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Blog | Thursday August 10, 2017

Stakeholder Groups Extractives Companies Should Engage to Be Inclusive and Effective

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Stakeholder engagement is a cornerstone of BSR’s work, and our recent report looks at the future of stakeholder engagement, with input from eight companies that participated in our collaborative initiative dedicated to that subject.

Often, engaging with the right groups of stakeholders can mean the difference between a successful project with community support and a project with lengthy delays that threaten (or prevent) its existence. In the mining sector, stakeholder engagement is particularly relevant given the close proximity to and impact on local communities through the use of resources such as water, energy, and land.

In our work with extractives companies, executives often point to the importance of stakeholder engagement in developing comprehensive social risk management processes. Building relationships with community members can enhance trust and foster local support for a project.

While every company’s specific stakeholders depend on its operating circumstances, mining companies should consider the following groups when developing an engagement strategy. Within these groups, it’s important to include women, the elderly, and youth to access a range of perspectives.

Stakeholder Groups Extractives Companies Should Engage

• Employees, contractors, and business partners: Internal stakeholders and those stakeholders with a business relationship with the mine or company are often overlooked, but they are important to consider and interact with on a regular basis. Often, these groups are the primary contact point with community members, and many of them live in the community itself. When companies have a positive relationship with these groups, it not only improves direct relations with them; it can have a wider impact on the community’s perception of the company.
• Communities directly affected by mining operations: For communities to accept a mining project, they must perceive the project’s potential benefits as greater than its risks. Companies can support this by engaging community members, knowing and proactively addressing their concerns, and creating a shared vision of the community’s long-term future. For example, our work in Chile with Freeport-McMoran’s community relations team helped the organization shift from a philanthropic to a participatory approach that satisfied the needs of the company and the community. 
• Advocacy organizations, including religious and environmental groups: It can be challenging to engage effectively with local and international groups that oppose a mining project. But by engaging with these organizations, companies can understand new perspectives, and can address concerns in a proactive way, even if neither party changes its position.
• Small-scale miners: Before large-scale mines arrived in many locations, these areas were used for generations by small-scale or artisanal miners. Artisanal miners are often displaced, losing access to the land that provides their livelihoods. The AngloGold Ashanti partnership with artisanal miners in Ghana is one example of a new way to approach collaboration with this stakeholder group.
• Food and agriculture industry and farmers: The mining industry can compete with agriculture when it comes to land use, access to water, and availability of workers. Mining operations can affect agriculture livelihoods, as well as food access and security. Many extractives companies have found ways to work with the agriculture industry to address issues like water shortages and quality, as is detailed in a recent report from the International Council on Mining and Minerals and the International Finance Corporation.
• Government: The government is an important stakeholder to engage as a regulator and the beneficiary of royalties. In many cases, the government is responsible for providing services in the community, and if the government is absent, stakeholders often look to the company to fill that role. While mining companies should not replace governments, it is important for the businesses to understand government priorities and plans, identify overlapping and shared interests, and determine clear roles and responsibilities in ongoing maintenance and funding of community investments.
• Indigenous people: In addition to individual universal human rights, indigenous peoples have special and collective rights to their land and its resources. Given these rights, as well as the unique impacts that mining projects can have on indigenous peoples, companies should take special consideration in relation to community engagement and consultation through free, prior, and informed consent (FPIC). (For more details on what FPIC can look like in practice, see the law firm Foley Hoag’s recommendations regarding engagement with indigenous peoples in the context of the U.S. Dakota Access Pipeline Project.) Developing an honest, transparent dialogue and understanding perspectives, cultures, and goals are important steps for meaningful engagement that can lead to positive outcomes, including agreements that help communities manage the impacts and receive the benefits associated with a mine.

Engaging effectively with these stakeholder groups can increase a company’s understanding of the likely impacts of its activities, ideally maximizing the benefits of investment while minimizing consequences.

To continue this conversion, join us at the BSR University session on the “Future of Stakeholder Engagement” in Huntington Beach, California, on Tuesday October 24.

Blog | Tuesday August 8, 2017

Leveraging Mobile for Workforce Engagement: Opportunities and Recommendations from HERhealth

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Three years ago, BSR launched a partnership with Qualcomm Wireless Reach to amplify the outcomes of BSR’s HERproject program in China through mobile technology. Our work together focused on enhancing HERhealth, the pillar of HERproject that aims to empower low-income women working in global supply chains to take charge of their health.

Through this collaboration, we developed a mobile app to digitize the HERhealth curriculum so that workers could conveniently access health information and a range of other features to improve access to health services, including a map of hospitals and clinics near the factories, and links to official websites where women can make doctors appointments online. We also interviewed representatives from companies participating in HERproject to both understand how they are currently using technology in their supply chain initiatives and identify perceived barriers and opportunities for using it in workplace engagement programs.

Here are some of our key takeaways:

• Mobile technology has clear benefits for workers and suppliers: Based on feedback from our HERhealth app, we know that workers value convenient access to health information and the ability to share content. 95 percent of workers we surveyed reported that the app helped them increase and retain the health knowledge they acquired through HERhealth. 51 percent reported that the app helped increase their confidence in using mobile technology. Mobile apps can also improve workers’ access to financial resources, as well as raise awareness of important company policies. For employers, mobile applications and online surveys can help them collect information on workers’ views and satisfaction levels.
• There is an opportunity to better capture the impact of these interventions: Most brands that use mobile technology in their supply chains do so to gather data from workers, enhance compliance processes, assess the impact of worker programs, or communicate simple messages using SMS. However, there seems to be a gap in translating whether the content shared or the data collected led to improvements in workers’ lives.
• Gamification can be an incentive: A fun element can help incentivize workers to download and use mobile apps. Workers often do not have access to their phones during the workday, but an entertainment or competition feature can help encourage them to use educational applications during their free time.
• Lack of resources, support, and integration are obstacles to success: The greatest barriers to implementing and scaling technology-based programs are cost, resource intensity (including time involved to train users and factory management about the technology), low uptake among workers, lack of support from factory management, and difficulty integrating with other factory-based systems, e.g. training and compliance.

Although we still have more to learn about how to truly maximize the positive impacts of these solutions, we would recommend that companies contemplating these investments consider the following:

• Fully engage factory management from the start: Provide factory management with a comprehensive introduction to a mobile tool before introducing it, focusing on how the tool works and the value it can provide to the factory and to workers. This can also help prevent the perception that the tool is intended for monitoring or surveillance.
• Integrate mobile tools into existing channels used by workers: Several brands commented that mobile tools work best when they link to applications already widely used by workers, such as Facebook, WeChat, or WhatsApp. This can make the tools use feel more natural so they can become part of workers’ normal daily behaviors.
• Keep content simple and clear: When using mobile technology or applications to push messages to or collect information from workers, content and questions should be simple and straightforward to ensure clear understanding by workers and management.
• Tablets or computer stations can be alternatives to mobile phones: In factories or countries where mobile smart phone proliferation is low, companies can consider providing tablets or computers as another vehicle to increase digital access. Brands can also consider donating used computers or partnering with technology companies to set up computer stations to encourage additional learning on topics important to workers.
• Partner with others to scale effective mobile technology solutions: The costs of developing new technologies and introducing them at scale in global supply chains are significant. Companies should research existing technology solutions that have been successful and identify peers with whom they can collaborate and share costs.

By creating a mobile app for factory workers in China, BSR and Qualcomm Wireless Reach have been able to improve workers’ access to health information, creating value for workers and their employers. Have you used mobile technology to enhance worker engagement programs? We’d love to hear from you!

Blog | Wednesday August 2, 2017

How to Build Effective Sustainability Governance Structures

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Successful integration and effective management of sustainability at a company requires having committed leadership, clear direction, and strategic influence—and none of this will happen without a robust governance structure. Sustainability governance helps a company implement sustainability strategy across the business, manage goal-setting and reporting processes, strengthen relations with external stakeholders, and ensure overall accountability.

How and where sustainability fits into the overall corporate structure can be very revealing of a company’s direction and priorities. It’s important to keep in mind that there is no cookie-cutter structure that can be applied; every company must tailor its approach for what makes most sense given its business model, structure, resources, and level of sustainability integration into the business.

Based on BSR’s sustainability management work with our member companies, here are four considerations to keep in mind when building effective governance structures:

1. Commitment begins at the top. Reporting to the CEO or other key C-suite leadership can help demonstrate that a company is serious about sustainability.
2. Accountability must be established and communicated clearly. Accountability helps ensure that sustainability is integrated with other business goals. Including sustainability performance into the company’s annual goals and employee performance review and compensation processes may be helpful mechanisms.
3. Alignment between the structure and the business is imperative. Sustainability governance structures that align with and complement the existing business model and organizational structures can be more successful than creating redundant or competing structures.
4. Flexibility to adapt and build up on the sustainability program across business units and regions can advance the sustainability agenda. Allowing for some adaptation can help ensure the sustainability program’s relevance to a business unit’s own strategies or region’s local conditions. It also can generate employee engagement.

With these considerations in mind, below are examples of best practices in forming sustainability governance structures:

• Head of Sustainability: Having a dedicated “head” is necessary to ensure there is focus on driving sustainability strategy and advancing the company’s program—it can also signal the company’s commitment. A majority of top global corporations with which BSR works have dedicated sustainability leaders with varying levels and titles, like Chief Sustainability Officer. These people can be the internal and external “face” for sustainability for the company.
• Formal Board Committee: Sustainability oversight by the board of directors increasingly is integrated across several formal board committees, but also can be accomplished through a dedicated committee. Board committees can be an important vehicle for educating the board on sustainability issues and helping demonstrate corporate commitment to sustainability at the highest levels. Companies that have boards that review and monitor various aspects of their CSR programs include American Express, which has a dedicated Public Responsibility Committee, and Shell, which has a Corporate and Social Responsibility Committee.
• Cross-Functional Executive Sustainability Committee: Below the board level, having a cross-functional executive committee that engages leadership across business units, regions, and functions provides further oversight and strategic guidance. It also mobilizes employees to implement strategies. The functions involved can vary, but may include risk management, supply chain, operations and facilities, marketing, public affairs and communications, human resources, environmental health and safety, and investor relations. For example, Bank of America has a Global Environmental, Social, and Governance Committee led by the vice-chairman and composed of senior leaders across the company.
• Sustainability Teams: Having a core team can help coordinate daily activities and implement companywide initiatives. While a dedicated team is very common, it’s important for it not be siloed, but rather integrated and engaged with business units and functions. NIKE Inc., for example, has a Sustainable Business and Innovation team that plays a key role in helping integrate sustainability across the company’s value chain, from innovation to retail.
• Sustainability Supporting Structures: Working groups or committees, which may have a dotted-line reporting relationship to the head of sustainability, can assist integration of strategy and goals by supporting and even substituting sustainability teams. Individuals in these support structures may be the “owners” of priority sustainability topics and are responsible for implementing strategies, tracking performance, and engaging employees. Representatives may come from real estate and facilities, communications, human resources, risk management, supply chain, and other groups. IBM, as one example, has a Corporate Responsibility Working Group that meets monthly.
• External Advisory Councils: While external advisory councils may not officially be part of the governance structure, they can serve as a valuable mechanism to advance the company’s agenda and get outside perspective on a variety of ESG issues. Dow Chemical, for example, has a Sustainability External Advisory Council composed of global thought leaders from various organizations, such as environmental NGOs, academia, businesses, and governments.

Developing sustainability governance structures may take time, but it can help ensure successful management of ESG issues at your company. How does governance help you accomplish your goals?

Blog | Wednesday July 26, 2017

Luxury, Sustainability, and Desirability: Two New Rules of the Game

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On July 11, BSR brought together a group of luxury brands at Paris’ “Salon du Luxe” conference to talk about the new rules of the game when it comes to desirability, sustainability, and luxury.

In the past several years, the growth of the luxury industry has slowed, and aspirational brands such as Michael Kors and the Hoxton Hotels have disrupted the sector with different interpretations of “luxury” products and services that offer more open and experiential approaches or less expensive products. At the same time, industry demographics are changing: Millenials and Gen Z now account for about 30 percent of luxury shoppers and will represent 45 percent of the market by 2025. Luxury brands need to account for the preferences and shopping habits of these younger generations, who are more eco-conscious but also less loyal and more digital.

Some brands are suffering in this changing context. A Nelly Rodi/IFOP study based on a trends analysis and survey of 1,000 global luxury consumers found that consumers no longer find many traditional brands desirable. Instead, brands like Apple are capturing the hearts and minds of luxury clients.

So, how can traditional luxury brands adapt and stay relevant? During the Salon du Luxe event, we discussed two emerging and related rules of the game when it comes to changing consumer psychology and behaviors. First, sustainability creates desire; second, to be desirable, brands must be sustainable. These rules—two sides of the same coin—describe desirability for products and services in terms of both demand and supply.

Rule No. 1—The Demand Side: Sustainability Creates Desire

In some respects, Amazon’s acquisition of Whole Foods perfectly exemplifies status-seeking consumers’ new mood when it comes to all things organic, eco-conscious, and local: “I want it.”

Luxury status today is increasingly expressed in the “language of conscious consumerism.” Trendwatchers say luxury consumers are keen to express who they are in terms of being “ethical, creative, connected, and tasteful.” They are less keen to simply possess more goods.

Why do these choices symbolize luxury? Consumers are expressing their high education levels and cultural awareness through their purchases and lifestyle, which include everything from yoga to biodynamic wine. Brands are beginning to recognize this shift in mindset, which affects not only their clients, but also their employees.

During our panel discussion at Salon du Luxe, brands reported that customers are starting to ask more questions about the origin of ingredients and raw materials, animal welfare, and social and environmental impacts of products more broadly. Sandrine Noel, environment manager at Louis Vuitton, said that they can even “observe new demands from their 'VICs'—Very Important Customers,” like actress Emma Watson, who recently requested a selection of conscious garments.

Rule No. 2—The Supply Side: To Be Desirable, Brands Must Be Sustainable

Over the past several years, many luxury brands have adopted stronger environmental and social practices, prompted by a strong business case and stakeholder demands. Luxury brands are investing in sustainability to protect their exceptional quality raw materials from climate change, to respect implicit client expectations about social and labor practices, and to support community and cultural life alongside their top clients. For Jerome Schehr, CFO of the Shangri-La Hotel Paris, “luxury brands now have to be respected and respectable if they want to be desirable in the eyes of their customer.” From his perspective, companies can foster respectability by adopting a robust and coherent sustainability approach.

Indeed, a new argument in favor of brands adapting strong environmental and social practices is emerging: Sustainability is a lynchpin of desirability. The Nelly Rodi/IFOP study recommends that brands improve their desirability by activating certain levers that include proximity and taking a stand. Proximity is about how a brand positions itself from one of distant authority to one that facilitates sharing and interaction. Delving into the Hoxton Hotel example, the hotels’ positioning and communications reflect a warm, interactive mood, made tangible through curated events that are open to the public, lots of lobby space for communal working, and a tone that solicits guest feedback.

Taking a stand is about how a brand manifests its point of view on the world, makes commitments (whether to values, culture, the environment, ethics, or society) and shares it values. Tiffany and Company represents an envy-worthy example through its public activism on climate change, support of eliminating coral from jewelry, and work to protect special places such as Bristol Bay in Alaska. In this sense, sustainability commitments and activities are an ideal ally for a brand looking to reinforce its desirability.

Increasing the “supply” of sustainability in luxury is both about the substance of the company’s actions and its public communications about its activities and values. This presents the next question luxury brands and marketers need to tackle: how to credibly communicate on sustainability activities, ethics, and values in ways that fit with brand DNA and reinforce brand equity. Brands also need to summon their courage. Most companies are working to improve their environmental and social practices, and have long roads ahead. This shouldn’t stop brand owners from using their reach and influence to speak out in authentic ways that move the agenda forward.

Cécile Koenig, Guerlain’s skincare director, international marketing, explained that her company has made commitments to protect biodiversity, with a focus on its iconic raw materials such as orchids, vetiver, sandalwood, and lavender. These are the kinds of commitments that not only help protect luxury supply chains, but also enhance Guerlain’s ability to connect with customers and reinforce the brand’s appeal.

By following these two new rules of the game, luxury companies have the opportunity to expand the market for sustainable goods and services—something that’s desirable for customers, business, and the planet.

To learn more about sustainability and desirability, contact us or read about our Responsible Luxury Initiative.

Blog | Tuesday July 25, 2017

The State of Sustainable Business in 2017: Results from the Ninth Annual BSR/GlobeScan Survey

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Just how much change can happen in one year? The past 12 months have been incredibly volatile, with political, economic, technological, social, and environmental disruptions creating both challenges and opportunities for companies. BSR and GlobeScan’s State of Sustainable Business Survey 2017—our ninth annual survey of BSR members—explores what these changes mean for sustainable business.

The great news is that BSR members remain steadfast in their commitment to sustainability and recognize that business must play the leading role in advancing sustainability in the future. The question, therefore, is: How can business lead in this dynamic environment?

The State of Sustainable Business Survey, released today, includes responses from nearly 300 business leaders representing 151 global companies—more than 60 percent of BSR’s global membership network.

Interestingly, when asked about priorities for the sustainability function in 2025, most respondents said they expect to focus on the same kind of activities they are addressing today. But given the rapid pace of change, this will not be enough. To address the needs of 2025, businesses will need to evolve their sustainability efforts. Today’s incremental approach to improvements will be insufficient. 

The world is changing, and to keep pace, sustainability strategies must as well.

For example, less than a quarter of respondents said they believe addressing implications for workers due to automation/technology will be a high priority. Yet we know that labor is undergoing a profound transformation across nearly every sector, from retail to manufacturing. This means current activities on worker rights will need to change dramatically. Similarly, only 16 percent of survey participants said that responding to crises will be a high priority, and only a third said they believe scenario planning will be important.

At BSR, we believe both activities will be essential for sustainability teams. It is time to redefine sustainable business with a new agenda, a new approach, and a new voice. 

As we think about redefining sustainable business for the future, we know that it will include different issues and different partners. In terms of issues, it has become clear that basic economic fairness must be intertwined with sustainability. That’s why BSR is working with business to drive a more inclusive economy—one that enables all individuals and communities to participate in, benefit from, and contribute to the economy.

We were pleased to see that nearly two-thirds of respondents are prioritizing inclusive growth within their companies—a 7 percent increase over last year. Yet that means that one-third of respondents still have not made the connection between sustainable business and inclusive growth. And even among those who have, there is a huge opportunity to invest in areas that will drive the most impact. For example, 78 percent of those companies place low or no priority on locating facilities in areas of high unemployment, and only 14 percent place a high priority on influencing governments for more inclusive public policy. Last week, my colleague Susan Winterberg shared some great examples of how business can lead on driving inclusive growth, from improving retail jobs to impact sourcing.

In terms of different partners, sustainability practitioners have long focused on external collaboration and engagement, with peer companies, NGOs, multilaterals, and others. These partnerships have been critical in creating systemic change. But there is a clear opportunity for companies to integrate sustainability across more internal functions. This is happening in some companies, especially with CEOs and supply chain or procurement teams, but not with some critical internal functions. More than 60 percent of respondents state that customers/consumers, investors, employees, and governments influence their sustainability agenda. Yet those same respondents are not integrating with the key internal partners most likely to influence those key stakeholders. For example, less than 10 percent of respondents prioritize close partnerships with marketing, investor relations, or public affairs. And they prioritize human resources, at 12 percent, only slightly more.

While every organization has its own unique structure, deeper partnership inside companies with these key functions will be essential to achieve greater progress. For example, Intel’s corporate responsibility team has worked for many years with investor relations and corporate governance to drive an integrated approach with investors on ESG. And BSR’s Sustainable Lifestyles Frontier Group—AT&T, eBay, Johnson & Johnson Consumer Inc., McDonald’s, and Walmart—recently published "Big Brands, Big Impact: A Marketer’s Guide to Behavior Change."

As we get ready for BSR’s 25th Anniversary Conference, I look forward to discussing how companies can redefine sustainable business to meet the challenges of the future, and how we can rethink our approach to change inside and outside companies. 

We have finally reached the point where there is no question if business will lead. Now we must answer how. 

Blog | Wednesday July 19, 2017

Inclusive Growth: How Business Leads

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Turn on the news on any given day and the lineup of stories is often the same: an economic report of flat wages and rising financial insecurity combined with tales of social unrest and political instability around the world. Beneath all these seemingly disconnected events lies one common thread—inclusive growth.

The Organization for Economic Cooperation and Development (OECD) defines inclusive growth as “economic growth that creates opportunity for all segments of the population and distributes the dividends of increased prosperity, both in monetary and non-monetary terms, fairly across society.” A lack of inclusive growth has been tied to everything from higher rates of cancer and crime to voting for populist leaders to joining terrorist groups.

Creating more inclusive forms of economic growth has long been seen as the responsibility of governments and civil society. Yet in the last few years, it is increasingly being taken up by the private sector as a central pillar of company sustainability platforms. According to the 2017 BSR/Globe Scan State of Sustainable Business report, which will be published later this month, the number of companies that say they consider inclusive growth a "high priority" for sustainability efforts has increased almost 10 percent since last year.

Companies are taking action on promoting inclusive growth through three main mechanisms: creating good jobs, expanding access to products, and engaging with society.

Creating Good Jobs

A 2016 survey by JUST Capital found that the U.S. public considers providing good jobs as the most critical sustainability issue facing companies today. Some companies are rising to this challenge. IKEA, for instance, made a commitment in 2014 to pay its U.S. retail workforce a living wage. Other areas where companies are beginning to think about good jobs include treating contingent workers more fairly, investing in training and career paths, creating predictable scheduling, increasing benefits coverage, and developing profit-sharing programs.  

Companies are also starting to develop ways to expand their diversity and inclusion efforts to include more groups who face challenges in employment. Member companies of the Global Impact Sourcing Coalition are focusing on ways to improve inclusion in their supply chains through encouraging their suppliers to offer job opportunities to neglected groups, such as long-term unemployed persons, informal sector workers, and “neurodiverse” workers. Some companies are exploring how to bridge geographic divides through “rural sourcing” programs, which hire people from high unemployment rural communities in the United States. There’s even a small group of companies focusing efforts on preventing violent extremism by offering economic opportunities to youth in communities that are targeted by terrorist recruiters.

Expanding Access to Products

Access to affordable and high-quality products in housing, basic infrastructure, healthcare, food, and financial services is a critical component to inclusive growth. Many companies now have access policies and programs for their products. One example is MasterCard’s Center for Inclusive Growth, which uses proprietary technology platforms and big-data capabilities to connect microentrepreneurs, refugees, and other excluded groups to affordable financial services products. The United Nations’ Business Call to Action has secured inclusive business commitments from more than 190 companies to expand access to critical goods and services to the poor in developing countries. Chobani’s founder and CEO Hamdi Ulukaya formed Tent Partnership for Refugees which has organized commitments from companies to improve critical product access to refugees. Doug Rauch, a former president of the grocery store Trader Joe’s, started the The Daily Table, which has organized more than 40 grocery chains and food brands to tackle the challenges of food deserts and malnutrition in U.S. inner cities.

Engaging with Society

Community and government engagement for inclusive growth has long been a focus in the extractives industry, where maintaining a ‘social license to operate’ has been a central focus. Yet the range of industries, geographies and policy issue areas in which business is engaging is expanding.

The last few years have seen a growing tide of "CEO Activism." Earlier this year more than 150 CEOs signed an amicus brief on the U.S. executive order on immigration. This trend could continue in the coming years as businesses weigh in on other critical inclusion policy issues such as U.S. universal access to health care. Other dialogues are also forming at the multilateral level such as the OECD’s Business Leaders for Inclusive Growth and at the “B20,” which is the business platform at the G20. These platforms can provide ways for business’ collective voice to promote fairer and more inclusive policy frameworks for global trade, immigration policy, digitalization and skills, and other global economic challenges.

Inclusive growth is one of the great challenges of our time. Yet through commitment, collaboration, and action, business is showing that it can move from being a central source of the problem to a central driver of the solution. 

Blog | Tuesday July 18, 2017

Impact Sourcing and Inclusive Supply Chains: A Conversation with Bloomberg and Digital Divide Data

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The next wave for employment in outsourcing is not about finding the next location; it’s about thinking more inclusively when tapping local talent. Through Impact Sourcing, companies benefit from offering good job opportunities to disadvantaged people in any country they source services from, including the United States.

During a breakfast event held by BSR's Global Impact Sourcing Coalition (GISC) in New York, we spoke with Erin Lambert, global head of sourcing for Bloomberg’s Global Data Division, and Jeremy Hockenstein, CEO of Digital Divide Data, about their partnership to provide good job opportunities to underemployed populations in the United States. This interview was conducted by Jon Browning, CEO of Strategic Sourcing Advisors.

Jon Browning: Jeremy, tell us about Digital Divide Data’s work, and your partnership with Bloomberg.

Jeremy Hockenstein: A few years ago, one of our board members approached us to see if we could do Impact Sourcing in the United States, given our successful workforce development and employment programs in other countries. This was the beginning of our U.S. program, Liberty Source, which focuses on employment opportunities for the military community, including military veterans and military spouses.

Most of us are aware of the difficulties many veterans have transitioning to civilian employment, but you might be surprised to learn that military spouses are more likely to be unemployed than the average population, with an unemployment rate of 30 percent, which is six times higher than their civilian counterparts (at around 5 percent). They often cannot find work flexible enough to accommodate their spouse’s schedule or deployments. Through Liberty Source, we are able to offer stable work with more flexible work options, and as a result have a loyal, highly educated workforce that can deliver great value to our clients. Our partnership with Bloomberg has really been key in helping build our U.S. business.

Browning: Bloomberg has been working with its suppliers on Impact Sourcing for several years now. Erin, tell us about your experience to date.

Erin Lambert: When Bloomberg partnered with Liberty Source in 2015, our goal was to find a location and a partner to replace the need for contingent workers locally. We found that partner in Liberty Source, and our relationship continues to expand.

Most of the Liberty Source team have a university degree, and several have multiple degrees. I think one success factor is that we don’t just set up the work and forget about it; we visit the facilities in Virginia. And we enjoy visiting! I’ve got trainers who beg me to go there because they enjoy working with the Liberty Source team so much; they treat them as an extension of our internal teams. Impact Sourcing engages both hearts and minds. It is meaningful to Bloomberg employees that we are enabling military spouses to work remotely while their husbands or wives are deployed.

We are also sourcing from a provider in India that operates in remote villages outside of Kolkata, employing undereducated youth who would otherwise have to migrate to the large cities to find jobs. In visiting these job sites, I’ve met employees whose families were previously living below the poverty level. Through Impact Sourcing, the provider has been able to bring up the employees’ family income as much as 400 percent to 500 percent. Once you’ve visited some of these facilities in these countries, you’re even more dedicated to finding commercial ways to help make this work.   

Browning: Digital Divide Data also does work internationally. Jeremy, what are some of the differences between the work you do in the United States versus the work you do in other locations?

Hockenstein: Our operations first started in Laos, and then we moved to Cambodia and Kenya, where we targeted very talented high school graduates who couldn’t afford to go to university. We learned we could tap into a motivated, talented population who, without training and work, would be stuck in a cycle of poverty. Our work-study programs in those countries provides our employees about 35 hours of work a week plus scholarships and loans to go to university. In the United States, most of our employees come to us with higher levels of education, so we don’t need as much pre-employment training as we do internationally.

No matter where we operate, we see these jobs as stepping stones to future opportunities and career growth, maximizing the impact for employees. Even from the beginning, we had high retention rates compared to the average for the business process outsourcing industry, with new employees staying more than four years with us before moving on to bigger roles elsewhere. With higher employee retention, we are able to offer training in more advanced skills and a career progression that does not come with short-term employment. And this strategy has been good for our clients and our business. 

Browning: Erin, have you had any challenges in introducing Impact Sourcing within Bloomberg?

Lambert: Philanthropy and corporate social responsibility are deeply engrained in Bloomberg’s corporate culture, so there actually haven’t been a lot of challenges internally.

The only concerns that have been raised are whether our Impact Sourcing providers could continue to grow as Bloomberg grows. We have partnered with Liberty Source for over a year. They’ve grown a lot with us already, and we have a growth strategy in place that I’m pretty confident we will achieve together.

Browning: Erin, as a member of the GISC, what opportunities do you see through a collaborative approach to advancing Impact Sourcing?

Lambert: The Coalition has grown even since Bloomberg joined a couple months ago. For us, the value in participating in the GISC will come when we are able to evaluate the true social impacts of inclusive employment. Until then, it’s important for companies like Bloomberg to step up and talk about our work, and encourage other companies to follow. There’s an opportunity for others to learn from our experience, to hear that, yes, we are working on Impact Sourcing, and when issues have come up, here’s how we worked through it.

Blog | Wednesday July 12, 2017

Insights from Telia Company’s Human Rights Impact Assessments

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This week, Telia Company published the human rights impact assessments (HRIAs) undertaken by BSR of the company’s subsidiaries in Sweden and Lithuania. This follows the company’s earlier publication (in summary form) of similar HRIAs undertaken by BSR of the company’s subsidiaries in Azerbaijan, Georgia, Kazakhstan, Moldova, Tajikistan, and Uzbekistan.

Taken together, these publications by Telia Company represent an impressive commitment to transparency on human rights impacts and how they are addressed. This level of transparency remains rare in the business and human rights field, and we hope these steps by Telia Company are frequently cited as a leading example for other companies to follow.

These HRIAs represent a substantial body of work. Along the way, BSR and Telia Company gained many new insights into how to apply the UN Guiding Principles on Business and Human Rights, and we want to share four of them here:

• Stakeholder and rightsholder engagement is essential. To develop the eight HRIAs, BSR and Telia Company met with around 100 stakeholders and rightsholders, including human rights defenders, advocates, policymakers, diplomats, and regulators. Some were experts in telecoms, while others were not; some focused on the broad human rights agenda, while others specialized in specific areas, such as privacy, LGBTIQ+ rights, or gender equality. While companies can be hesitant to engage externally, with the right preparation, companies can gain valuable insights from these conversations and forge new relationships that are essential for the successful implementation of HRIA recommendations.
• Transparency by companies on human rights issues has impact. Over recent years, a number of internet and telecoms companies, including Telia Company, have become much more transparent in their approach to freedom of expression and privacy, especially when it comes to how they respond to government demands that risk violating the human rights of their users. These reports can be long and detailed, so it is tempting to assume they sit unread on a digital shelf. They are not—indeed, quite the opposite. In these Telia Company HRIAs, and in HRIAs BSR has undertaken with other internet and telecoms companies, it has been striking to learn how local human rights defenders and advocates have put them to use—for instance to inform their policy positions.
• An industry lens is required. The UN Guiding Principles on Business and Human Rights are written for all companies in all industries, so applying them to a specific telecoms company raises new questions that require industry knowledge. What is the responsibility of a telecoms company when compliance with local laws, regulations, and licenses can result in human rights violations? How can telecoms companies reconcile the huge freedom of expression benefits of their services with their accompanying risks? What unintended consequences does a telecoms regulatory change have in a country with strong rule of law (such as Sweden) when that same change is replicated in countries without the same legal protections? How will disruptive technologies, such as artificial intelligence and the internet of things, alter human rights risks? Industry organizations such as the Global Network Initiative can help explore what these questions mean for telecoms companies.
• The link between ethics and human rights is strong. While freedom from corruption is not a human right, it was clear throughout our assessments in all eight countries that there are strong links between ethics, corruption, and human rights. An ethics violation—such as the selection of an unqualified supplier with poor health and safety practices—can result in significant human rights consequences. The victims of both ethics and human rights violations are often the most vulnerable populations. Upon completing the HRIAs, we became even more convinced of the need for holistic approaches to manage ethics, corruption, and human rights. We even believe a case could be made to acknowledge freedom from corruption as a human right.

We hope Telia Company’s publication of these HRIAs serves three key functions. First, we hope it enhances Telia Company’s ambition to integrate human rights into business decision-making. Second, we hope it informs further dialogue on human rights in the eight markets covered. And third, we hope it provides insights for the broader business and human rights community on how to undertake HRIAs.

Indeed, we at BSR are also taking a risk by being transparent about our own work. We are committed to being at the leading edge of business and human rights methodology, and we believe our approach can be improved by transparency and constructive criticism. Both Telia Company and BSR look forward to feedback and dialogue. 

View the full case study of our human rights impact assessments for Telia Company.

Case Studies | Wednesday July 12, 2017

Telia Company: Human Rights Impact Assessments

Preview

BSR helped the telecommunications firm Telia Company integrate human rights into business decision-making in two ways: Human Rights Impact Assessments (HRIAs) in six Eurasian markets where the company is exiting and HRIAs in two European markets where the company continues to invest.

The Challenge

In September 2015, Telia Company announced its intention to divest from Region Eurasia, including through the sale of its subsidiaries in Azerbaijan, Georgia, Kazakhstan, Moldova, Tajikistan, and Uzbekistan. For this reason, Telia Company sought to create a “responsible divestment plan” that would take into consideration the human rights impacts, risks, and opportunities arising from the divestment, including:

• How to minimize human rights risks from the announced sale.
• What to look for in the due diligence of potential buyers, such as their human rights record and commitments.
• What activities to undertake during the sales period, such as using the final HRIA reports to build the capacity of the buyer to manage its new assets with respect for human rights.

At the same time, Telia Company announced its intention to invest in a new generation of products and services in its European markets, such as the internet of things, entertainment, and security. Telia Company sought to understand the actual and potential human rights impacts in these markets, and how to address them in its policies, strategies, and plans.

Our Strategy

For each of the eight markets (the six Region Eurasia markets, plus Sweden and Lithuania of Telia Company’s European markets) BSR undertook HRIAs using methodologies based on the UN Guiding Principles on Business and Human Rights. For each HRIA, BSR completed four phases:

• Immersion, where we built knowledge of the company and the local context through document review, company interviews, and meetings with subject matter experts.
• Mapping, where we visited the country to identify actual and potential human rights impacts with local stakeholders and rightsholders.
• Prioritization, where we reached conclusions on where Telia Company and its subsidiaries should focus their human rights efforts.
• Final report, where we made recommendations for a company human rights action plan over the short, medium, and long term, and reached conclusions about the use of company leverage.

For the six Region Eurasia markets BSR made recommendations to Telia Company for how to integrate human rights into the sales process through a responsible divestment plan, and to each subsidiary and its future owners for how to manage and mitigate human rights impacts during the ongoing management of the companies.

For the two European markets BSR made recommendations to Telia Company for how to integrate human rights into its companywide strategy, governance, and management, and for the local subsidiary we made recommendations for how to manage human rights impacts in that market.

Our Impact

The impact of this work will arise through the implementation of BSR’s recommendations, which covered a diverse range of human rights issues, such as privacy, freedom of expression, non-discrimination, security, land rights, child rights, and labor rights.

In Region Eurasia, Telia Company has implemented BSR’s recommendations by undertaking human rights due diligence of potential buyers and sharing the HRIAs with them. Both Telia Company and the local subsidiaries have maintained human rights action plans and tracked progress over time.

Similarly, in Sweden and Lithuania, Telia Company is creating and maintaining action plans to implement recommendations and track progress. The implementation of these human rights action plans is overseen by Telia Company’s Governance, Risk, Ethics, and Compliance Committee.

In addition, Telia Company has published the Sweden and Lithuania HRIAs, and summary versions of the Region Eurasia HRIAs.

Lessons Learned

BSR and Telia Company gained many new insights into how to apply the UN Guiding Principles on Business and Human Rights in practice.

• Stakeholder and rightsholder engagement is essential. Across the eight HRIAs BSR and Telia Company met with around 100 stakeholders and rightsholders from a wide range of backgrounds. We met with human rights defenders, advocates, policymakers, diplomats, and regulators. Valuable insights were gained, and new relationships were forged that will be essential for the successful implementation of HRIA recommendations.
• Transparency by companies on human rights issues has impact. Over recent years a number of internet and telecoms companies, including Telia Company, have become much more transparent in their approach to freedom of expression and privacy. While these reports can be long and detailed, it has been striking to learn how many insights local human rights defenders and advocates gain from the reports, and how they are put to use.
• An industry lens is required. The UN Guiding Principles on Business and Human Rights are written for all companies in all industries, so applying them in a telecoms industry context raises all sorts of challenging questions—for example, how disruptive technologies such as the internet of things alter human rights risks, or how companies navigate situations where compliance with local laws, regulations, and licenses can result in human rights violations.
• The link between ethics and human rights is strong. While freedom from corruption is not a human right, it was clear throughout the HRIAs that there are strong links between ethics, corruption, and human rights. An ethics violation—such as the selection of an unqualified supplier with poor health and safety practices—can result in significant human rights consequences, while the victims of both ethics and human rights violations are often the most vulnerable populations.

Most of all, these HRIAs illustrated the importance of a proactive approach to integrating human rights into business decision making. Without the intelligence gathering required by the HRIAs, Telia Company’s senior decision-makers would have fewer decision-useful insights available on important issues of material significance to the company.

Blog | Tuesday July 11, 2017

How Business Can Support the Global Movement for Family Planning

Preview

Maternal deaths are the second-biggest killer of women of reproductive age globally: Every two minutes a woman dies from complications in pregnancy and childbirth, with 99 percent of these women living in developing countries. Research by the Guttmacher Institute shows that around 40 percent of the 190 million pregnancies in the developing world in 2012 were unintended, and that about half of them ended in abortion. Unsafe abortions are recognized as one of the main drivers behind pregnancy-related complications and the leading cause of death among women aged between 15 and 19 globally.

The most effective way to avoid unintended pregnancy is through correct and consistent use of contraceptives. Yet an estimated 225 million women in developing countries who would like to delay or prevent pregnancy do not have access to any method of contraception.

Today, the international community is coming together for the Family Planning Summit 2017. It has been exactly five years since the 2012 London Summit on Family Planning adopted the ambitious goal of enabling 120 million more women and girls to use contraceptives by 2020. So far the global partnership for Family Planning (FP2020) is making progress, and an estimated 34 million more women are now using modern contraceptives. This indicates a clear acceleration compared to historical trends, but also suggests that we are not making progress fast enough to reach the FP2020 goal.

Now we need to pick up the pace. Achieving the FP2020 goal is a critical milestone for ensuring universal access to sexual and reproductive health and rights by 2030, as laid out in the Sustainable Development Goals. The international family planning community is calling on the private sector to join the global movement to enable women and girls to use contraceptives.

What does women’s access to family planning have to do with your business?

Access to safe, voluntary family planning is a human right. Accessing family planning services is essential for women and girls to be able to stay in school, join the workforce, and—crucially—remain active in the formal economy. Women play a key role in the global workforce, and their participation in the formal economy is critical for economic growth and for companies’ ability to recruit and retain workers. A recently published report by the Asia-Pacific Economic Cooperation recognizes health issues, including not having access to family planning, as critical barriers to women’s economic participation.

Promoting women’s access to family planning does therefore make good business sense, and business can play an important role in supporting more women and girls with access to family planning. Global supply chains—especially those with a high concentration of women workers in factories—present a major opportunity to connect women to comprehensive family planning services. BSR’s HERproject has implemented HERhealth programs over the past 10 years, improving health outcomes for more than 600,000 low-income women workers. Our impact data show increased awareness of the benefits of using family planning as well as an actual increase in the use of contraceptives among women workers. However, our experience tells us that we need to increase investments in workplace health systems to ensure full access to family planning for women workers.

Therefore, we are presenting a new approach for investing in workplace health systems to deliver for women, their families, and communities. Together with The Evidence Project/Raise Health Initiative, we have developed a set of resources to build the capacity of workplace managers and clinic staff to manage workplace health services and to implement health awareness-raising activities.

Investing in workplace health systems means that factories and farms can:

• Improve women workers’ access to critical health services, both in the workplace and outside the workplace through stronger referral systems.
• Increase the capacity of top managers and clinic staff to manage workplace health, and to run the health clinic as a strategic business resource.
• Sustain impact after the formal completion of HERhealth by creating an enabling environment for workplace health and local ownership.

Partnering with factories and farms to help them invest in workplace health systems is an essential component of HERproject’s efforts to ensure women workers have access to comprehensive family planning, and to support their right to decide whether, when, and how many children they want to have. Investing in workplace health systems will not only promote women’s health outcomes and right to health, but also will enable women and girls to participate in the formal economy more fully.

Women’s health—including sexual and reproductive health and rights—remains central to HERproject after 10 years. We are calling on companies to accelerate efforts to ensure access to family planning for women around the world. Business has a unique opportunity to invest in women working in global supply chains, and by actively partnering with local suppliers to improve workplace health systems, you can join a powerful movement to ensure women have control over their lives—for everyone’s benefit.