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Blog | Wednesday December 19, 2018

COP24 Set the Rules of the Road; Now We All Have to Drive

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In a part of Poland where local residents still have bags of coal delivered to heat their homes, the 2018 UN Climate Conference (COP24) in Katowice saw countries agree to rules on how they will measure and report progress to reduce carbon emissions under the Paris Agreement.

In the context of a challenging global political landscape on climate, crafting a single set of rules that brings the Paris Agreement to life was a significant achievement. But it’s important that we don’t confuse setting the rules of the road with strong climate leadership.

What’s at stake could not be clearer. COP24 began in the shadow of the IPCC’s Special Report on the impacts of 1.5°C of global warming. The report warned that failing to reach global net-zero emissions in 2050 would cause more extreme weather events, additional damage to coastal infrastructure and reduced food security. Achieving the 1.5°C goal would improve health, reduce poverty, and help build a sustainable, resilient economy that leaves no one behind.

Business ambition was on full display at COP24, with shipping giant AP Moller Maersk announcing a net-zero carbon goal by 2050, IKEA announcing 80 percent reductions of emissions from production processes by 2030, and American utility Xcel Energy announcing a switch to all zero-carbon power by mid-century.

Companies including Mars, Mahindra, and Microsoft urged governments to choose the economic opportunities of our zero-carbon future over the economic risks of our high-carbon present and past in their “Talanoa Dialogue” discussions with Ministers. This was backed up by the 500 companies now committed to the Paris-aligned emissions reductions known as science-based targets.

One of the early outcomes of COP24 was the conclusion of the Solidarity and Just Transition Silesia Declaration. It demonstrated that enhancing political will for climate action will depend on ensuring that the economic opportunities of the zero-carbon transition are widely shared, while minimizing disruption to people and communities. Governments who ignore the need for a just transition risk growing unemployment and even civil unrest.

Businesses made a joint call to action at the Global Climate Action Summit in September. At COP24, they joined investors, cities, and regions to call on governments to increase domestic policy ambition, develop long-term plans toward the net-zero economy, and help create quality jobs.

While the Paris rulebook underpins global ambition over time, COP24 fell short of an explicit commitment to improve domestic policies over the next two years. However, in the spirit of the Paris Agreement, a High Ambition Coalition—including Canada, the European Union, France, Germany, Italy, Spain, the United Kingdom, New Zealand, many small island states, and the group of Least Developed Countries—emerged to announce that they would step up ambition by 2020.

The High Ambition Coalition invites businesses and other sub-national actors to join them in this effort, and we encourage you to do so by email here.

For businesses digesting the impact of the COP24 outcome, the developments provide glimpses into our future.

• First, sub-national coalitions are steering us toward ambition. The We Are Still In movement in the U.S. and the Global Climate Action Summit demonstrate that together, businesses, investors, cities, and regions can be as impactful as national governments—or more.
• Second, the High Ambition Coalition is the way forward. In a fractured international political landscape, businesses taking strong climate action will find friends banding together and governments offering their hand. Progress will come from different constituencies arm in arm.
• Third, through rising support for the just transition, the climate and inclusive economy agendas will increasingly intersect. More and more, we must emphasize how climate action does not merely protect our environment. It reduces inequality, generates jobs and improves public goods like health.

For those willing to drive action toward a zero-carbon future, the next stop is already on the horizon—the UN Secretary General’s Climate Summit next September. By then, we will measure success not by the road underneath us, but by how fast we are going.

Find out how your company can take action.

Blog | Wednesday June 8, 2022

How the SEC Can Mandate Climate-Related Disclosures and Drive Corporate Action

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The SEC's proposed rule on the Enhancement and Standardization of Climate-Related Disclosures for Investors is part of a global movement to improve and harmonize climate-related financial disclosures, which support informed investment decisions and incent ambitious action.

The European Union (EU) and other jurisdictions outside the United States (US) are mandating climate disclosure. Over 2600 companies have already committed to similar disclosures, and the world's largest asset managers are demanding them. By codifying a climate-related disclosure rule, the SEC joins a broad network of institutions formalizing the production and publication of the information investors need to make decisions.

This leadership from the world’s largest economy is significant and can help prevent a fractured disclosure landscape for US companies since many will be required to comply with climate reporting mandates in other jurisdictions.

BSR welcomes the proposed rule as a necessary (but not sufficient) feature of regulatory efforts to ensure urgent action by companies and investors to address the climate crisis.

In support of the SEC’s current efforts to react to market demand for comprehensive climate-related financial disclosures, BSR responded to the latest public consultation on climate-related disclosure and encouraged the Commission to publish a final rule that includes the following:

1. Disclosure requirements that are fundamental for effective climate-related decision-making

The final rule should be just as comprehensive as the proposed draft and require disclosure of key climate-related information in financial filings, including companies’ scope 1, 2, and 3 emissions, assurance for scope 1 and 2 emissions, and governance metrics, particularly those that show board-level involvement.

2. Balances prescriptiveness and flexibility that provides clear guidance to report preparers

Greater clarity in a final rule on elements that are currently open to interpretation—and relevant resources that may aid disclosure—will enable companies to comply more easily.

3. Provides additional accommodations for preparers

BSR supports accommodations for preparers included in the proposed rule. The Commission can also consider additional methods of flexibility, such as allowing an extended period of acceptable estimates for scope 3 emissions and clarifying expectations related to re-baselining of goals and targets in line with globally accepted methodologies.

4. Supports ambitious voluntary commitments

Certain provisions of the proposed rule may disincentivize new climate action and target-setting by requiring disclosure only if the company has a plan or target in place. Accordingly, the SEC should consider adopting a “comply or explain” approach for conditional disclosures (e.g., scope 3 emissions, climate-related goals, targets and transition plans, and the use of climate scenario analysis) where companies would either disclose their approach or explain why they do not have one.

We also emphasize the importance of providing companies with a strong liability shield or “safe harbor” for certain disclosures (e.g., climate scenarios analysis) where uncertainty is inherent in the information being reported and where the absence of these protections may have a chilling effect on disclosure.

5. Is harmonized with relevant global reporting standards and requirements from other jurisdictions

BSR supports the important step that the SEC has taken in building its proposed rule upon broadly accepted reporting frameworks. Accordingly, the SEC should allow the use of alternative reporting provisions that are harmonized with criteria developed by the International Sustainability Standards Board (ISSB) to ease the reporting burden on companies that will also be required to report against these provisions in other jurisdictions.

BSR strongly supports the SEC’s decision to require climate-related financial disclosure, acknowledges the merit behind the Commission’s efforts to create a comprehensive yet accommodating proposed rule, and encourages the SEC to issue a final rule that continues to drive alignment in the reporting landscape, leads to improved climate-related risk management and governance, and incentivizes credible climate action.

BSR will continue to engage on this issue, and in ESG reporting more broadly, through our Future of Reporting collaborative initiative. We encourage companies to get involved in the consultation process by showing support for the proposed rule and the SEC’s efforts to harmonize the reporting landscape and highlighting ways the Commission can strengthen the rule for the benefit of all stakeholders.

Blog | Friday June 22, 2018

Sustainability Standards Driving Impact for Women in Global Supply Chains

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Sustainability standards and multistakeholder initiatives (MSIs) like Fairtrade International, Better Cotton Initiative, Rainforest Alliance, and the Fair Labor Association provide a set of tools and approaches to improve social, environmental, and economic conditions in global supply chains. These organizations and standards have played a powerful role in promoting good practice in certain industries, such as apparel and agriculture, where women make up 60-90 percent of the workforce in labor-intensive stages of production.

Gender is one key area where these groups have the opportunity to do more to drive systemic improvement for women working in factories and farms. In particular, there is potential to scale up the impact that sustainability standards and MSIs bring to women in global supply chains.

At an international level, the Sustainable Development Goals (SDGs), and SDG 5 in particular, have galvanized interest on gender equality and empowerment. The standards community is innovating around core technical issues like assurance, standard-setting, and monitoring and evaluation. Moreover, using data to drive change, working collaboratively, and breaking down silos between technical functions will further scale up the impact of these innovations on important issues, including gender.

During a recent session in São Paulo with ISEAL, an alliance of credible and innovative sustainability standards, we discussed several entry points for standards groups and MSIs to further invest in progress on gender.

• Standards: Standards cannot be gender blind, and ISEAL members are assessing the gender component of their standards in their periodic revisions. It is important to ensure a strong gender perspective in the language—for example, including guidance on how principles such as discrimination, harassment, wages, and working hours could impact women specifically.
• Gender-sensitive assurance: Sustainability standards can strengthen assurance processes—for instance, auditing teams should be equipped with training and facilitation skills to identify and address gender specific issues. SAN (Sustainable Agriculture Network) and Rainforest Alliance recently published an updated additional social auditing methods for sexual and psychological violence against women, which is one example of what this can look like.
• Systematic, robust, and transparent monitoring and evaluation: Data matters, and there is interest from sustainability standards groups to include more robust and meaningful indicators to track progress on gender equality in performance monitoring efforts, as well as to conduct in-depth evaluations. The Global Coffee Platform released a common measurement framework to guide collection of data relevant to promoting gender equality in coffee value chains.
• Capacity-building and awareness-raising: Sustainability standards can support capacity-building with suppliers to improve practices in factories and on farms, either directly or via local implementing partners that are part of existing systems. The Fair Labor Association is using its influence to raise the issue of pregnancy discrimination through its recent report.
• Gender mainstreaming: Some organizations are showing leadership by mainstreaming gender into their own organizations, creating gender task forces to help integrate gender components across projects and departments, and investing in gender experts.

These initiatives are a great start, but there is a need to go deeper and ensure that a substantial number of sustainability standards and MSIs take a comprehensive approach to gender. That’s why ISEAL and BSR have teamed up to organize a pioneering Gender Working Group for Sustainability Standards.

The Gender Working Group, which launched in May with support from the C&A Foundation, will convene standards organizations and MSIs to share their experiences addressing gender, learn best practices, and address frontier issues like women workers’ voice and gender data.  

Our ambition through this collaboration is to drive systemic change to improve conditions for women workers in global supply chains—but we need a broad base of organizations to optimise our impact.

We will give special attention to the apparel and textile sector and facilitate cross-sectoral learning, but other perspectives are welcome. If your organization is a sustainability standard or an MSI interested in working on the topic of gender, we’d love for you to join the conversation.

For more information, please get in touch.

Blog | Tuesday February 14, 2017

Turning Global Challenges into Collaborative Solutions: BSR's Collaborative Initiatives

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Since being founded 25 years ago, BSR has had a consistent focus on uniting the business community and its stakeholders in collaborative initiatives that co-create solutions to systemic business and sustainability challenges. Today, we’re engaging more than 200 companies in 20-plus initiatives, covering a wide range of sectors and issues—from clean fuel for commercial road freight to ethical practices in luxury-industry value chains. And BSR had a hand in developing several well-known initiatives that today operate as independent organizations.

With the continuous efforts of our members and stakeholders, this collaborative work generates concrete positive outcomes for business, societies, and the environment through sharing best practices, changing business norms, and driving collective, sustainable solutions. For example:

• The Healthcare Working Group has developed the Guiding Principles on Access to Healthcare, through which CEOs of 13 major pharmaceutical companies have framed their efforts to reduce the global burden of disease by helping ensure that medicines, vaccines, diagnostics, and other medical technology and assistance are effectively developed and deployed.
• Through the Future of Internet Power, more than 20 technology companies have committed to sourcing 100 percent renewable energy for their data centers.
• Companies in the Responsible Luxury Initiative have developed and adopted a set of high-level principles for the sourcing of leather, fur, and exotic skins.
• The Clean Cargo Working Group continues to provide a leading industry platform for promoting responsible shipping, as well as reliable year-on-year emissions performance data from 23 of the world’s leading ocean carriers that represent approximately 85 percent of global ocean container capacity.
• The Maritime Anti-Corruption Network, now with more than 80 corporate members, is working with governments, local authorities, and civil society stakeholders around the world to improve the transparency, efficiency, and integrity of business operations at global trading hubs. 

Commitment to Transformative Change

The growth and impact of these initiatives demonstrate a clear desire among companies and stakeholders for coordinated action—but we’re convinced that we can go even further to drive truly transformative change. Last year, the United Nations reinforced this message with the inclusion of the 17th Sustainable Development Goal (SDG), which recognizes that the other 16 goals will only be achieved through “partnership that brings together governments, civil society, the private sector, the United Nations system, and other actors and mobilizes all available resources.”  

This year, we are strengthening BSR’s capacity to convene business and stakeholders to develop and scale collaborative initiatives that overcome the challenges the SDGs present. We will seek to radically evolve our capacity to drive transformative change through collaborative initiatives, using the following principles for success:

• Collaboration requires meticulous management: We’ll strengthen our operational capabilities, such as communication, technology, governance, and administration platforms.
• Impact requires scale: We’ll strengthen and scale our existing Collaborative Initiatives through several approaches, including by partnering more effectively with stakeholders, funders, and governments.
• Innovation requires multistakeholder involvement: We’ll employ inclusive and interactive innovation processes to incubate and develop new collaborative initiatives.

This work will build on our platform of key initiatives that tackle systemic challenges, and we will actively engage with our members to ensure that the new collaborations address their business needs, as well as drive positive societal and environmental change. This includes reaching out to our network to understand which issues our members and partners most want solved, as well as hosting a series of multi-day, multistakeholder workshops focused on systemic challenges and new ideas for collaboration.

Look out for further opportunities to engage as we build out this key element of BSR’s business leadership strategy for a just and sustainable world.

Over the next two weeks, we’ll highlight outcomes and impacts from BSR collaborations in a social media campaign—follow @BSRnews—and on the BSR blog.  

Blog | Tuesday March 1, 2022

Ukraine: The Business Response

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The news of Russia’s invasion of Ukraine has shaken the world.

First and foremost, we stand with the brave people of Ukraine, who have been subjected to unnecessary and unfathomable suffering due to this illegitimate and brutal invasion of a sovereign nation. We are horrified by the death, destruction, and displacement Ukraine is experiencing. We urge the rapid end to this conflict with the restoration of full respect for democracy, rule of law, and human rights, and international cooperation to end the suffering of the Ukrainian people. This invasion should also remind us that millions of people in many parts of the world also continue to live under the threat of devastating political violence, often without the global attention the invasion of Ukraine has received.

The situation in Ukraine raises significant questions for business. Vast numbers of companies have ended or suspended their activities with Russia, combined with economic sanctions undertaken by numerous governments. We strongly support these efforts, in the name of the most rapid end possible to this conflict.

While the situation continues to unfold rapidly, there are seven key points for business to consider. Some point to immediate actions, and some relate to longer-term questions. BSR has been providing updates and advice to companies on how they can and should contribute to the most rapid resolution possible.

• Protect Staff: First and foremost, it is crucial that companies take all measures to ensure that their staff in affected locations are protected and that they can offer support to relatives in Ukraine, Russia, and other affected countries. This support extends to the impact these events may have on colleagues who are not directly affected, but who are concerned about new security risks presented by Russia’s actions.
• Express Support for Rule of Law: We have called in other contexts for businesses to express their support for democracy, human rights, and rule of law, and this is a time to restate these calls to action. At a time when human rights, democracy, and rule of law are under threat in all regions of the world, business should use its voice clearly and consistently to reinforce these fundamental underpinnings of both society and business.
• Withdrawal or Suspension of Commercial Relationships: Hundreds of companies have decided to withdraw from Russian activities. These decisions, taken by the lion’s share of international business, avoid potential complicity in the invasion. They also stand to reinforce the economic sanctions undertaken by most of the governments of the world’s largest economic actors and send a strong signal of solidarity with the Ukrainian people.
• Support Relief Efforts: Business can bring to bear the financial, logistical, and other support that can mitigate the human suffering of refugees and others displaced by this conflict. In addition to direct support, business can and should express its support for refugee and other displaced populations, not only in Europe but elsewhere.
• Stay Focused on Climate: Yesterday’s report from the Intergovernmental Panel on Climate Change (IPCC) makes plain the need for decisive, urgent action to combat the growing climate crisis.  The situation in Ukraine is now occupying the minds of policymakers and business leaders. The spike in energy prices is already causing some to argue that we cannot “afford” to focus on clean energy. We cannot let the urgent crowd out our focus on matters of long-term importance. Business leaders should not only reconfirm their commitment to net zero, but also communicate to policymakers that we cannot lose precious time in the transition to an inclusive clean energy economy.
• Prepare for Future Threats to Resilient Business: The news from Ukraine reinforces the essential value of futures thinking in business strategy. As Nik Gowing has written, we are living in an era when the previously unthinkable becomes reality. This extends well beyond geopolitics to social, economic, and environmental shocks. Futures thinking through the lens of scenarios enables companies to anticipate profound change. Boards and leadership teams should use these tools to ensure that their businesses are truly resilient.

The world is facing another humanitarian crisis, and an attack on the rules-based international order. Business action can help to alleviate suffering, express global solidarity with displaced people and support for human rights, and, in doing so, reinforce practices that will help their companies achieve resilience in the face of a world that delivers wave after wave of change.

Blog | Thursday March 8, 2018

On International Women’s Day, Let's Press for Progress in Global Supply Chains

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Over the past several months, we have seen unmistakable evidence that women around the world continue to face mistreatment. On this International Women’s Day, let us commit to use these stories to strengthen our resolve to ensure that women—and men—everywhere are empowered to create workplaces, communities, and societies in which women can thrive and be treated with respect.

Last week in Bangladesh, we visited sites of HERproject, a BSR collaborative initiative to empower low-income women working in global supply chains. In meeting with partners and speaking with women working in the country’s apparel sector, we saw firsthand the promise of business action to promote women’s health, financial literacy, and autonomy.

HERproject was launched just over 10 years ago, in recognition of the fact that there was a massive opportunity to not only make sure that the vast numbers of women working in global supply chains have basic legal protections, but also that they can become agents of change for themselves and their peers. We are proud that in the past decade, HERproject, working in collaboration with dozens of local partners inside the supply chains of more than 60 global apparel and agricultural companies in more than 700 workplaces, has empowered more than 800,000 women.

Our travels through the endless sprawl of Dhaka allowed us to spend time with the women who are making HERproject a success. In one apparel factory we visited, we saw the training of 40 peer educators in a factory that employs 5,000—training that will enable them to help their colleagues access health care. Tapoty Roy, a line supervisor and peer educator who has worked in the garment sector for the last 15 years, proudly told us how she has become a valued resource for the 60 women she oversees. "They come to me and ask for support with work or their home life, and they know I will help.” The information transmitted through the program enables women to reduce absences, keep newborns healthy, and build confidence and pride that strengthens both their personal and professional lives.

And the program’s benefits are not just for women. Sweet Begum, another factory worker who invited us to her house, introduced us to her son-in-law, who explained that he is using what he learned from Sweet Begum to train the men in the factory where he works.

These stories and many others demonstrate HERproject’s premise: Women in global supply chains represent a powerful force for change that can help ensure that global trade delivers human progress. Through coordinated action in global supply chains, we can stand with these women as they improve their lives and the lives of those around them.

In a sector that employs millions of women, often in difficult working conditions and societies that struggle to ensure public health, there is much left to do. Systemic barriers to women’s financial autonomy, access to health care, and gender-based violence are all too often a reality. Moreover, women working in global supply chains are subject to additional challenges, as exemplified by the statistics that indicate that Bangladeshi garment workers face far higher levels of sexual harassment and violence than the reported national average in Bangladesh.

The example of the women we met in Bangladesh the past few days is inspiring. One peer educator in Gazipur explained matter-of-factly that she makes sure that all 60 of the women in her line in the knitwear factory implement everything she’s learned from the HERhealth training. Thanks to her and the thousands of other peer educators HERproject has worked with, hundreds of thousands of women have seen the possibility that better information, opportunities, rights, and conditions can bring to their lives.

But they will only fully succeed once their leadership is supported by their colleagues, family, and supervisors—as well as the companies for which they produce.

We firmly believe that if all players across global value chains—buyers, suppliers, customers, women, and men—#PressForProgress, we can achieve a future where employment and empowerment go hand-in-hand for women workers, and where an empowered female workforce is widely recognized as a driver for business success.

On this particular International Women’s Day 2018, the need for action has never been clearer. As we have seen in stark terms through the #MeToo and #TimesUp movements, there is a need to do far more to ensure that women are treated with respect and fairness, both within and outside the workplace.

This means more companies need to stand up and say, “We too will champion the rights, needs, and equal opportunities of women—not only in our headquarters, but across our supply chains.” In this context, we look forward to collaborating with you this year to empower even more women around the globe.

Blog | Thursday January 9, 2025

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

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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.”

Blog | Friday November 8, 2019

The New Climate for Corporate Political Accountability

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Corporate political accountability has become an increasingly important issue for stakeholders, particularly investors who often rate it as one of their top corporate sustainability issues. Over the past three years, investors have filed almost 300 environmental, social, and governance (ESG) corporate resolutions on this topic alone.

Specifically, investors and other stakeholders are focused on four key aspects of political accountability: corporate lobbying, political contributions, political/industry association support, and public positions on sustainability issues. According to the Center for Responsive Politics, through its website opensecrets.org, a record amount of over $3.4 billion was spent on lobbying in the U.S. at the federal level in 2018, with the majority coming from corporations and the industry associations they support. A significant amount was also contributed at the state level.

The ever-increasing involvement of corporate money in the political process can be traced in a large extent to the Supreme Court case of Citizens United almost 10 years ago. The ruling allowed for unlimited contributions by corporations and unions, the development of political action committees (PACs), and “dark money” contributions by non-disclosed donors.  

What can corporations do to demonstrate alignment between their political activity and corporate sustainability strategies and goals? 

A large concern for an organization such as BSR, as well as many other stakeholders, is that while corporations develop sustainability strategies on environmental and social issues, subsequent political activity is not aligned with those sustainability positions. For example, many leading auto companies have strategies and goals to reduce climate and environmental impacts. It is not always clear, however, if political activity and lobbying efforts by the same auto companies are aligned with those environmental goals, particularly in cases where they are not disclosed.  

This leads to the question: What can corporations do to demonstrate alignment between their political activity and corporate sustainability strategies and goals? We recommend the following three good practice approaches.

Transparency

Although there are some legally required disclosures for corporations on their political activity, good practice – and what is increasingly expected by stakeholders – is that corporations go further. The annual CPA-Zicklin Index of Corporate Political Disclosure and Accountability, which was released in late October and is managed by the Center for Political Accountability and Zicklin Center for Business Ethics at Wharton Business School, is a well-respected and publicly available resource for companies to gauge how well they are disclosing their political activities against 24 scoring criteria.

A positive takeaway is that the Index shows there has been a “trend toward enhanced accountability, transparency, compliance, and oversight across all corporate sectors” since Citizens United. I recently spent a day with CPA-Zicklin team, as well as many leading experts on this topic, and the key takeaway from the discussion was that transparency alone is not enough – the intent of the political activity and public positions on issues are what is really important.   

Principles

A key attribute of a best practice approach is to have principles-based alignment on the topics which a corporation will advocate for/against to provide insight into the intent for political activity. A good example of leadership is Microsoft’s Public Policy Agenda which provides a framework for the sustainability issues on which they engage the political process. As a principles-based document, Microsoft provides a set of material sustainability issues – e.g. freedom of expression, immigration, privacy online, etc. – on which it plans to advocate and the general positions it will take. This Agenda allows for a clear and concise way for stakeholders to review Microsoft’s actual political activities against their own stated positions.

Partnerships  

A major form of corporate lobbying and political activity comes indirectly through political or industry associations. Many of these types of organizations have diverse supporters and take positions on a variety of public policy topics which makes it complex to determine how well aligned they are with a corporation’s sustainability interests. In addition, many corporations do not have clear criteria to decide which groups they should support and how to manage any conflicts of interest with these groups.

Shell is a good example of a company that has a publicly available report on its involvement and criteria for political/industry associations. As an proof point, Shell recently ended support for an industry association due to increasing misalignment. A lesson learned is that periodic review for alignment on material sustainability issues is needed.

Along with senior leaders from the Center for Responsive Politics, Trillium Asset Management, and BSR, I will be exploring this topic further next week during the session The New Climate for Corporate Political Accountability at the BSR Conference 2019 taking place November 12-14 in San Jose, California. I hope you can join us to participate in the discussion of how corporations can improve their efforts and adopt good practice with regards to political accountability. We look forward to seeing you there.

Blog | Tuesday September 29, 2020

Three Futures of Company Climate Action

Preview

When BSR carries out climate scenario analysis, we construct three or four plausible futures that capture the disruption relevant to a company’s business. We then work with the company to make its strategy more resilient, e.g. by hedging against risks in more than one scenario, by guarding against disastrous tail risks, or by investing in unexpected business opportunities. Climate scenario analysis then reveals how climate action by the company can build resilience to potential disruption.   

This year’s Climate Week NYC has advanced a shift from climate commitments to climate action, which we must accelerate to keep the Paris Agreement goals within reach. What will company climate action look like in this Decisive Decade? Here are three plausible futures for companies considering their own climate and environmental strategy. 

1. To Net Zero and Below 

Two years ago, the IPCC’s Special Report on 1.5°C made it clear that to reach the Paris Agreement’s stretch target, we will need to reach global net zero emissions by 2050. The north star of net zero is followed by countries—witness the EU’s move towards climate neutrality by 2050, and China’s surprise pledge last week to reach carbon neutrality by 2060. If achieved, China’s pledge alone could reduce warming by 0.2-0.3°C.  

Companies too have followed this north star. Last week, Walmart targeted zero emissions across global operations by 2040. In June, Unilever targeted net zero emissions from all of its products by 2039. In January, Microsoft targeted becoming carbon negative by 2030 and removing all of its historical emissions by 2050. 

These targets and others like them reveal the main questions companies must answer about their future climate action. Will the company act on its own operations or also across its value chain? (Value chain action is usually more impactful.) What hierarchy of emissions reduction interventions will the company undertake to progress towards its target? (One which maximizes the company’s credibility and environmental integrity.) What will be the role of offsets—whether of avoided emissions or which sequester carbon from the atmosphere? (Hopefully secondary to action in the company’s own value chain.) The Science-Based Targets initiative (SBTi) last week published a paper on the conceptual foundations for net zero targets, attempting to bring some standardization to the debate.  

2. Science-Based Everything 

Indeed, the success of the SBTi over the past five years, with nearly a thousand companies committed to emissions reduction targets, points to a second plausible future. If science can ground a company’s climate target, can it ground all of a company’s environmental targets? Can we have a science-based corporate environmental strategy? 

This is the premise of the initial guidance published by the Science-Based Targets Network last week. The SBTN proposes a framework which can apply to all environmental targets, even if the science underlying them is very different. Companies will need to work through the challenges related to their particular environmental targets, much as Mars did using Science-Based Problem Solving. 

The implications for climate action in this future are clear—that it will increasingly align to objective science rather than subjective demands from stakeholders or peer behavior and that companies will attempt to lever an environmental system, rather than satisfy a group of people. 

3. Business Transformation By All 

Transform to Net Zero, which BSR helped to launch over the summer, points to a third plausible future of climate action. To build net zero value chains, companies will need to integrate climate goals into their corporate strategy and deploy corporate functions well beyond sustainability and operations. All businesses will need to transform. 

Net zero value chain targets imply that procurement teams will prefer that resilient, low carbon suppliers support them to decarbonize. Enterprise risk management and business continuity processes will integrate climate risks. Finance departments will ring-fence capital and establish new criteria for its deployment. Public affairs staff will add climate-favorable policies to its list of priority asks. Research and innovation departments will need to develop lower carbon or more resilient designs. Marketing campaigns will foster public support. Human resources will improve recruitment and retention through connection to climate purpose. And company leadership will set out a strategy and management structure befitting this effort. 

In this third future, businesses will transform into organizations directed against climate change and find climate action to be one of their main sources of business advantage. 

Which of these three plausible futures will become reality? When we carry out climate scenario analysis, we know that none of our scenarios depicts the actual future and that the future will be a combination of all of them. So it is with company climate action. Our task ahead is to build net zero value chains by transforming our businesses and deliver what science demands. What can your company do to take the next step? 

Blog | Wednesday March 31, 2021

Maritime Anti-Corruption Network Embarks on a New Journey

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When BSR talks about how business-driven collective action is necessary to achieve sustainable development goals, the Maritime Anti-Corruption Network (MACN) is often featured as an example of how collective actions can be structured and what they can achieve.

Founded in 2011 by a small group of committed maritime companies, MACN was set up as an industry-led initiative to fight corruption in the maritime value chain. When looking for a partner to help develop and grow the network, its founders turned to BSR, which agreed to support the development of MACN. Ten years on, the Network has demonstrated what is needed for a collective action campaign to really work in practice: for a dedicated group of professionals to agree on a pro-competitive approach to addressing a common issue that harms their companies and the communities that support them and then to work together over years to make change happen.  

As a result of collective action, MACN can demonstrate tangible outcomes globally, showing that it is possible to address systemic corruption by building strong alliances between the public and the private sector.

The success of MACN, both in terms of organizational expansion and operational effectiveness, has put the organization in a position where it can take on more ambitious initiatives. Today, BSR is proud to announce that MACN is prepared to take its next step: separating from BSR to become its own independent organization.

As a result of collective action, MACN can demonstrate tangible outcomes globally, showing that it is possible to address systemic corruption by building strong alliances between the public and the private sector.

We have been building towards this goal over several years, ensuring that MACN has a strong governance structure that enables its corporate participants to share oversight and responsibilities. MACN has grown over the years and now includes over 150 companies globally, over 50 percent of the maritime industry, and is recognized as one of the preeminent examples of collective action in the fight against corruption.

As an example, MACN’s work in Argentina is a prime example of how collaboration can lead to effective change. In partnership with local authorities, industry players, and business associations, MACN pursued a collective action which resulted in the successful adoption of a new regulatory framework for dry bulk shipping. MACN members experienced a 90-percent drop in corrupt demands in the ports included in MACN’s project.

By building a strong coalition of both international and national stakeholders, MACN and its partners put in place an inspections system in line with international standards, balancing the government’s responsibility to ensure the cleanliness of vessels exporting agricultural products with the conditions necessary for integrity in the context of foreign trade relations. MACN has played a key role in facilitating collaboration between the stakeholders, in translating new regulatory requirements into practices, and in promoting behavioral change among industry players and inspectors through training and practical guidelines. 

Partnering with donor organizations, including Danida and Siemens' Integrity Initiative, has also played a key role in increasing MACN’s impact through grant-funded in-country collective action initiatives focusing on tackling corruption in ports in Nigeria. This support has allowed MACN to deepen the engagement with government agencies in the ports and to launch new innovative solutions that empower the industry to resist and report corruption, such as the MACN Anti-Corruption HelpDesk in Nigeria. Functions like the HelpDesk greatly improve the long-term viability and effectiveness of collective action initiatives. They are a critical step in formalizing local efforts to reduce and eliminate corruption—especially if they are set up with government support.

As in any "leaving home" scenario, we are both sad and immensely proud that MACN has developed and grown to the extent where the transition into a stand-alone entity is possible. The future is exciting in terms of geographic expansion, operational leadership, official recognition, and donor support. BSR is very proud to have helped build something quite special here, and we encourage members of the wider maritime supply chain to join MACN.

MACN is registered as a not-for-profit member organization in Denmark and will be led by CEO Cecilia Müller Torbrand and governed by a board comprised of MACN members. Vivek Menon and Martin Benderson, who have also worked with MACN, will join the entity.