets out the meaningful steps the company is taking to implement the recommendations and its plans for more in the future.

We welcome these disclosures as part of Facebook’s increasingly strategic approach to human rights due diligence, one that covers the main elements expected by the UN Guiding Principles on Business and Human Rights (UNGPs): assessing human rights impacts, taking action, tracking effectiveness, and communicating externally.

Taken in combination, these disclosures indicate three trends in business and human rights that we believe will take hold over the coming years.

• Reporting the results of human rights assessments, not just the process. Over recent years, companies have increased public communications that describe their human rights due diligence process, such as when, how, and where human rights assessments are conducted. However, it remains rare for companies to disclose the findings of these assessments and the actions that are subsequently taken. The proposed new Global Reporting Initiative Human Rights Standard includes reporting on the actual and potential adverse human rights impacts identified and actions taken, and so we both welcome Facebook’s disclosures and see them as a sign of things to come. Facebook’s decision to publish executive summaries, rather than the full HRIA, also points towards an approach that allows for increased disclosure by companies while protecting stakeholder safety and commercial confidentiality at the same time. It’s a good balance, and we expect increased alignment around this approach. Google’s recent HRIA of a celebrity recognition tool is another notable indicator of this trend.
• Considering respect for human rights in entire systems, not just individual companies. Facebook’s HRIAs identify the company’s actual and potential adverse human rights impacts—however, they also situate these impacts as part of a broader system. The recommendations contained in the HRIAs are notable for the extent that they involve action by multiple parties, not just Facebook. As we have previously written, while HRIAs are typically undertaken for a single company, the solutions often need to be applied at the system level. This also implies that not only do multiple actors need to be involved, but that single companies have the potential to exact positive influence on the entire “protect, respect, and remedy” human rights ecosystem.
• Connecting global and local approaches. While the HRIA BSR conducted was focused on Cambodia, we made five recommendations on topics, such as human rights defenders, child rights, and advertising on Facebook’s platforms, that are relevant everywhere. While each country has its own unique context, Facebook’s increasing portfolio of country-level HRIAs provides good insight into the direction that a global human rights program can take.

The UNGPs state that companies should track the effectiveness of their human rights approach by drawing upon feedback from external sources, including affected stakeholders. We hope that the publication of these HRIAs and Facebook’s response to them enhances this feedback process and informs improved dialogue among all stakeholders. We look forward to seeing progress over time.

Blog | Tuesday May 12, 2020

COVID-19: External Resources for Business

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As part of our efforts to support businesses and stakeholders during the COVID-19 crisis, we at BSR are compiling and sharing a list of relevant external resources in addition to the thought leadership from BSR experts, members, and partners provided on our COVID-19 Content Hub. Below is a selection of external blogs, articles, and other materials providing useful perspectives for companies looking to meet the moment and build the future. We will update this selection on an ongoing basis.

Climate Change

• Ceres: Business Disruption and a Just Transition (Video)
• Levi Strauss & Co.: Employee Hardship Fund Playbook (Playbook) 
• Morrison & Foerster: Public Charity Side Car (Article)
• UN Global Compact: Uniting Business and Governments to Recover Better (Statement)
• UNEP: COVID-19 Is Not a Silver Lining for the Climate, says UN Environment Chief (Article)
• WBCSD: The Consequences of COVID-19 for the Decade Ahead (Brief)

Human Rights

• Business Fights Poverty: Business and COVID-19: Supporting the Most Vulnerable (Guide)
• Human Rights Watch: COVID-19 Puts Millions of Global Supply Chain Workers at Risk (Article)
• IHRB: Impact of COVID-19 on Migrant Workers in South East Asia (Brief)
• IHRB: Respecting Human Rights in the Time of the COVID-19 Pandemic: Examining Companies’ Responsibilities for Workers and Affected Communities (Paper)
• ILO: COVID-19 and the World of Work: Global Impact and Policy Recommendations (Primer)
• Investor Alliance for Human Rights: Investor Toolkit on Human Rights (Toolkit)
• IRIS: COVID-19: Guidance for Employers and Business to Enhance Migrant Worker Protection during the Current Health Crisis (Guide) 
• ISS Governance: Workers' Rights and COVID-19: Testing the Resolve of Corporate Labor Policies (Report)
• Levi Strauss & Co.: Employee Hardship Fund Playbook (Playbook) 
• Morrison & Foerster: Public Charity Side Car (Article)
• OAS: OAS Launches Practical Guide to Inclusive Rights-Focused Responses to COVID-19 in the Americas (Press Release)
• Pillar Two: Managing Business-related Human Rights Risks During and After C-19 (Hub)
• UNDP: Human Rights Due Diligence and COVID-19: Rapid Self-Assessment for Business (Tool)
• UNICEF/ILO/UN Women: Family-Friendly Policies and Other Good Workplace Practices in the Context of COVID-19 (Document)
• WBCSD: The Consequences of COVID-19 for the Decade Ahead (Brief)

Inclusive Economy and Worker Wellbeing

• AIHA: Back to Work Safely (Hub)
• ILO: Almost 25 Million Jobs Could Be Lost Worldwide as a Result of COVID-19 (Article)
• ISS Governance: Workers' Rights and COVID-19: Testing the Resolve of Corporate Labor Policies (Report)
• Fast Company: In Coronavirus’s Wake, Gig Workers Are Demanding Paid Sick Leave (Article)
• Levi Strauss & Co.: Employee Hardship Fund Playbook (Playbook) 
• Morrison & Foerster: Public Charity Side Car (Article)
• Sodexo: Reopening with Resilience: Webinar Takeaways (Summary)
• The Life I Want: How Will the Future of Work Affect Our Mental Health? (Blog)
• Triple Pundit: EdTech Companies Easing the Transition to Distance Learning in Wake of COVID-19 (Article)
• UN Global Compact: Uniting Business and Governments to Recover Better (Statement)
• UNICEF/ILO/UN Women: Family-Friendly Policies and Other Good Workplace Practices in the Context of COVID-19: Key Steps Employers Can Take (Document)
• WBCSD: The Consequences of COVID-19 for the Decade Ahead (Brief)

Supply Chain Sustainability

• Better Buying: Guidelines for “Better” Purchasing Practices Amidst the Coronavirus Crisis and Recovery (Guide)
• Fair Wear: Garment Industry Coalition Lays out Joint Priorities for the Garment Sector (Statement)
• Flexe: Supply Chain Disruption Q&A: From Redundancy Comes Resilience (Blog)
• ISS Governance: Workers' Rights and COVID-19: Testing the Resolve of Corporate Labor Policies (Report)
• Levi Strauss & Co.: Employee Hardship Fund Playbook (Playbook) 
• Morrison & Foerster: Public Charity Side Car (Article)
• Novartis: COVID-19 Good Practice Guidance for Third Parties (Guide)
• WBCSD: The Consequences of COVID-19 for the Decade Ahead (Brief)
• Worker Rights Consortium: Which Brands Are Acting Responsibly toward Suppliers and Workers? (Tracker)
• Worker Rights Consortium: Who Will Bail Out the Workers that Make Our Clothes? (White Paper)

Sustainability Management

• BlackRock: BlackRock Investment Stewardship: Engagement Priorities for 2020 (Guide)
• Bloomberg: Older ESG Funds Outperform Their Newer Rivals in Market Tumult (Article)
• Just Capital: The COVID-19 Corporate Response Tracker (Tracker)
• Levi Strauss & Co.: Employee Hardship Fund Playbook (Playbook) 
• Morrison & Foerster: Public Charity Side Car (Article)
• Public Private Strategies: Employer Resource Round Up (Hub)
• RI: Pandemic Could Be Tipping Point for ESG (Survey)
• Target: Considerations for Retail Operations Post COVID-19 (Guide)
• WBCSD: The Consequences of COVID-19 for the Decade Ahead (Brief)

Women's Empowerment

• CARE/IRC: Global Rapid Gender Analysis for COVID-19 (Tool)
• Data2X: COVID-19 Resources: Gender Data, Gender, and Data (Hub)
• Levi Strauss & Co.: Employee Hardship Fund Playbook (Playbook) 
• Morrison & Foerster: Public Charity Side Car (Article)
• UK Government: Employers Do Not Have to Report Gender Pay Gaps in 2020 (News)
• UN Women: COVID-19 and Gender Rapid Self-Assessment Tool (Tool)
• UN Women: Gender-Sensitive Private Sector Response to COVID-19 for Accelerated and Inclusive Economic Recovery (Primer)
• UN Women/BSR/WeEmpowerAsia: The Business Case for Integrating a Gender Lens into Private Sector COVID-19 Recovery Plans (Webinar)
• WBCSD: The Consequences of COVID-19 for the Decade Ahead (Brief)
• World Bank: Gender and COVID-19 (Brief)

Blog | Tuesday May 5, 2020

COVID-19 and the Climate Crisis: Building Resilience with People at the Core

Preview

In what feels like the blink of an eye, COVID-19 has dislocated our daily lives, our economy, and the way we do business, with little visibility on when the crisis will be resolved. Our experience with this pandemic makes one thing very clear, however—we need to become more resilient, and people have to be at the core. Despite warning after warning of a potential pandemic, we weren’t ready for this public health crisis: governments, businesses, and people alike.

We’re similarly unprepared to respond to the climate crisis, especially as we enter the “decisive decade,” where action to reduce greenhouse gas (GHG) emissions and to adapt to immutable climate change impacts has never been more critical. Business has a critical role to play in helping to create a system that is better prepared to prevent and cope with the crises to come.

Another thing is clear: systemic socioeconomic inequality further exacerbates the dangers posed by both COVID-19 and the climate crisis to vulnerable populations. Both expose the underlying inequalities that exist today, creating disproportionate impacts on low-income communities, people of color, women, the elderly and those with pre-existing health conditions, who are more susceptible to both the virus and its knock-on effects.

Systemic socioeconomic inequality further exacerbates the dangers posed by both COVID-19 and the climate crisis to vulnerable populations.

In some parts of the United States, people of color are more affected by the virus, including lack of access to medical care and other long-standing inequities within health and economic systems. Low-income populations are less likely be able to work from home, increasing their potential risk of exposure. Vulnerable populations are similarly disproportionately affected by the impacts of climate change. When Hurricane Katrina hit New Orleans in 2005, low-income people and women of color and their children bore the brunt of the disaster, forced to flee their homes to often unsafe, temporary living situations and exposing themselves to increased gender-based violence.

People with disabilities and the elderly may be more likely to struggle in the face of COVID-19 response measures, such as social distancing, since many rely on the support of others for essential tasks and often already have compromised immune systems. These factors can pose similar challenges in the face of climate-related disasters.

The COVID-19 crisis has also greatly affected migrant workers and refugees, preventing those seeking asylum from gaining access to countries as borders closed over fear of virus spread. This leaves refugees in unsafe situations without basic needs. A similar situation is unfolding with the climate crisis, which is projected to increase the number of refugees, adding stress to already overburdened development and aid systems.

Whether it’s a pandemic or climate-related impact, those with the least, and those faced with the most extreme socioeconomic barriers, will suffer the most. The impacts these populations face have the potential to disrupt business, from operations and supply chains down to the vital communities on which business depends.

COVID-19 and Climate Change Responses: Shared Learnings

Both the pandemic and climate change manifest themselves in physical impacts. And although the impact of the pandemic is here and now, while climate impacts vary in degree and timeframe (i.e. acute events like extreme weather events, flooding, drought, and changes in vector-borne diseases; chronic events like sea-level rise), there are clear similarities in the infrastructure and systems required to mount an effective response.  

One common learning is that we need to redesign the way we recover from these shocks. In both cases, our recovery must be just and inclusive of the most vulnerable, taking a more holistic approach and putting people at the center of our forward-looking plans, both in the short and long term.

Planning for a more uncertain future from unknown shocks, including those caused by climate change, will help businesses and society become more prepared with less stress on people and the planet.

The economic downturn has only begun, but it is obvious that the economy and jobs, people’s livelihoods, are critical to our recovery from the pandemic, as well as when we design climate solutions. More than 30 million Americans have filed for unemployment, with certain industries more affected than others. Our recovery must be designed to ensure that people don’t bear the brunt of the adjustment cost of getting back to work post-pandemic. This is also true within the climate crisis as we transition away from fossil fuels to renewable energy. It’s critical that we ensure that the people and communities dependent on high-carbon jobs aren’t left behind. Addressing the climate crisis has the potential to create new markets and jobs within the renewable energy sector—jobs that won’t depend on the volatile carbon market or carbon-intensive assets. Creating preventative plans and systems that both address current unemployment from COVID-19 and help society respond better to future inevitable climate impacts will create a more resilient and healthier economy.

And finally, with the pandemic halting business as usual, we’re already seeing reduced GHG emissions, even if temporary. While we know that this isn’t enough to keep global warming in line with the Paris Agreement goals, it’s likely that some changes will remain in practice and that can have a lasting, positive effect on society. These include the increase in remote working and decrease in demand for in-person meetings, with technologies having already improved in the weeks during the pandemic (although equitable access to technology remains an issue in many communities and households). Planning for a more uncertain future from unknown shocks, including those caused by climate change, will help businesses and society become more prepared with less stress on people and the planet.

Resilient Business Strategies for a Better Recovery

There is a tremendous opportunity for business to take the lead. While this pandemic has revealed opportunities where we can improve our approach to resilience planning, it has also proven that both businesses and governments can act, and they can act quickly. Imagine the difference in our response had there been a holistic plan to address the pandemic? We can and must prepare for the next pandemic, or the impacts of climate change, with resilient business strategies that put people at the center.

Here are some mutually reinforcing interventions businesses can take considering COVID-19 and the climate crisis:

• Understand your company’s vulnerabilities to short- and long-term shocks across your entire value chain by undertaking the necessary risk assessments and scenario planning. This strategic foresight can help to identify potential future shocks and lead to the development of more holistic resilience strategies. This includes the consideration of how sudden changes can magnify one another, including how climate change can potentially exacerbate a company’s existing vulnerabilities. BSR’s Sustainable Futures Lab helps companies understand how these changes can affect businesses, and the Taskforce for Climate-Related Financial Disclosures (TCFD) embeds scenario analysis into its recommendations. The benefits go beyond looking at future climate impacts but also examining how multiple shocks can compound each other.
• Strengthen your company’s resilience plans through collaboration with other relevant stakeholders, including other businesses, government, and civil society. For example, BSR’s Value Chain Risk to Resilience platform collectively aims to build resilience holistically through climate risk assessments, business integration, and governance from the top to their on-the-ground communities fundamental to their existence.
• Ensure that the most vulnerable are at the center of core business resilience planning. Invest in the resilience of these vital and surrounding communities, including employees, within your business’ operations, supply chain, and markets—the solutions should address the inequalities, health systems and well-being of the people.
• Help create jobs post-pandemic by investing in renewable energy—this will provide new, long-term jobs. Transitioning away from fossil fuels and procuring renewable energy should be done through an approach that puts people at the center by respecting human rights and that leaves no one behind.
• Formalize new ways of working that have co-benefits both for your people as well as the environment, starting with less business travel and better videoconferencing. Embedding this into your system now will help reduce your emissions and climate impacts.

As we scramble to contain the current public health crisis and the growing recession, we cannot afford to wait to address the climate crisis. It is clear that solving any future crises, and being truly resilient, will require all hands on deck for the type of systemic change necessary. Efforts will be needed from governments of all levels and from business of all kinds, including those with massive supply chains and those that make up the local communities on which we depend for our daily existence, and it will also come down to the decisions that we make on an individual basis. Redesigning our systems to address the systemic inequalities and vulnerabilities our society faces will help us to manage, and to recover from, the next crisis. Let’s come together to do the work now for a better future—one that boosts the resilience of those that need it most.

Blog | Monday May 4, 2020

Sustainability Reporting and Early Lessons from COVID-19

Preview

Public scrutiny of how businesses are responding to the COVID-19 pandemic is bringing renewed attention to the importance of corporate transparency on sustainability issues. Effectively meeting these expectations starts with understanding two key dimensions of sustainability reporting: how companies are responding now and defining how companies should respond in the future.

We have observed several trends emerging from the pandemic and compared them with best practices on reporting. We are sharing these insights here to assist company sustainability teams as they strive to keep stakeholders informed—despite, in many cases, the reality of limited time and diminished resources.

What We’re Seeing Now

1. Companies adjusting their reports. COVID-19 has shaken all businesses, causing some to delay or scale back their formal sustainability reporting. Companies that recently released a 2019 report or are in the final approval stages are primarily acknowledging COVID-19 in one of three places: the CEO letter, as a call-out box or case study within the report itself, or in the report’s corresponding press release. Companies are also linking to informal and regularly updated webpages that provide specifics on their immediate COVID-19 responses.
2. Investors watching closely. Investors remain eager for the latest performance data and have reiterated the importance of engagement on long-term environment, social, and governance (ESG) issues despite the havoc wreaked on businesses’ day-to-day operations. BlackRock notes this proxy season will focus on board composition and quality, environmental risks and opportunities, corporate strategy and capital allocation, compensation that promotes long-termism, and human capital management. JUST Capital is tracking how employers are treating stakeholders amid the current crisis, and Truvalue Labs has introduced a free Coronavirus ESG Monitor that captures impact using the Sustainability Accounting Standards Board's (SASB) material issue categories. The ESG issues that investors were looking at prior to COVID-19 still hold—indeed, the current crisis has amplified their importance to investors’ decision-making. 
3. An emphasis on social criteria. The COVID-19 crisis is placing heightened importance and increased scrutiny on how companies are addressing the “S” in ESG. News outlets and investors alike are focusing on companies’ treatment of employees, suppliers, and the communities in which they operate, naming and shaming (or faming) good and bad actors along the way. Reputation is an important driver of this focus, but business continuity, economic inclusion, and public safety considerations are also critical. Given mounting investor, civil society, and media attention, companies are increasing their focus on social issues to demonstrate responsiveness to the top priorities of the day.

What We’d Like to See in the Near Future

1. Consistency and completeness. Investors still want comparable year-on-year data and will be especially interested this year in gauging companies’ resilience to shocks. Although managing COVID-19’s immediate impacts remains top priority for many public companies, reporting historical ESG data and performance remains essential. While a slight delay of this year’s reporting is understandable, companies should still strive for the same level of coverage as previous years and continue to improve their disclosures moving forward, with the expectation that their performance on key social issues will be even more thoroughly examined than usual.
2. Accountability during the new reality. Reports should provide an enduring account of how companies are responding to the COVID-19 crisis. The extent to which companies do this now or in the future depends on where they are in their reporting cycle: reports near completion today (e.g. by companies that operate on a calendar-year basis) will provide less insight than those with more time available (e.g. by companies with a fiscal year that doesn’t match the calendar year and report later in the year). Regardless of reporting calendar, companies will need to explain decisions made during this time and make forward-looking statements about how they intend to help "build back better" in the future. Sustainability reports will become an essential venue for accountability when looking back at company actions during COVID-19.
3. Numbers backed by narrative. Stark reductions in business operations and travel as a result of COVID-19 will likely reduce companies’ greenhouse gas emissions and other environmental impacts, in many cases accelerating progress towards sustainability goals. Similarly, COVID-19 will impact many other metrics, such as diversity, employee engagement, and supply chain labor compliance. Going forward, it will be essential for companies to provide a narrative that identifies what change in historical performance relates to COVID-19 factors and what change results from previously existing plans—numbers on their own will be impossible for readers to interpret. It will also be important to provide a forward-looking narrative explaining their potential trajectory once COVID-19 is behind us.
4. Meeting stakeholders’ information needs outside the annual reporting cycle. Honest and timely communications are more important now than ever. Reporting is about meeting the information needs of external stakeholders, and in the current crisis, that may entail disclosure outside the boundaries of the formal sustainability/annual report, such as dedicated COVID-19 webpages. While not a substitute for formal reporting, well-designed websites and other responsive communications can be a powerful tool to distill the most material information to stakeholders, enabling them to make informed decisions and provide feedback to companies in the near term.

Sustainability reporting exists so that stakeholders can make informed judgments about how companies impact the world around them and understand how the changing world impacts the sustainability performance of companies. In this sense, sustainability reporting is more important now than it has ever been, and looking forward, it will be critical to understand how COVID-19 may impact sustainability reporting over the long term. Stay tuned for a follow-up blog post on how to “build the future” of post-COVID sustainability reporting.