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In This Issue
Editor's Note
Managing Transparency on Climate Impacts in the Supply Chain
Despite growing demands for companies to be more forthcoming about their climate impacts, three main challenges can inhibit transparency: divergent information requirements from various interest groups, demand for details about supply chain impacts, and the sheer expense of reporting on climate issues.
This week, BSR's Ryan Schuchard outlines how to overcome these hurdles by monitoring your company’s impacts, translating that data into actionable information, and promoting governance standards that catalyze progress.
We also hear from the two sides on the recent court decision on corporate liability under the U.S. Alien Tort Statute (ATS): What kind of impact will this decision have on the applicability of the ATS in cases involving companies?
Finally, we review a United Nations Development Programme report launched at the recent Millennium Development Goals (MDG) summit that examines business models that include the poor in value chains as producers, employees, and consumers.
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In Depth
Three Tools for Managing Supply Chain Transparency on Climate
By Ryan Schuchard, Manager, Climate and Energy, BSR
Companies are facing growing pressure to increase their transparency on climate-related impacts, but challenges are significant, including the divergent information requirements of various interest groups, demand for details about supply chain impacts, and the sheer expense of reporting on climate issues. Our practical, three-part approach to transparency will help your company overcome these hurdles.
Read more →
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Toolbox
Building Inclusive Business Models to Support the MDGs
By Elissa Goldenberg, Associate, Advisory Services, BSR
During the recent Millennium Development Goals summit in New York, the United Nations Development Programme (UNDP) released a new report highlighting the roles of business and other key actors—including policymakers, researchers, and advocates—in developing business models that include the poor in value chains as producers, employees, and consumers.
The report also recognizes achievements to date and best practices in 40 case studies and descriptions of 140 supporting institutions. For example, IKEA—in an effort to achieve universal primary education—established a code of conduct that requires all suppliers to recognize the UN Convention on the Rights of the Child and also developed a sturdy SUNNAN lamp that could withstand difficult living conditions to give children without electricity the ability to read and write after sunset.
The report also outlines and provides examples of how the UNDP can support business by acting as a policy advisor, researcher, advocate, funder, technical advisor, and capacity developer.
On the Record
New Uncertainty About Corporate Liability for Human Rights
By Faris Natour, Director, Human Rights, BSR
In a case involving allegations of complicity in the executions of environmental protesters against a Shell subsidiary in Nigeria, a U.S. appeals court ruled that the U.S. Alien Tort Statute (ATS)—which allows foreigners to seek damages in the United States for human rights violations committed abroad—should not apply to companies. Dozens of cases have been filed against corporations under the law, and this ruling contradicts an earlier decision by another appeals court that had accepted the possibility of corporate liability. Given this new uncertainty, it’s possible that this case will go to the U.S. Supreme Court.
While all judges in the Shell case agreed that the lawsuit should be dismissed, the majority and dissenting opinions clearly outline the two opposing views on corporate liability under the ATS:
"No corporation has ever been subject to any form of liability under the customary international law of human rights, and thus the [ATS] … does not confer jurisdiction over suits against corporations."
—Second Circuit Judge José Cabranes (Wall Street Journal, September 18, 2010)
"According to the rule my colleagues have created, one who earns profits by commercial exploitation of abuse of fundamental human rights can successfully shield those profits from victims’ claims for compensation simply by taking the precaution of conducting the heinous operation in the corporate form."
—Second Circuit Judge Pierre Leval (Businessweek, September 17, 2010)
Whether or not the U.S. Supreme Court takes on the question of corporate liability under the ATS, companies can mitigate legal risk by adopting strong human rights policies, conducting human rights impact assessments, and providing effective grievance mechanisms where human rights may be impacted.
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