Search Results

Blog | Tuesday January 28, 2025

The EU Omnibus: What’s at Stake for Business, People, and the Planet

Preview

Last November, the EU Commission President, Ursula von der Leyen, announced plans to create an Omnibus Simplification Package that would streamline reporting requirements in three EU Green Deal laws: the EU Taxonomy, the Corporate Sustainability Reporting Directive (CSRD), and the Corporate Sustainability Due Diligence Directive (CSDDD). These rules have been designed to complement each other:

• Adopted since 2020, the EU Taxonomy establishes a classification system for environmentally sustainable business activities, including screening criteria for their contribution to environmental objectives and minimum social safeguards that must be met.
• Adopted from January 2023, companies must report on their material impacts, risks, and opportunities in line with the European Sustainability Reporting Standards (ESRS), with the largest in-scope companies reporting in 2025. Companies have an obligation to report their Taxonomy-aligned activities in their management report.
• The CSDDD, adopted in 2024, requires companies to conduct human rights and environmental due diligence, adopt Climate Transition Plans, and report on their adverse impacts on people and the environment and how they are managed. CSDDD does not impose additional reporting requirements—companies may report on their adverse impacts under CSDDD in their CSRD management reports without having to issue a separate CSDDD report.

EU discussions on the Omnibus are ongoing, with the draft proposal expected in late February 2025.

A leaked document indicates that on January 29, the EU will release details on the Omnibus proposal as part of its “competitiveness compass” report. Key areas for attention include focusing on the “most harmful activities”, ensuring alignment of data requirements and investor needs, and “proportionate” timelines. Once the Commission approves the language, it will be subject to debate within the European Parliament and Council.

The Omnibus announcement follows “big narrative” calls from business to reduce red tape and support competitiveness, as well as genuine questions and concerns from companies seeking to comply, such as the need for more guidance on certain CSDDD provisions. Opponents of the European Green Deal have mounted pressure campaigns to weaken the rules, including by reducing obligations and the scope of companies covered. 

While effective interoperability and avoiding overlapping reporting requirements is beneficial, the possibility of reopening the legal text at this late stage has led to widespread concern among business leaders and civil society. For instance, re-opening negotiations could weaken key elements of alignment with the OECD Guidelines on Multinational Enterprises and the UN Guiding Principles on Business and Human Rights (UNGPs), which are essential for preserving the balance between feasibility and achieving sustainability impacts.

This would undermine significant business support for CSDDD and CSRD and may obstruct and negate progress made by business, including investments of time and money to build out their compliance infrastructure.

In January 2025, Nestle, Mars, Unilever, Primark, Ferrero, and others sent a letter to the European Commission, raising concerns that the forthcoming Omnibus package might dilute the new regulations, particularly the CSDDD, and jeopardize business certainty and investment. Earlier, over 400 French companies, including L’Oreal, Carrefour, and Amundi, argued that complaints that CSRD, CSDDD, and the Taxonomy hurt European competitiveness are overblown and are made by parties that haven’t closely examined the text.

Abruptly transforming “simplification” into “deregulation” risks creating unintended consequences for business, not to mention for people and the planet. Instead of changing what has yet to take place, greater value lies in assessing achievements and challenges after implementing the current rules in their entirety and, if necessary, making reforms at a later stage. To support companies, the EU Commission should adopt the necessary delegated acts and guidelines to provide greater clarity and enhance the practicality of existing measures while considering the needs and questions of business.

As the world waits to see the Omnibus proposal, companies are encouraged to proceed based on the existing legal text, including by aligning their compliance efforts with international due diligence and reporting standards and pursuing their ambitions for business transformation.

Reach out to us for further information or to connect with a member of our team.

Blog | Thursday January 23, 2025

Corporate Sustainability Governance Fitness Test: Three Actions for Leaders

Preview

As we enter 2025, navigating business leadership on key sustainability issues has never been more challenging. Political polarization, the advent of mandatory sustainability reporting regulations, and an environmental, social, and governance (ESG) backlash have created a paradox: companies are expected to disclose their sustainability programs yet may be punished for doing so. Wars and a burgeoning energy crisis are disrupting supply chains and straining long-held assumptions about material availability and business models. At the same time, the emergence of AI-enabled misinformation campaigns is causing companies to question what they know and how they can credibly communicate with stakeholders.

Business leaders are currently grappling with how to govern in such a chaotic, disruptive environment. In the first blog in our three part series, The Silent G: Six Questions Every Leadership Team Should Ask about Sustainability Governance, BSR Managing Director Christine Diamente suggested the answer lay in getting the foundations in place: organizational structure, stakeholder engagement, and resilience. Here we take a deeper dive into these three topics.

Getting the Organizational Charts right: Governance structures, roles, and responsibilities

It’s tempting to mistake a governance flow chart for a map: follow the boxes and lines, and it will take you where you want to go. But flow charts defining authority and decision-making (usually flowing down), and accountability and information (usually flowing up), are just the beginning. Does the chart reflect reality? Does a current materiality assessment inform issue management? Do issue owners possess the requisite capacity, skill, time, and resources? Does an oversight body validate issue assessments, vet assignments, review targets, and KPIs, and ensure incentives aligned with corporate strategy? Is there a flexible mechanism to spot emerging issues and institutionalize or sunset old ones? 

BSR supports its members to stress-test and upgrade their sustainability governance systems by:

• Adopting a sustainability issue management model across teams. A dedicated sustainability team led by a Chief Sustainability Officer (CSO) (or equivalent) works across business functions to translate material issues and corresponding data into operational goals, targets, and KPIs. They should ensure a balance between embedding material issues across the business while looking ahead to emerging issues. Issue ownership rests with the function best equipped to manage them in concert with other organizational goals—thus Procurement has KPIs for supply chain sustainability; Product Development is charged with incorporating more sustainable materials into product design; etc. An executive-led steering committee oversees this process and is accountable to the C-Suite, which in turn reports to the Board.
• Leveraging materiality assessments. Materiality, when well executed, validates known issues and illuminates previously obscured or emerging issues. New issues trigger issue-specific assessments, which yield the information and insights required to confirm impacts, identify affected stakeholders and design corresponding strategy, data collection and controls. These steps constitute an early warning system—a yellow flag to prevent a red or to transform to a green—allowing companies to refresh their policies, practices, and training before an issue becomes a crisis. We’ve seen this process successfully deployed with human rights, living wage, and climate resilience, amongst others. Materiality assessments can also be a useful catalyst to refresh strategy, reporting, and communications.
  •  For more insights, see So You've Completed a Materiality Assessment: Now What?
• Doubling down on integration: A materiality assessment can also reveal that sustainability governance systems and policies are essentially dormant, without the organizational focus, skillsets, or resourcing needed to animate them. The task then becomes operationalizing governance through integration.
  • BSR’s recent report, The Impact of Mandatory Sustainability Reporting on Corporate Functions, is an overview of how diverse functions across the enterprise are evolving in response to new requirements. For example, mandatory sustainability disclosure laws have prompted the creation of an ESG Controller responsible for ESG data measurement and reporting. This position leverages financial acumen to connect ESG to financial and operational data; prepares risk assessments, forecasts, and reports; and ensures that control processes appropriately address and deliver on goals.
  • Increasingly, companies are also creating dedicated Sustainability training functions or a sustainability academy to ensure that the entire organization has a program to upskill continuously on current and emerging sustainability trends relevant to the business. This can include all-employee training sessions to dedicated, bespoke programs for specific expert functions, C-suite, and the board of directors.

Cracking the Code on Stakeholder Engagement

In a climate of increased stakeholder expectations, companies must identify priority stakeholders and understand their perspectives and concerns. Of particular priority are rights-holders: those whose human rights are or could be affected by the company’s operations or value chain, and who often lack a direct, trusted line of communication with the company.

BSR employs a 5-step process to help companies build stakeholder engagement strategies for long-term business value.

There is a learning opportunity at each step in this process. Co-creating Climate Justice Interventions Between Business and Communities lays out 10 principles for co-creating stakeholder engagements for long-term value creation, including listening to learn, contending with systemic historic and contemporary injustices, and moving at the speed of trust. These principles can be applied with a wide range of stakeholders and rights-holder engagements to build the foundations of solid, long-lasting collaborations.

Building Resilience, from the Value Chain Forward

In many ways, business resilience is the holy grail: a well-designed sustainability strategy delivers a more robust, flexible, and resilient business. How does one start? It won’t surprise you to learn that any sustainability-led resilience strategy is grounded in a few material issues. BSR helps companies select priority issues; explore their evolution through futures exercises; map related impacts; and use the insights gained to build and test strategies. To broaden the aperture of their thinking, many companies are turning to External Advisory Councils to bring authoritative yet often less visible stakeholder interests to the fore, allowing executives to stress-test their strategies before they are adopted and deployed and strengthen their approach, especially at value chain level.

In our experience, leaders who ask the right sustainability governance questions—and have the vision and tenacity to find the right answers for their company and context—have the most resilient governance structures. Check out BSR’s corporate governance activities or contact the Sustainability Management team to put your system to the test.

People

Chris Sheehy

Preview

Chris works with BSR member companies at the intersection of technology and human rights, including by helping companies integrate human rights principles and practices in their responses to emerging regulations for digital services. ​

Chris spent eight years at the Global Network Initiative, working to protect freedom of expression and privacy in the ICT sector. Supporting GNI’s member network of civil society organizations, technology and telecommunications companies, academics, and investors, he built consensus on policy positions and advocacy tools to engage with governments and international organizations on rights-respecting laws and regulations. Chris also led shared learning among GNI's expert membership on emerging digital rights issues, and he helped facilitate a board review of independent assessments of member companies’ implementation of the GNI Principles.​

Prior to his career in business and human rights, Chris worked in research and program management at a think tank focused on Middle East issues and an NGO focused on post-conflict recovery. He holds a BA in International Affairs from James Madison University.

Insights+ | Tuesday January 21, 2025

Sustainability Goal Setting: A New Chapter

Preview

Blog | Thursday January 16, 2025

Six Actions for Business in 2025 Post-Roe America

Preview

Since the fall of Roe v. Wade in June 2022, businesses ranging from publicly traded to owner-led are trying to bridge the gap in abortion access as part of workplace health, safety, and readiness in the years that followed. Simply stated, abortion access is part of gender equality, implicating over half of the workforce at various points in their career trajectories, as well as the economy on a macro level.

Furthermore, efforts to criminalize and ban abortion access harm more than just workers’ access to healthcare. Heading into 2025, threats to data privacy, commerce, travel, and regulatory structures add cost, chaos, and uncertainty across business operations.

Throughout 2024, the public’s support for abortion access increased across party lines, and demonstrable advances were made in the states. Voters in seven states expanded and protected abortion access for millions of people.

The stakes for business continue to grow as they wrestle with the workforce impact as tragic stories break through—from mothers, daughters, sisters, and wives—who have faced needless barriers to accessing care resulting in fatal or severe consequences from delays or ‘turnaways’ from emergency rooms. These women are executives, board members, frontline workers, and community leaders. 

While the new U.S. president said he plans to “leave the issue to the states,” it is more likely that the administration will spur an onslaught of additional barriers to accessing abortion, along with other forms of reproductive healthcare, ranging from contraception and miscarriage management to IVF.

Notably, there may be an effort to seek enforcement of the Comstock Act, which could be weaponized and interpreted in a way to serve as a legal basis for a nationwide ban on medication abortion. Additionally, threats to employee benefits and how they are administered may be on the horizon. Another concerning prospect is that federal contracting could be weaponized to disincentivize companies from protecting their workforce. 

At the state level, attorneys general and legislators will continue to have an important role in determining how abortion laws are protected or enforced. Access to abortion, fertility care, and maternal health care increased in 25 states and the District of Columbia. Simultaneously, there were continued attacks on reproductive health care, with a focus on creating barriers to fertility care, maternal health care, and abortion access, perhaps muted somewhat because these measures are not popular to amplify in an election year.

As state policies diverge, businesses will continue to play an increasingly important role as a firewall for their workforce. Restrictive policies continue to sow confusion and fear as healthcare providers navigate opaque laws creating avoidable medical emergencies and compounding existing issues from financial to travel burdens as distances to access care increase.

Physicians, threatened with criminal and financial penalties, continue to leave states or residency where abortion is banned, exacerbating healthcare deserts.

In an increasingly fraught landscape with new and quickly changing restrictions on a state-by-state basis, companies can expect to see increased litigation and costs. Companies should be prepared for the following actions from both state and federal actors, and their stakeholders: 

• Increased scrutiny and enforcement from attorneys general. In 2023, Republican state attorneys general threatened a civil suit against pharmacies dispensing mifepristone (one of two drugs commonly used in medication abortion). Recently, Texas sued a New York doctor for prescribing to a patient near Dallas, launching one of the first challenges in the U.S. to shield laws. Expect more actions from Republican attorneys general moving forward, with a sustained emphasis on medication abortion and the Comstock Act.
• State laws imposing financial penalties. Expect state legislators in abortion-restrictive states to continue to introduce bills seeking to penalize companies for policies that arguably conflict with state law. As an example, during the last legislative session, lawmakers in Texas introduced bills that would remove tax incentives for companies that provided abortion-related funding or would prevent local governments from doing business with such companies (even if the benefits were provided only outside the State of Texas). 
• Pressure from a company’s stakeholders, such as shareholder proposals regarding abortion, and employee demands. Companies should be prepared for increased scrutiny not only from state actors, but also from their stakeholders who will be interested in the company’s response to further legal changes moving forward. 
• U-turns on regulation. While much of health policy will be shaped by executive and legislative action under the incoming administration, a variety of pending lawsuits also may be affected. The outcome of pending litigation and potential regulatory changes under the new administration will determine whether employers must provide accommodations to employees after an abortion as part of the Pregnant Workers Fairness Act. 

In response, companies can take the following actions to prepare, anticipate, and protect their workforce, as well as communities where they live and work. 

1. Review employee health plans to understand and evaluate how they provide reproductive healthcare; what employees or groups of employees are entitled to this care; and how this care is provided in various states. Audit the availability of care to ensure coverage under all circumstances within networks through medical plans where the company operates, including remote workers. Companies are encouraged to: 

• Establish or expand overarching programs that support employees in emergencies and/or with travel costs associated with seeking healthcare in addition to paid sick days. 
• Close the gap on abortion access for workers that may not be eligible for regular benefits, such as hourly workers and contractors. 
• Communicate benefits and existing programs available to workers to help them access time-sensitive and confidential healthcare rather than making it hard to locate. 
• Take the Reproductive and Maternal Health (RMH) Compass benchmark, a new comprehensive performance standard for employers to measure their reproductive and maternal health benefit offerings.
• Have policies that support workers in the face of emergencies, such as a pregnant employee facing a healthcare crisis while traveling for work in a banned state. 

2. Make reproductive health access part of event and office site selection: Reproductive health influences people's choices about where they want to live and work. In the past two years, reproductive healthcare was included as a factor in determining CNBC’s Top States for Business. The National Bureau of Economic Research recently tracked that since the second quarter of 2023, the 13 states with total abortion bans are collectively losing 36,000 residents per quarter. Additionally, for the third consecutive year, a BSR/Morning Consult poll indicates by a 2 to 1 margin, workers want to be in states where abortion is legal and accessible. 

Companies may not publicize that reproductive health access is a decision-maker in site selection, but it is a new variable. Business leaders can: 

• Understand and manage the growing safety risks related to travel for your workforce. Review existing or consider establishing travel policies that acknowledge the risks of hosting events in places where abortion is illegal or inaccessible.
• Ask questions relevant to event site selection as well as long term footprint. For events, consider using contract language that allows cancellation without penalty if a destination state enacts legislation that would repeal existing legal protections or bans access to healthcare.  
• Consider state restrictions on reproductive health when selecting office locations, data centers or related assets that might give a state jurisdiction over the user data. 

3. Conduct a human rights due diligence assessment to identify risks to reproductive health privacy that may be associated with the development or use of new or existing platforms, devices, products or product features. The collection of user data by companies in all industries, and tracking of user’s online activity, movement and information creates significant risks to seekers and providers of reproductive healthcare services. This leads to operational and reputational risk for employers, brands and companies. (For example, the greater the distance an individual must travel to access abortion, the greater the digital trail created). Within recent years, an increase in litigation shows the direct risks of breached data privacy in relation to those seeking abortion care as cases surrounding geolocation data sharing, social media messaging, and digital information concerns escalate. Companies can: 

• Apply best practices for privacy principles such as data minimization, purpose limitations, purpose-based data retention, and user transparency and control.
• Deploy end-to-end encryption on private messaging services.
• Set default privacy settings to the highest level of privacy protection and ensure privacy protections are based on an opt-out model, not an opt-in model.

Shareholders are calling on companies to safeguard sensitive customer and user data that may be used to prosecute abortion cases, and regulators are requiring global companies operating in the EU to assess, address, and report on the negative human rights impacts connected with activities. 

4. Implement abortion-specific subpoena-response plans that are compliant with federal and state data privacy laws but scrutinize what is requested as well as informing consumers or clients of requests. As part of these plans, companies should ensure that their internal legal teams are involved and directly engaged in compliance efforts. Prosecutors may work in collaboration with law enforcement to gather financial information such as purchasing history or transaction data to prosecute individuals and healthcare providers. While the tech industry is often the most scrutinized, the finance, travel and retail pharmacy industries are also implicated. BSR published a roadmap, Navigating the Rollbacks in Protection of Reproductive and LGBTQI+ Rights in the United States: A Guide for Financial Institutions to equip consumer and institutional client-serving financial firms to assess and address the threats caused by criminalization.

5. Educate officeholders and decision-makers about the cost, chaos and collateral damage of abortion bans on the private sector. Business leaders should share with officeholders and decision-makers how abortion access is a material business concern. The collateral harm of restrictions extends well beyond abortion access – implicating talent pipelines, state reputation/rankings and creates unnecessary burden for business in an already fraught environment. Collective diplomacy by the business community can be a powerful way to educate officeholders on the cost and chaos caused by bans and restrictions. In particular, small businesses are among the most trusted institutions across the political spectrum. Companies can: 

• Prepare executives, including board members, to understand the topic and the vast implications. Executive awareness, understanding and support for wrestling with the complexities within the company is a prerequisite.
• Privately work in coalition through business associations at the local, state and federal level to find ways to raise the issue as a geographic and/or industry concern.
• Join amicus briefs to signal an understanding of the greater stakes. A historic number of companies have signed onto litigation supporting reproductive healthcare since 2022. 
  • In the case of Idaho v. United States where abortion care is considered a stabilizing medical treatment under the federal Emergency Medical Treatment and Labor Act (EMTALA), businesses argued that Idaho’s reproductive health care restrictions were negatively impacting the economy and business. Previously, a business amicus was also submitted in the Zurawski v. Texas case as well as a multi-industry response on the Alliance for Hippocratic Medicine v. FDA case. 
• Get updates from Don’t Ban Equality, a platform that enables companies to work with peers across the private sector on the workforce impact and economic costs of abortion restrictions. Companies can sign onto the platform and/or select to receive updates including monthly newsletters and quarterly calls. 

6. Reconsider political giving from this perspective. In a highly divisive political environment, the unmet need for companies to find ways to better align political influence with operational and workforce policies is harder and more necessary than ever. Abortion access is widely supported and also now legislated in every state. Steps companies can take include:

• Consider how well the company’s political contributions align with stated values, mission and policy priorities. Review and update criteria for making political contributions and test what giving preference to candidates and organizations that support abortion access, IVF, miscarriage care and reproductive health, overall, could look like.
• If reallocation is not possible, commit to educating recipients of political donations on how their positions on social issues harm the workforce, have demonstrable collateral damage and are not conducive to a robust business environment.

BSR’s Center for Business and Social Justice works with experts in reproductive health to provide actionable guidance to business. BSR members can contact the Center with inquiries.

Blog | Wednesday January 15, 2025

A Year of Uncertainty: Ten Big Questions Facing Sustainable Business Leaders in 2025

Preview

As we begin 2025, and the second half of the 2020s, their promise of being a “decisive” decade for achieving crucial goals has—so far—fallen short.

Instead, we find ourselves facing more questions than answers. How we respond to them, and their second and third-order effects, may not be decisive, but they will be defining.

The momentum for sustainable business that was so evident in 2020 has stalled. There are many reasons for this: economic volatility, technological change, political instability and backlash, prioritization of regulatory compliance over action, and a fractured information ecosystem prone to mis- and disinformation.

Underlying all this, many in society have lost faith that they will benefit from a more sustainable economy. They not only see little in the way of economic benefit, but also view many of the messengers of a just and sustainable world as talking down to them and ignoring their realities. As the Chief Sustainability Officer (CSO) of one of our member companies put it to us in December: “When middle-class families are struggling to keep up, our ideas sound like empty slogans.” We have to overcome this cynicism amongst many outside the sustainable business community and take renewed action that achieves tangible results.

Here are ten questions that are likely to define progress in 2025:

How will businesses respond to ongoing attacks on sustainable business?

Many businesses have trimmed their sails in the face of online activists and political figures challenging the very legitimacy of sustainable business. There are important debates over how to take action on climate and diversity. But the current effort to delegitimize the very concept of sustainable business, despite considerable evidence that it is essential to resilient and innovative business, and highly valuable for social and economic progress, is undermining important progress. Careful communication is one thing; failing to respond to misplaced and inaccurate attacks is another. With diversity and climate efforts under particular attack, and misrepresentations and misinformation about sustainability generally running rampant, when will business leaders decide that it is time to call out the inaccurate and damaging arguments that are based more on ideology than objective reality? 

Do businesses have a “red line” when it comes to rule of law?

2024 was a record-breaking year of elections. This year, businesses face an environment in which the rule of law is being questioned and undermined by elected officials, other political influencers, and amplified on social media. Observers like Rachel Kleinfeld have argued that when these trends advance, economies overall and individual businesses face more challenging conditions. After a burst of comments and commitments on such matters several years back, most business leaders have retreated, choosing not to call out attacks on the rule of law and the rise of populism. Will this continue? Or is there a point when companies and individual business leaders conclude that they need to contest the decline of rule of law?

Will sustainability regulations in the EU be scaled back?

With a new European Commission and Parliament, political uncertainty in many European member states, and concerns that the regulatory frameworks governing various aspects of sustainable business are too onerous, expensive, and complex. There are growing signs that the regulatory requirements may be changed, with options ranging from consolidation, to delayed implementation, to withdrawal. Should changes come to pass, the question then becomes whether they are viewed as a pullback or U-turn from the Green Deal, or a refinement designed to make the rules more effective and efficient. Europe is likely to remain an engine of progress in formalizing sustainable business, but the pace and scale of that leadership is unclear as we enter the year.

Will companies pay a price for missing or reducing their targets?

Many companies are missing their targets, on important issues ranging from Scope 3 emissions to nature to diversity. As a result, many businesses are rethinking whether and how to set new goals looking out to 2030 or beyond. Regardless, the question remains: will companies face meaningful criticism from customers, employees, investors, stakeholders, or even litigants bringing legal challenges for these shortfalls? The ways that companies make sense of the simultaneous need both for pragmatism and ambition has huge consequences. It is not an option to choose only one of these two directions.

Will the focus on regulation prove transitory, giving way in 2025 to greater innovation and ambition?

This is a question of massive importance. Companies have spent untold hours, dollars, and euros preparing for new regulatory compliance regimes. The net result has been more effort dedicated to measuring performance than achieving progress. This is not a formula that will produce the innovation or positive outcomes that are urgently needed. With the 2026 implementation date for the CSRD looming, one big question is whether this is the last year of compliance readiness, and we return to our regularly scheduled programming, or whether regulatory readiness continues to predominate.

Will COP30 herald the demise of COPs as we have known them?

The climate, biodiversity, and desertification COPs in 2024 were widely seen as failing to deliver. What does this suggest about the viability of COPs as they are currently constructed and organized? Cristiana Figueres and Ban Ki-Moon took the lead in suggesting reforms to deliver more decisive and effective outcomes, only to be largely dismissed by the UN system. It is nonetheless clear that the inherent difficulty in achieving consensus amongst nearly 200 countries with highly diverging interests and power is preventing clear outcomes. Are the COPs destined to be considered in the same light as Churchill’s famous comment about democracy, “the worst form of government…except for all the others that have been tried?” COP30 in Brazil will be yet another stress test, not only for climate action, but also for the very COP model itself. And if the current version of COPs is not working well, what alternatives exist?

Is it better for COP30 to have the Trump-led US in or out?

In 2017, President-elect Donald Trump withdrew the United States from the Paris Agreement, ignoring calls from business, civil society, and many others to have the world’s largest economy and historic emitter remain. It is widely expected that he will do the same in 2025. This time around, there is a real question about whether the global effort to fight climate change would be better off with the US in or out. Should a Trump Administration remain in the Paris Agreement, the US might be a net negative, interfering with ambitious action at COP, and joining forces with other major oil and gas producing countries to water down, if not prevent, a meaningful agreement in Belem. Might it instead be better for the countries that are genuinely committed to progress on climate to move boldly ahead without the US?

Who will emerge as the new wave of sustainable business leaders, and how will they be different?

The last wave of sustainability ambition was characterized by high-profile CEOs, mostly from Western companies, who proclaimed new commitments and weighed in on many social issues. This was immensely valuable in catalyzing action and raising awareness. Today, the profile of leadership is changing. There are innovators coming from all corners of the world, not only the global north. There is a recognition that the voice of the rising generation that will be wrestling with the greatest impacts of climate change and technological innovations needs to be heard. The nature of leadership is also changing. While broad proclamations are important, delivering the goods is even more so. It is never easy to predict when and where leaders will emerge. But the next wave of leaders will be younger than the last, more globally representative, and more focused on delivery.

How will the role of the CSO evolve: will they be playing defense or offense, preserving gains, or pushing forward?

We closed 2024 with a look at how the role of the CSO is evolving, focusing on three archetypes: the steady manager, the integrated strategist, and the transformative change agent. Following the US elections in November, we added the “defender-in-chief,” a CSO who focuses on, well, sustaining progress to date as various forces push back on existing activities.

In 2025, it is likely that every CSO will have to play some defense. But it is equally true that any CSO who is unable to or prevented from painting a picture of transformative change will not be serving their company well. The world is experiencing transformative change, some of it directly related to sustainability, some of it indirectly related to sustainability. This presents both a massive opportunity to shape and leverage this change for positive sustainability outcomes. It also opens the door to link these changes to outcomes that benefit people and communities. And at a minimum, it demands attention to the many ways that companies can be resilient in the face of profound change.

Finally, and perhaps most importantly, how can we talk about sustainability in a way that will resonate with the general public, and demonstrate convincingly that these efforts will improve their lives and well-being?

It is increasingly clear that in the US and Europe many citizens, public officials, consumers, and others find the sustainability narratives that have been used over the past 30 years tired, uninspiring, and sometimes rather off-putting. Many in the public feel that an agenda is being forced on them that disregards their needs or interests, and is cooked up by elites they hold in low regard. Some of this is the fault of those of us in the world of sustainable business: we use too much jargon, providing opponents with a golden opportunity to mischaracterize—cynically—topics such as DEI and ESG to advance their own agendas. Addressing this, however, demands far more than simply seeking a “script doctor” for sustainability, or doubling down on arcane facts. The answer lies instead in a renewed effort to put people at the center of sustainable business. If we do not find ways to generate economic security and opportunity amidst massive technological, environmental, and social change, we can expect ongoing opposition to an agenda that will remain irrelevant at best, and dangerous at worst for many in the public. This will further stoke political blowback.

The year ahead will no doubt deliver questions we are not anticipating now. Over the last few years, we have experienced unexpected developments that seemed to flip the script for business and the wider world overnight. The pandemic was not predicted, and very few observers thought that sustainability would flourish once it hit, but that’s exactly what happened. With the new year only just underway, we have seen devastating wildfires turbocharged by climate change, more companies retreating from diversity efforts and content moderation, and renewed questions about the march of AI. These remind us of the urgency of our task.

At the same time, we also start the year with a good deal of focus on headwinds that have led to the so-called “sustainability recession.” These headwinds may obscure, though they do not erase, the underlying reasons why a more equitable economy that addresses planetary boundaries is so fundamental for innovative, thriving, and resilient companies, and to improve the lives and livelihoods of people and communities around the world.

Inevitably, there will be events that—for better or worse—provide a sharp reminder of that reality, and will catalyze a new sense of urgency. Will this happen in 2025, and if so, what and when? 

Blog | Thursday January 9, 2025

CSOs Are All Business: The Role of the CSO in a New Context

Preview

Do the results of the U.S. election change the role of the Chief Sustainability Officer? Based on a new round of interviews with sustainability leaders, the collective answer is: somewhat, but not as significantly as you might expect.

BSR recently published a new report: The CSO at a Crossroads: Three Paths Forward for Sustainability Leaders. Based on interviews with more than 30 Chief Sustainability Officers (CSOs), we charted the evolution of the role and described three archetypes: The Steady Manager, the Integrated Strategist, and the Transformative Change Agent.

The results of the US election raised questions about how dramatically the landscape for business and sustainability might shift. To explore this, BSR spoke to over ten participants from the original study—along with ongoing conversations with members—to see whether the election changed their perspective about their role. 

Taken together, the interviews point to the resilience of the sustainability function and the business-savvy of sustainability leaders. This does not make the role easy; on the contrary, many CSOs feel their role and strategies are under heavy scrutiny, with reanimated arguments about the business case.

One CSO characterized their current role as “the defender-in-chief, speaking with C-suite executives almost every day” to retain commitments to company goals.

Yet multiple CSOs noted that they had already substantially adapted to address the backlash against sustainability. As one CSO declared: “It’s hard to say how I will change my day-to-day because I’ve already changed it.” Every CSO interviewed confirmed that the direction of the report, and the relevance of the three archetypes, still hold true, but they are now adapting to a changed political context.

CSOs will continue to emphasize business fundamentals such as regulations, business resilience, and performance

The CSOs we spoke with consistently pointed to foundational reasons why sustainability is critically important, citing the role of sustainability in compliance with global regulations, building business resilience, and creating positive impact on business performance.

For global companies, non-US markets are also essential. One CSO observed that their company “is more focused on EU and UK regulations—the outcome of the US elections has not really changed any of these priorities.” Another emphasized “a focus on metrics and numbers and business impacts. That hasn’t changed, and is the way to keep the work grounded.” The focus on business impacts may extend to highlighting the role sustainability can play in job creation and quality, such as through investments in new technology. That framing may hold appeal to executives as well as policymakers.

Commenting that there may have been “role creep” in recent years, one leader urged: “We need to give everyone a course on materiality 101 and get CSOs to be vigilant on what is material to their business. If they maintain that focus, then all we are talking about is business viability and profitability.” 

Companies will continue to show caution, especially on commitments and communications

At the same time, interview subjects anticipate a reduction of voluntary commitments and communications. “Communications around performance won’t change, but any additional communications will likely cease. We’re not looking for bold. We don’t want to be a target. We’re meeting what’s required by the law, but that’s it.”

Some executives may also be looking for an “excuse” to reduce resources and exposure on sustainability: “I’m worried about the skeptics using the election as a reason not to do voluntary things.” This concern is especially potent at companies where sustainability is less embedded.

CSOs expect uncertainty and risk in particular areas including DEI, geopolitics, the business operating environment, and employee protections

CSOs cited several areas of greater uncertainty and risk of negative impacts post-election, including:

• DEI: “DEI as DEI will change,” explained one leader. Companies are likely to pivot to a broader consideration of “inclusion” and “belonging,” putting existing DEI efforts (like employee resource groups) in jeopardy and potentially affecting hiring, retention, and development of diverse talent. They may also innovate with aspects of diversity that are not tied to race or gender, such as disability, neurodivergence, or economic mobility.
• Geopolitics, Supply Chains, and Trade: A potential global retreat from cooperation and open trade (exemplified but not exclusive to the US elections) threatens global action on climate change. It also imperils efforts to build more resilient and sustainable supply chains. There is also renewed concern that intergovernmental processes, such as COPs, will not succeed, imperiling progress and adding uncertainty.
• Focus on Industry-Specific Matters: Many of those interviewed said their business was much more focused on the industry-specific risks they expect from the new context, rather than broader attacks on sustainability issues. This will include uncertainty caused by deregulation, as well as product-specific attacks on a range of issues from vaccines to food ingredients to new technologies or renewable energy.
• Employee Protections and Benefits: Threatened rollbacks in areas like LGBTQ rights and reproductive rights, paired with aggressive action to restrict immigration and increase deportation, may create direct harms to employees and their families. Companies would then be forced into rapid response to help employees, retain trust, and respect human rights.

CSOs can leverage compliance, foresight, and expanded stakeholder engagement to build resilience and maintain impact

“Sustainability is not a four-year political term. We’re here for the long term. Every sustainability person is thinking about 2030 as well as 2040 and 2050.”

Our interviews don’t point to a major revision to BSR’s three archetypes for future CSOs, yet the incoming administration means that a key aspect of all sustainability leadership roles will be to defend against backsliding. The urgency, scale, and impact of current challenges will require CSO leadership to reassert ambition in strategic integration, innovation, and transformative change to create a just and sustainable world.

The interviews do point to three recommendations for CSOs to build resilience and maintain meaning and impact in their roles over the next four years:

1) Leverage compliance to achieve impact. Many global companies are now required to develop a double materiality assessment (CSRD), a robust approach to emissions tracking and climate risk management (California laws, ISSB, etc.), and human rights diligence (CSDDD). Compliance also requires professionalization and integration of sustainability to maintain appropriate governance, rigor, and investment—all of which serve as a bulwark to pull back. Moreover, companies are not obliged to “work to the rule,” and focus only on narrowly defined compliance; they can take a broader, more intentional approach to the spirit of the rules/laws. Compliance may define the “floor” for businesses, but it is not designed to establish the “ceiling.”

2) Prepare for uncertainty. For a wide range of reasons, including the US elections and economic, geopolitical, technological, and cultural volatility, companies will face many uncertainties in the years ahead. CSOs will benefit from futures thinking, simulations, and scenario analysis that illustrate and elevate the relevance of sustainability in understanding a changing world. Longer-term foresight is also a helpful way to put current headlines into the context of sustainability realities (like climate risk) and future “snapback.” A good place to start is BSR’s work on “Between Two Worlds: Sustainable Business in the Turbulent Transition.”

3) Reimagine stakeholder engagement. More effective stakeholder understanding and engagement can help companies better anticipate and navigate newly volatile topics such as health, geopolitics, political risk, and the links between sustainability and employment.

Employees will be an important stakeholder group, as many of the biggest risks of the coming years will show up for companies via employee impacts in areas like economic security and mobility, DEI, reproductive rights, and immigration. Companies will benefit from more internal stakeholder listening and relationship building, and advance preparation to respect human rights. Finally, the election results raised alarms that central tenets and language of the sustainable business movement may not be connecting with key audiences and intended beneficiaries. 

CSOs (and the field more broadly) may benefit by going to less “comfortable” settings and reaching out to stakeholders who feel left out of the movement. As one leader observed, “None of our sustainability slogans speak to how difficult it is to be middle class in America.”

“We need to reflect on how we talk about sustainability to get away from the jargon and go to topics that the average person will care more about. We’re talking to ourselves too much and we’ve missed the plot.”

BSR members can access new guidance in all of these areas in 2025.

While these tactics may not be sufficient to meet the urgency and scale of global challenges, they may help sustain and advance progress through a challenging period.

For amid the realism, uncertainty, and caution expressed by CSOs, we were once again struck by their determination, acuity, and optimism. 

CSOs continue to work every day to build coalitions that create stronger companies, thriving economies, and a just and sustainable world. As one CSO commented: “We can’t change society with just one political party—we need to win over bipartisan audience and figure out a way to bring people with us.”

Audio | Wednesday January 8, 2025

A Conversation with Darsh Myronidis, Group Director of Sustainability, Virgin

Preview

Darshana Myronidis, Group Director of Sustainability at Virgin Group, chats with BSR Managing Director, Transformation Christine Diamente, and host David Stearns about of the evolution of her role at Virgin, strategies for embedding sustainability within a company, how to maintain momentum in the face of externalities developments like the recent outcome of the U.S. election, and where the greatest opportunities for significant progress lie.

People

Darshana Myronidis

Preview

Blog | Thursday December 19, 2024

A Launchpad for Action: Key Tech and Human Trafficking Priorities in 2025

Preview

The third Tech Against Trafficking Summit, hosted by Amazon in London, convened over 160 anti-trafficking and tech leaders to identify priority action for leveraging technology to combat modern slavery and addressing its misuse.

Over the three-day program of policy roundtables, plenary sessions, workshops, and a dedicated tech day for NGOs, the discussions focused on three top-of-mind tracks for the anti-trafficking field. 

With insights gathered from human rights leads at global companies, suppliers, anti-trafficking NGOs, and experts with lived experience, here's what we learned about the key individual and collective priorities for business in 2025.

Key Priorities for 2025 

Supply chain data sharing on forced labor 

1) Streamlining forced labor data points collected by business: TAT consultations over the past year have highlighted that there is a lack of clarity about precise actual or proxy data points collected by business on forced labor. The ILO indicators offer a useful blueprint for business, but they remain imperfect with differences in how these are interpreted and integrated into businesses’ human rights due diligence tools. Too many data points by business are collected with limited understanding about their effectiveness and in a way that is extractive for information holders.

Through a multi-stakeholder convening in 2025, Tech Against Trafficking will look to streamline and consolidate list of forced labor data points in alignment with ILO indicators. A more focused set of data points aims to help business reduce the volume of information collected and requested from suppliers and enable a better tracking and measurement of improvement over time.

2) Bringing corporate suppliers into the conversation on the forced labor data ecosystem: Corporate suppliers are required by clients to provide data on forced labor via self-assessment questionnaires (SAQs), surveys and audits (desktop and on-site). Yet they are not always kept informed about how their data is used. 

In 2025, businesses with global supply chains have the opportunity to engage with selected corporate suppliers, including small and medium-sized enterprises (SMEs), to understand the challenges they face in collecting and sharing data points on forced labor and find opportunities to make the current system less extractive. 

Addressing trafficking on digital platforms 

3) Building effective information sharing platforms for identifying and disrupting trafficking networks. Secure platforms, forums, or mechanisms for sharing information, such as trends, data, patterns, and indicators, are needed to enhance business awareness of online harms and investigative capabilities. Collaborating with peer companies, law enforcement agencies, and financial institutions can facilitate the exchange of critical information and lead to more effective investigations. Further information gathered from individuals with lived experience and experts can bring additional perspectives. 

Through its dedicated workstream on online trafficking, Tech Against Trafficking will bring together leading tech companies to share practices and challenges, as well as information about emerging threats to address the misuse of technology platforms in a collaborative manner. 

4) Leverage technology to maximize impact, including via collaboration: While there are limited resources for companies and organizations to address online trafficking issues on their own, scaling up the use of advanced technologies, like machine learning, can enhance detection capabilities and streamline investigative efforts. Tech solutions deployed should account for and be calibrated to the rapidly evolving tactics employed by traffickers. Tech companies can also look to collaborate across sectors, such as financial services and child safety, to share insights, tools, and technologies. 

Tech innovations, AI, and human trafficking 

5) Engaging end users and lived experience experts in the design of anti-trafficking technology solutions: This includes lived experienced experts who can inform the design and deployment of tech tools. This is particularly critical to scale the potential of technology, prevent harms for those in situations of human trafficking (in terms of accuracy and bias of data), and ensure trauma-informed or victim-centered approaches. 

This effort can take a variety of forms, including the involvement of end-users in the design of technology solutions to ensure they are contextually relevant, as well as collaboration with survivor organizations. 

6) Building a culture of trust with end-users: Developers of anti-trafficking technologies should ensure transparent communication with stakeholders (especially end users) about technologies being used, including what they are, why and how they are being used, and how information processed through them will be managed. This will likely build trust in utilizing tech solutions and make such technology innovation effective. 

2025 will likely bring new opportunities in how tech is deployed to address human trafficking and forced labor globally, including how to inform corporate forced labor data collecting and sharing efforts. On the flipside, tech will also continue to present challenges in how online platforms are leveraged by traffickers. Addressing these six priorities is a good start for the broader anti-trafficking community to co-design context-specific anti-trafficking solutions and respond to changing tactics in a collaborative and effective manner. 

BSR is the secretariat of Tech Against Trafficking, a coalition of leading technology companies collaborating with global experts to help eradicate human trafficking and modern slavery using technology. Explore the TAT Summit's outcomes and for more details about how to join Tech Against Trafficking, contact the Tech Against Trafficking team.