Blog | Wednesday October 12, 2022

The Supply Chain Risk You Didn’t Know About: Navigating Responsible Sourcing in AI

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Every Company Is a Technology Company

It’s no secret that Artificial Intelligence (AI) is transforming business, and it’s doing so well beyond the boundaries of traditional technology sector companies. Five years ago, 71 percent of Fortune 500 CEOs agreed that “these days, their company is a tech company,” and 81 percent identified AI and Machine Learning (ML) as an “important” technology for investment.

This trend has only grown, with corporate AI adoption further accelerated by the pandemic and more companies utilizing AI beyond the enablement of efficient business processes to fuel the creation of new business models, products, and services.

While the proliferation of AI creates significant opportunity for business and society, it also surfaces several social justice and human rights issues, which includes an often-overlooked but significant labor risk in the AI supply chain.

Protecting the Rights of the Invisible Workforce

Considering that AI often replaces and nearly always transforms tasks previously performed by humans, it’s often assumed that labor risks may be reduced or eliminated. However, Machine Learning (ML) depends on a large workforce performing essential tasks of data enrichment—including cleaning, labeling, and moderating the vast troves of unstructured data—that make ML and the plethora of products and services it enables technically and commercially viable.

While crucial to AI/ML development processes, data enrichment workers are an invisible workforce, most often crowdsourced via third-party platforms and contracted with few to no labor protections. They are likely to earn subminimum wages due to typical risks and costs of employment outsourced to the individual, and little to no ability to file a complaint and access the right support.

Regulatory and private-sector approaches—where they exist—are insufficient, geographically disparate, and haven’t kept pace with the rate at which the sector is expanding globally. While failure to pay closer attention to this growing workforce and their precarious work conditions could become the next big supply chain emergency, thoughtful and collaborative approaches can protect and even promote human rights for data enrichment workers.

Taking Individual Corporate Action

Recently, BSR and Partnership on AI (PAI) joined forces to identify opportunities for industry and sector collaboration on responsible sourcing for data enrichment.

Our key findings indicate that individual corporate awareness and good practice are still nascent and require action in the near term to establish a foundation for shared learning and ultimately scale up to effective collaborative efforts in the future.

Here are key steps companies can take to assess and address potential issues through individual action:

• Raise internal awareness. Human rights and responsible sourcing professionals should understand if and how their company sources data enrichment services. Engage with technologists in relevant business units and product teams to understand processes for sourcing enriched data, including whether teams are sourcing directly via platforms or through vendors. Determine risk and identify steps that may need to be taken in line with existing human rights and responsible sourcing approaches.
• Assess existing AI sourcing partnerships. Teams that source enriched data directly via platforms can familiarize themselves with the Fairwork Cloudwork Principles and check the Cloudwork ratings to learn how these platforms are performing. Companies that source enriched data via a third party and those that source enterprise AI as a service should ask their providers how they’re managing responsible sourcing for their data enrichment and affirm that this issue is important to you as a client.
• Aim to engage and improve conditions, not retreat. Digitally distributed work has created new economic opportunities, including for many who were previously excluded from traditional work opportunities due to discrimination, caregiving responsibilities, and geographic location, among other reasons. Companies should not seek to eliminate this type of work from their supply chain, but rather engage and partner with suppliers and the sector to ensure labor rights are respected and that working conditions enable data enrichment professionals to thrive and advance in the field they help to build.
• Help decision-makers take an informed approach. Teams that develop AI/ML internally are likely to source data enrichment services to support their models. They can leverage PAI’s whitepaper on Responsible Sourcing of Data Enrichment Services to understand and inform decisions they’re making throughout the sourcing process that impact working conditions.
• Pilot responsible approaches and share learnings. Given the field’s nascent stage in formalizing responsible sourcing practices, thoughtfully planned pilots will help put existing recommendations to the test. Sharing learnings from pilots can help prove the feasibility and value of adopting responsible sourcing practices. Companies interested in demonstrating leadership in piloting approaches laid out in PAI’s paper are invited to contact PAI directly.
• Track opportunities for collective action. We know that fully addressing these labor risks at scale will require industry or sector collaboration. As we learn more about what companies are well-placed to address through piloting and individual approaches, we will also learn more about where collaboration is necessary for meaningful impact.

We invite business to bring their insights and ideas from these experiences to BSR’s Collaboration IDEAS Process, where we incubate game-changing collaborations. 

Partnership on AI is a non-profit partnership of academic, civil society, industry, and media organizations creating solutions so that AI advances positive outcomes for people and society.

Blog | Thursday July 7, 2022

What Business Needs to Know about the EU Corporate Sustainability Reporting Directive

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In the fast-changing landscape of sustainability reporting, the EU emerges as a front-runner. And in doing so, it is making a crucial impact not only in Europe but across the world. The EU has set an ambitious path to reorient capital flows toward a sustainable economy while avoiding greenwashing, and it has introduced far-reaching legislation, such as the Sustainable Finance Disclosure Regulation and the EU Taxonomy. To support the EU’s goals, investors need quality and comparable data from companies.

This is where the Corporate Sustainability Reporting Directive (CSRD) proposal comes in.

After a year of negotiations, the EU Council and EU Parliament reached a provisional agreement on June 30. The CSRD is set to replace the Non-Financial Reporting Directive (NFRD). The name change is welcome, highlighting that sustainability topics are also financial topics rather than opposed to them. Ultimately, sustainability information should be considered as important as financial information.

The CSRD is not just about meeting investor needs. It will also enable civil society organizations, trade unions, and other stakeholders to assess companies’ impacts on society and the environment.

Here are six points that businesses should know about the CSRD:

1. More companies will be covered by the CSRD than the NFRD.

All large companies governed by the law of or established in an EU member state and all European stock exchange-listed companies (except micro-companies), as well as small and medium-sized enterprises (SMEs), are under the scope of the new directive.  

A large company is defined as meeting two out three of the following criteria: (1) EUR€40 million in net turnover, (2) EUR€20 million on the balance sheet, and (3) 250 or more employees.

Companies that are not established in the EU but have securities on EU-regulated markets are also in scope.

For non-European companies, the requirement to report sustainability disclosures applies to all companies generating a net turnover of EUR€150 million in the EU and which have at least one subsidiary or branch in the EU.

2. The CSRD proposal applies double materiality.

Double materiality means that businesses must not only disclose how sustainability issues can affect the company ("impacts inward") but also how the company impacts society and the environment ("impacts outward"). For businesses that have historically assessed only risks to their business rather than their impacts on the world, the CSRD implies a fundamental shift in measurement and reporting.

3. Companies will need to report according to new EU sustainability reporting standards.

The European Commission has commissioned the European Financial Reporting Advisory Group (EFRAG) to develop EU sustainability reporting standards (ESRS). The standards will be mandatory for large companies. EFRAG released a draft for public comment in April. BSR encourages its members and the general public to provide feedback on the exposure drafts ahead of the August 8 deadline.

The standards seek to align to the extent possible with global standard-setting initiatives such as GRI and the ISSB Standards, but they also aim to link other EU legislation and initiatives, such as the Sustainable Finance Disclosure Regulation, the EU Taxonomy, among others.

SMEs and non-EU companies will have separate standards.

4. Third-party assurance of the data will be mandatory.

Businesses will be required to seek "limited" assurance of the sustainability information by a statutory auditor. Individual member states may choose to allow other independent assurance service providers (IASP) or non-statutory financial auditors to perform the assurance. Although "limited" assurance still requires an auditor to evaluate the information, it falls short of what is required for the financial audit statement. The EU Commission will adopt standards for "reasonable" assurance by October 2028, which is a more demanding assurance process. 

5. Sustainability information must be included in the management report and digitally tagged.

Companies will need to report sustainability information in a dedicated section of the management report rather than in a separate report (i.e., a standalone sustainability report). This means that financial and sustainability information will be published at the same time and that the administrative, management, and supervisory bodies will be accountable for this reporting. Companies will also need to digitally tag sustainability information so that it can be fed into the European single access point database.

When it comes to reporting at a consolidated level versus entity level, the subsidiary exemption will not apply in the case where the subsidiary is listed on an EU stock exchange.  

6. CSRD application will be phased in.

The European Commission plans to adopt the final text of the CSRD in late 2022, after which member states will have 18 months to translate the directive into local law. The first companies that will need to comply to the Directive are companies that are currently within scope of the NFRD. They will need to report in 2025 based on fiscal year (FY) 2024 data.

• August 8, 2022: The public consultation of the sector-agnostic ESRS ends.
• November 2022: EFRAG proposes sector-agnostic standards to the EU Commission.
• June 2023: The EU Commission adopts sector-agnostic standards through delegated acts.
• January 1, 2024: The CSRD will come into force. Companies already in scope of the NFRD will need to report in 2025 based on FY 2024 information.
• June 2024: The EU Commission will adopt sector-specific standards, standards for listed SMEs, and standards for non-EU companies.
• January 1, 2025: Other large companies need to report in 2026 based on FY 2025 information.
• January 1, 2026: Listed SMEs need to report in 2027 based on FY 2026 information.
• January 1, 2028: Non-EU companies in scope will need to report in 2029 based on FY 2028 information. 

The ESRS standards developed via the CSRD will create a baseline for decision-useful information to both investors and stakeholders at large, and the sustainability reporting standards can both increase the impact of disclosure and reduce the burden of reporting on companies.

At BSR, we have supported greater harmonization and clarity in the field of sustainability reporting for a long time. Competing standards and diverging requests for sustainability information from stakeholders have created an unreasonable burden and reporting fatigue for companies, hindering the effectiveness and impact of reporting. We will continue to push for progress on that front, building on the leadership displayed by the EU.

It is essential that the evolution of these standards reflects the voice of report preparers, so we encourage companies to play an active part in the EU sustainability reporting standard-setting process.  If you would like to discuss this topic further, please reach out to our Future of Reporting collaborative initiative.

Blog | Wednesday July 2, 2025

A Renewed Approach to Sustainability: Five Building Blocks for Business

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As we reach the midway point of 2025, we’re experiencing yet another year of profound change for the world of business. At the start of the year, I laid out Ten Big Questions Facing Sustainable Business Leaders in 2025. Few of these questions have been answered definitively—and in fact, even more questions have emerged. 

Some answers, however, have come to the forefront and can help to guide sustainable business leaders as we continue to navigate an extended period of ongoing and intense change. 

Despite the uncertainty, some important clarity is emerging about how to reposition sustainability, not only to survive amidst challenge, but also to provide a path forward for business more generally. Through discussions with my BSR colleagues, our member companies, and the wider community, a picture of how to move forward is becoming clear:   

• Sustainable business priorities, and the supporting narrative, need to change and put people more firmly in the frame. The political and policy pushback against sustainability in many parts of the world is happening because our agenda does not resonate with the general public and is subject to political attacks, which often distort what sustainable business is actually about. The finer points of net zero are no match for rising energy bills. Commitments to diversity can easily be caricatured at a time when people are experiencing anxiety about their jobs, and rising generations have little hope that they will live better than their parents. 2025 may be remembered as the year that we “changed the sustainability narrative” and reclaimed the argument that sustainability delivers human progress. This will only work if people are put front and center, if we use language that real people use, and if we address peoples’ needs in 2025, not 2030, let alone 2050. In September, BSR will publish a reframing of the sustainable business agenda, and we hope that provides both inspiration and an invitation to dialogue. We invite you to subscribe to BSR’s newsletter to stay informed. 

• The sustainable business community needs to be more fully prepared for the coming AI revolution. It seems clear from interactions with our member companies that it is very early days when it comes to making sense of how AI will shape, and likely define, the next phase of sustainable business. Four key questions will come to define how well—and how responsibly—companies are deploying AI. First, and building on extensive work BSR has conducted with member companies in the tech sector and beyond: is AI being deployed in a way that respects human rights and privacy? Second, will companies ensure that the energy needed to support growth in AI does not produce a U-turn on emissions, and will companies capture the potential for AI to reduce emissions and nature loss? Third, how can companies deploy AI in a way that does not lead to the massive job loss that Anthropic CEO Dario Amodei is predicting? Finally, will companies make better use of AI for managing their sustainability actions, for example by automating data collection and communication? BSR will continue to offer ways for companies to understand and act upon both the opportunities and dilemmas presented by AI. 

• Resilience is growing more important by the day and should be a higher priority for companies. Even as the drive to keep emissions under control remains crucial, resilience will be increasingly important. This is a close cousin of traditional enterprise risk management and business continuity. A robust approach to resilience—which very few companies have yet embraced in a comprehensive way—will be considerably more important for the foreseeable future. There are aspects of resilience that play to the unique strengths of sustainable business leaders. A strong approach to resilience depends on collaboration, foresight, understanding of stakeholder views, and a synthesis of social and environmental and policy matters. All this provides an important pathway to reinforcing and reconceptualizing the business value of sustainability, and it also speaks to very clear and present needs of people and communities. By emphasizing foundations of strong sustainability governance through thoughtful leadership and strategic oversight, companies will be better positioned to navigate turbulence, build resilience, and create long-term value.

• The relative pullback of regulation is an opportunity to refocus on building rather than complying. The steady advance and convergence of sustainability regulation has largely stalled, and in some places, gone into reverse. On balance, this is an unfortunate development, as we lose—for now—some of the clarity and consistency that was driving some forms of action. This period, though, also provides some benefits. We hope that the resources that were dedicated to validating data can be directed back to achieving the progress that the data represented. We also know that compliance creates a floor for companies, but has never been the real driver of sustainability, innovation, or partnership, let alone an ambitious vision. Let us take advantage of this period to recommit to the creative, forward-looking mindset that has always been the best of sustainable business.    

• The business voice, while currently muted, needs to be heard. Finally, despite many evident risks in a challenging political environment, it is time for business to speak up loudly and clearly, and use its influence. If we were to rank the top ten sustainability clichés for 2025, “we are still taking action, we’re just not talking about it” would be at the top of the list. The business voice has been stilled. We know from speaking with many of our members that this has confused, and at times enraged, employees. If policymakers are hearing only from ideological opponents of sustainable business, we will not create the policies we need. And if business leaders do not regain their footing when it comes to advocating for rule of law, open societies, and respect for people, the business environment will degrade. So yes, consider carefully how to speak publicly, but not whether to do so. 

While we don’t yet have clear answers to the 10 questions we posed at the start of the year, we do see five building blocks to a remade approach to sustainable business that will meet the present moment and convey value for business, people, and communities. Sustainable business is on the right side of history. If we look back in 2030 and see that we took up today’s challenges to reinforce value, reorient priorities, and refresh our narrative, we will have made the most of this moment.  

Blog | Tuesday January 12, 2021

2021: Optimism and Resolve for the Decisive Decade

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Barely a week after the world began to put 2020—and its long list of challenges, disruptions, and heartache—in the rearview mirror with some cautious optimism, an attack on American democracy has shaken the world, leaving many of us anxiously pondering whether 2021 will just be more of the same.

But as disruptive as 2020 was, and as troubling as our first week of 2021 has been, we cannot afford to lose sight of the deeper structural changes that not only continue to reshape our world, but also continue to accelerate. We opened 2020 by talking about the “decisive decade” and the need to make the vision of the Sustainable Development Goals a reality. Much has changed in the last year. That objective has not.

Indeed, it is clearer than ever that sustainable business is both a core driver of strategic advantage and an essential pathway to a just and sustainable—and resilient—world. It is time to turn from responding to unexpected disruptions to the solutions needed to create an economy that delivers truly inclusive and sustainable prosperity.

Multiple forces are converging to make sustainability a higher priority for business and the world. We know from the past year that investors are deploying capital to companies with serious plans to address climate and other core sustainability objectives. Social acceptance of new technologies and business models—including the changing nature of work itself—is more important than ever. Long-standing structural discrimination must be dismantled, not only in business but in the societies in which business operates. And, at a time when global poverty has grown for the first time in decades, when income inequality has increased, and where structural changes to the economy have displaced many people, it is essential that business generates economic opportunity where it is most needed.

We called on business throughout 2020 to “meet the moment and build the future.” This call to action remains essential for successful business, thriving societies, and a healthy natural environment.

As we turn to this new year, it is time to turn ambition to action, enabling our member companies to meet both business and sustainability objectives. In the year ahead, we will be focusing on three broad areas: (1) business transformation to meet ESG objectives, (2) decisive climate action to translate commitments into real change, and (3) creating an economy that is truly inclusive.

Business Transformation to Meet ESG Objectives

Business transformation is essential to meet the challenges of the decisive decade. We are working with our members to establish resilient business strategies with ambitious sustainability goals and, crucially, the actions needed to make these objectives a reality. These times also demand fundamental change. To that end, we are also working with companies to help build a 21^st-century social contract based on principles that deliver long-term value for all stakeholders, economic and social mobility and security, climate justice, and the development of new technologies based on human rights principles, all based on principles of diversity, equity, and inclusion. All these efforts are supported by foresight from our Sustainable Futures Lab, which enables companies to position themselves to anticipate and shape change in tumultuous times.

Decisive Climate Action to Translate Commitments into Real Change

On climate, 2021 will be a year in which business action pivots more decisively from ambition to action. BSR’s offerings will support this shift in three high-impact areas. We will work with companies to build resilience to climate risks and their social impacts through effective implementation of the Task Force on Climate-Related Financial Disclosures (TCFD), including scenarios to guide decision-making. We will ramp up our efforts to drive Scope 3 emissions reductions through collaborations like Transform to Net Zero and one-on-one projects with our members. And in 2021, we will create a global green freight platform that harmonizes disparate collaborations under a singular compelling program, solidifying BSR’s position as the global leader in clean freight. We will also continue to work as a proud coalition partner in We Mean Business, to help the business community speak with a powerful, unified voice in support of decisive climate action and policy.

Creating an Economy That Is Truly Inclusive

People are at the center of all BSR efforts to help companies build back better and create a more inclusive economy. In 2021, BSR will help to shape the next decade of the business and human rights agenda, including numerous efforts to work with companies in multiple sectors to ensure that new technologies and business models are built on a foundation of respect for human rights. We are actively committed to defining a vision for business leadership on DEI and to ensuring that the spate of commitments made in 2020 results in systemic, lasting change. We continue to work through HERproject and other efforts to ensure that workers—especially women—in supply chains, who have been hit so hard by COVID-19, can thrive and access livelihoods essential to their well-being.

Indeed, it is clearer than ever that sustainable business is both a core driver of strategic advantage and an essential pathway to a just and sustainable—and resilient—world.

We hope this agenda is as ambitious as our times demand. We are pursuing many other efforts with you so that we can make 2021 a year of accelerated achievement—and we welcome your continued engagement to make this vision a reality.

Last year created great pain and disruption. Saying otherwise would be insensitive in the extreme. But the experiences and impacts of 2020 also provide reasons for optimism and resolve.

As we undertake these activities, we are confident that businesses embracing this agenda will not only position themselves to thrive amidst great change, but they will also deliver the kind of solutions and opportunity that are essential for human progress. We invite you to join us in this effort, as we work with you to generate resilient business strategies that truly meet the moment and build the future. 

Blog | Friday January 17, 2020

Davos 2020: Progress in a Time of Turmoil?

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The 2020s dawn with the 50th Annual Meeting of the World Economic Forum (WEF) in Davos, which calls for a cohesive and sustainable world. This first Davos meeting of the “Decisive Decade,” however, comes amid a world in turmoil.

U.S. President Donald Trump returns to Davos just as his impeachment trial opens in Washington. Meanwhile, U.K. Prime Minister Boris Johnson is proclaiming loudly that he wants to achieve a breakthrough as the host of COP26 but has mandated that his government boycott Davos, forfeiting the chance to lobby for climate action in the name of “Getting Brexit Done.” The governments of France and China face challenges to their leadership on the streets of Paris and Hong Kong. Australia continues to suffer horrific wildfires, and Jakarta has suffered monumental floods.

All this means that the new decade has arrived at a time when the global community (if such a thing can even be said to exist right now) is at a crossroads. The need to achieve genuinely shared prosperity and decisive climate action has never been clearer, nor has the science, which is increasingly driving policies and action on climate action and biodiversity. Indeed, the WEF’s latest Global Risks Report, released this week, unprecedentedly cites environmental issues as the top five risks in the world. Peoples’ movements and political figures are calling—ever more loudly—for a fairer economy to reverse growing inequality. And people in the streets are—quite rightly—standing up for the protection of democratic principles that have come under increasing threat.

The need to achieve genuinely shared prosperity and decisive climate action has never been clearer, nor has the science, which is increasingly driving policies and action on climate action and biodiversity.

The answer to this disquiet is found in the following shared goals that broadly reflect the aspirations of the Sustainable Development Goals. And the need for business leaders to recommit to these objectives is more compelling than ever. Entering Davos Week 2020, there is clearly a new climate for business. To face it successfully, here is the agenda that all the leaders who are making the journey should embrace:

• More widely shared prosperity: Markets are trusted less and less each year. Younger Americans are expressing rising support for socialism. There are many reasons for this, but it all boils down to growing concerns about extreme wealth at the top and diminishing opportunities in the middle and lower ends of the economic scale. When the public loses faith in basic economic fairness, no matter what statistics say, change will be demanded. New social contracts are needed to ensure that societies progress together, and fairly.
• Net zero carbon: The number of nations, states, and cities—along with businesses—that have committed to net zero carbon by mid-century is growing fast. Our collective task is to expand these commitments and even more so, translate them into lasting change in the “real economy.” This will achieve more than any COP can.
• Technologies aligned with human rights and ethics: The 2020s will not see technology maximize its benefit to society without greater trust. Something akin to the concept of the precautionary principle applied to old technologies should become the new normal. This may slow the rollout of some ideas and business models, but it will lead to more lasting innovation that society actually supports.
• Women’s empowerment: The fact is that the #MeToo movement risks being left behind as new ideas and crises emerge. This would be a tragic mistake. The 2010s erased any doubt about the unequal treatment of women in business. The 2020s need to be a time when more women are CEOs and Directors, pay equity becomes a reality, and all women are able to pursue opportunities to contribute in all fields the same way men are.
• Support for open societies: Finally, business cannot stand aside while the principles on which open societies are based are being attacked. CEOs are reluctant to step into “political” issues, but there is a clear need for basic civil liberties to be supported. Business depends on stable operating environments to succeed, including the rule of law, fair treatment of all people, the protection of democratic processes, and the protection of global human rights. There is risk involved in supporting these bedrock principles…but there is more risk is allowing them to vanish.

As we pointed out in our Doing Business in 2030 scenarios, the road ahead likely will be marked by increased decentralization of power and influence. While Davos may be an example of the abiding influence of the most powerful, the world away from the Magic Mountain is increasingly influenced by a diverse array of actors.

What the world so urgently needs is action, with far more commitment than we have seen in the half century since Davos launched.

Stakeholder capitalism is embedded into the program at Davos this year—that’s fantastic. The latest “Larry Fink Letter” on the eve of Davos signals that capital markets are moving faster to meet the challenge. But this more equitable and sustainable vision of capitalism must be more than a theme, a process, or a matter of talk. It needs to reflect a seriousness of purpose and a commitment to an agenda that resonates not only in Davos but in the places where people believe that Davos Man (and increasingly, Woman) are ignoring their needs.

The stakeholder model advanced 50 years ago by Forum Founder and Executive Chairman Klaus Schwab is the right one. Making it work in a fragmenting world is no small thing. Davos often frames global debates, and that is no small thing, though conference themes come and go. What the world so urgently needs is action, with far more commitment than we have seen in the half century since Davos launched. If we are to achieve human progress—and avoid exacerbating the turmoil that greets the 2020s—over the course of the coming decade, we have no choice.  And the prize—truly shared prosperity that averts climate crisis—should be all the motivation we need.

Blog | Tuesday March 8, 2022

International Women’s Day: Business Trends and Opportunities

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I asked Kalpona Akter, a workers’ rights advocate who started working in the Bangladeshi garment industry at the age of 12, about the state of business and gender equality. As we enter the third year of the pandemic, has business done its part in supporting women who make up the majority of workers in her industry?

Akter replied: “We are not on a positive track. This pandemic has shown the draconian side of business. Many companies make payments through charity instead of paying workers what they are due: a living wage.”

Akter is not the only one to identify a lack of progress on gender equality. In the context of the pandemic, the World Economic Forum’s Global Gender Gap Report announced that it will take another generation to achieve gender parity, as closing the gender gap has moved from 99.5 years to 135.6 years.

McKinsey’s Women in the Workplace report last fall pointed to an increase of women in American-based companies taking on leadership roles—although these gains do not extend to women of color, who continue to be underrepresented at every stage of the pipeline. Despite this progress, all women are facing much higher levels of burnout than men, and many consider stepping back or dropping out of the workforce. Part of this is due to women, and particularly women of color, taking on additional work, looking after colleagues’ well-being, and building more inclusive workplaces—efforts that often go unrecognized and unrewarded.

BSR’s Women’s Empowerment Trends Report, developed with the UNGC, likewise points to limited progress in companies making meaningful changes to improve gender equality—and those changes we saw were often limited to commitment making rather than action implemented.

The fundamentals of how business can promote gender equality remain relevant and require sustained attention: removing bias from hiring and advancement practices, ensuring living incomes, workers’ rights, representation—especially for vulnerable groups—and considering how business decisions affect groups differently. Beyond the usual debate, what are the trends in the gender space that business leaders need to pay attention to this year? Where are opportunities for business to do better?

Stepping up on Care

By now, there’s much more recognition that invisible work, including caring for family members, the sick, children, and domestic tasks—work that is primarily completed by women—is essential to keeping economies running. Yet the disproportionate share of domestic work that women take on forms a barrier to their full participation in the paid workforce and is a primary obstacle to gender equality, as a new 17-country study from our friends at Women Deliver shows.

Global companies have taken steps to support employees, increasing flexibility and ability to work from home, providing more paid leave, supporting parents and caregivers for both women and men. These initiatives will be even more critical to attract and retain talent in 2022 and beyond. While there is no “one-size-fits-all” approach to flexibility in the workplace, listening to what employees value and being willing to experiment and adapt are important. Companies must also keep tracking data on the pipeline and ensure that policies don’t have negative consequences on individuals.

Tackling Gender-Based Violence

A rise in gender-based violence has formed a shadow pandemic that is characteristic of lockdowns, increased insecurity and stress within households, and reduced access to support services. With regards to global supply chains, increased production pressure and uncertainty contribute to a high-stress environment with greater risk for abusive behavior from managers.

A commitment to ending gender-based violence is critical, and taking action to address this within internal operations is a start. Companies can also demonstrate support for the ILO’s Convention 190 on eliminating violence and harassment in the world of work. Partnering with local organizations or collaborations such as Empower@Work is one way for companies to translate commitments to actionable measures to prevent and respond to gender-based violence in the supply chain.

Preparing for the Jobs of Tomorrow

Across sectors, the nature of work is in flux, and women stand to be left behind with the rise of new technology and digitalization, the emergence of jobs tackling the climate crisis, and other disruptive change. For example, the green gender gap, referring to the gap in skills addressing environmental sustainability, has not improved since 2015.

Companies can make sure that women have equitable access to upskilling and reskilling opportunities and combat occupational segregation that keeps women out of jobs traditionally held by men. Improving technical competencies and upskilling workers in the face of new automated technologies, for example, will be important in sectors such as manufacturing and services. Research indicates a combination of decision-making and soft skills are necessary alongside technical competencies, and an intentional approach to include women and underrepresented groups is key.

This International Women’s Day, the basics remain true, and business must remain committed to ensuring equal opportunities for women as employees, business partners, and community members. Akter reminds us that real action addressing issues that matter most to women, such as wages, should remain the focus. As we begin the third year of the pandemic, three areas require urgent investment from companies: addressing unpaid work and care, combating gender-based violence, and preparing for future jobs. We invite companies to reach out and engage on these important topics when considering how business can push for progress on gender equality.

Blog | Monday April 29, 2019

Why 2019 Is the Year of Stakeholder Trust

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In 2019, the question of how to build and retain trust—among investors, regulators, customers, suppliers, civil society organizations, and the general public—is the most pressing challenge facing business.

The stakes have never been higher. The average tenure of a business on the S&P 500 shrank from 33 years in 1964 to 24 years in 2016 and is forecast to last a mere 12 years by 2027. Competition, innovation, and technological disruption, while important drivers, tell only part of the story. If a business is not trusted by its stakeholders, it will not be able to maintain revenue, let alone grow, and may soon find its very existence imperiled.

To make matters even more challenging, societies worldwide are experiencing a crisis of leadership and trust in institutions across government, business, and the media. Hyper-transparency, geopolitics, social inequalities, and the increasing fragility of global governance mechanisms are all contributing factors. Businesses must now navigate an increasingly fraught external environment via a combination of firm core principles and imaginative new approaches.

In 2011, BSR published a five-step guide to stakeholder engagement in response to requests from companies for practical guidance on how to navigate the tricky topic of identifying, interacting with, and responding to external voices. The appetite for this topic has been insatiable: the 2011 report has consistently ranked among BSR’s top five most-viewed reports since its publication. And as effective engagement with society continues to be a topic of enormous, ongoing interest, we have just released an updated version of our report to account for major developments over the last eight years that have made the stakes higher than ever.

Why is stakeholder trust so important today?

First, an exponential increase in transparency means that companies must behave as if everything they say or do might become public.

Information becomes available at an ever-accelerating pace. While it is still disseminated primarily on dominant technology platforms, our understanding of facts and truth is far more contested and diffuse. Public concern over social and environmental issues can escalate rapidly on social media (ocean plastics are a recent example) and hyper-local conflicts between business and communities can generate global reputational crises.

Employees are also emerging as one of a company’s most vocal, empowered stakeholder groups; they increasingly invite wider, deeper scrutiny of their employers via media interviews, data leaks, petitions, and even walkouts.

Contractual confidentiality clauses are no longer an effective way to manage this new dynamic: The boundary between the corporation and society has grown permeable. Companies need to embrace strategies that make transparency, timeliness, and accountability core operating principles while bearing in mind that workers may view their social responsibilities as more urgent and compelling than their employers’ short-term profit targets.

Evidence signals that consideration of environmental, social, and governance issues is highly correlated with corporate performance over the long term.

Second, even big investors are declaring that an exclusive focus on company interests has become counter-productive.

BlackRock CEO Larry Fink made a pressing case for strategic stakeholder engagement in his 2019 annual letter, noting: “Companies that fulfill their purpose and responsibilities to stakeholders reap rewards over the long-term. Companies that ignore them stumble and fail. This dynamic is becoming increasingly apparent as the public holds companies to more exacting standards. And it will continue to accelerate as millennials—who today represent 35 percent of the workforce—express new expectations of the companies they work for, buy from, and invest in.”

This quote reflects a broader shift in investor sentiment. Evidence signals that consideration of environmental, social, and governance issues is highly correlated with corporate performance over the long term. Companies that rely on one-way, PR-led approaches to manage these issues will not thrive. Fink’s challenge necessitates a robust engagement strategy in which companies determine how to weigh and balance a broadening array of overlapping and conflicting interests in a transparent and defensible way.

Finally, companies in 2011 primarily understood stakeholder engagement as a way to understand and manage reputational risk.

A key question in any mapping exercise was “Can we trust the stakeholder?” Today, it is usually more important to ask: “Can the stakeholder trust us?” The development of international frameworks that shape sustainability efforts, most notably the UN Guiding Principles on Human Rights, has driven a shift in emphasis toward corporate impacts on society and away from self-interested risk considerations.

We have substantively updated our framework to reflect these developments, emphasizing such new stakeholder mapping criteria as vulnerability, developing a new set of core engagement principles, and shifting the focus away from one-way information-gathering and toward building mutual trust and understanding. We have also considered stakeholder engagement in the context of new business models such as digital platforms, wherein companies face billions of stakeholders and can have an unprecedented impact on their lives.

Stakeholder engagement may seem more difficult and overwhelming than ever, but it needn’t be. Our updated report takes full account of how the world has changed while maintaining our original focus on practicality and clarity. BSR’s goal is to help companies build a deeper understanding of the social systems in which they operate—and to help them develop purposeful direction in pursuing their own goal of building sustainable trust.

Blog | Friday September 15, 2017

Where BSR Will Be During the UN General Assembly and Climate Week NYC

Preview

This week and next, major events are underway in New York around the UN General Assembly (September 12-25): Climate Week NYC (September 18-24) and Global Goals Week (September 16-23).

BSR staff will participate in these events associated with the Sustainable Development Goals (SDGs), as we work with the private sector and other partners to build inclusive prosperity and climate resilience, leadership, and action.

The following members of our team will be on the ground in New York City—follow them on Twitter for their take on what’s happening:

• President and CEO, Aron Cramer (@aroncramer)
• Senior Vice President, Laura Gitman (@lauragitman)
• Managing Director, John Hodges
• Managing Director, Consumer Sectors, Elisa Niemtzow (@ElisaN)
• Director, Jeffrey Crawford (@JeffCrawford79)
• Director, Women’s Empowerment, Aditi Mohapatra (@AditiMohapatra)
• Director, Healthcare, Dorje Mundle (@dorjemundle)
• Director, Sustainable Futures Lab, Jacob Park (@JacobPark)
• Director, Sustainability Management, Alison Taylor (@FollowAlisonT)
• Director, Climate Change, David Wei (@ClimateWei)
• Associate Director, Chhavi Ghuliani (@cghuliani)
• Associate Director, David Korngold
• Associate Director, Consumer Sectors, Jorgette Mariñez (@JorgetteBSR)
• Associate Director, Inclusive Economy, Susan Winterberg (@susanwinterberg)
• Manager, Byron Austin (@byronaustinCSR)
• Manager, Sara Enright (@sgenright)
• Manager, Jonathan Morris (@tweetmorris)
• Manager, Meghan Ryan (@MeghanClareRyan)
• Associate, Katie Abbott (@kaabbott)
• Associate, Shubha Chandra
• Associate, Martin Lemos (@martineieio) 

We will update this post throughout the week with new information about BSR’s participation, so check back for the latest.

What We’re Hosting

• September 18: BSR is a partner of Business Fights Poverty: Rethinking Collaboration for the SDGs. Gitman will speak and Enright will attend.
• September 19: BSR will host the Responsible Retail Symposium, a one-day event that will offer participants a perspective on the current state and future ambitions of sustainable business practices in the U.S. retail industry. Cramer, Niemtzow, Winterberg, Mariñez, and other members of BSR’s consumer sectors team will attend.

What We're Attending

• September 17: Morris will attend the Social Good Summit, hosted by Mashable.
• September 17: Park and Winterberg will attend the MIT Solve Challenge Finals.
• September 18: Mohapatra will attend a breakfast hosted by Women Deliver and the other Deliver for Good partners.
• September 18: Mohapatra will attend the session “Behind Every Global Goal: Women Leading the World to 2030,” hosted by the Business Commission, at the International Conference on Sustainable Development.
• September 18: Cramer will attend the Climate Week NYC 2017 Opening Ceremony.
• September 18: Mundle and Austin will attend an event on "Addressing Multiple Chronic Conditions."
• September 18: Cramer and Winterberg will attend a dinner for the World Economic Forum’s New Vision for Development Competition.
• September 18: Crawford will attend Business for the SDGs: Innovation, Technology, and Connectivity for a Better Future for All, hosted at the UN Headquarters.
• September 18: Ryan will attend Modern Slavery in the Americas: From Here to Elimination, hosted by the Business and Human Rights Resource Centre.
• September 18: Abbott will attend Building Ambition to 2050: Taking Action Toward 100% Net Zero Carbon Buildings, hosted by The Climate Group.
• September 18: Wei will attend Bold Solutions: How Innovation and Creativity Are Tackling Climate Change, hosted by Purpose.
• September 18: Cramer and Gitman will attend Nightcap at the Museum, hosted by the B Team.
• September 18: Cramer will attend a reception hosted by the Abraaj Group.
• September 18-19: Cramer will moderate a panel on inclusive innovation at the World Economic Forum Sustainable Development Impact Summit. Winterberg will also attend.
• September 18-19: Taylor will represent the Maritime Anti-Corruption Network and speak at the Concordia Annual Summit. She and Crawford will also attend the event "Toward a New Trust: Serving Public Interests through Transparency and Integrity," hosted by B Team.
• September 19: Hodges will attend a private consultation on corporate benchmarks for the SDGs, hosted by the UN Foundation.
• September 19: Wei will attend VELOCITY: Accelerating Climate Action, hosted by The Climate Group, Formula E, VICE Impact, and Spring Studios.
• September 19: Mundle will attend an event on "Shaping the Future of Health and Healthcare," hosted by the World Economic Forum.
• September 19: Cramer will attend a climate dinner hosted by California Governor Jerry Brown and the UN Foundation.
• September 19: Wei will attend a discussion on NDC enhancement.
• September 19: Mohapatra will attend a reception hosted by Women Deliver and the Government of Canada to build momentum for the next Women Deliver Conference.
• September 19: Mundle and Austin will attend a session on "Supporting Maternal Health During the Refugee Crisis."
• September 19: Chandra will attend the launch of the ILO’s Global Estimates of Modern Slavery and Child Labor.
• September 20: Morris will attend Tackling Climate Risk with Climate Action, hosted by MSCI.
• September 20: Mariñez will attend Going “All In” to Address Commodity-Driven Deforestation, hosted by the Tropical Forest Alliance 2020 and Forest Trends.
• September 20: Enright will attend a dinner hosted by Sustainia, DNV GL, and the UN Global Compact.
• September 20: Ghuliani will attend the Bill & Melinda Gates Foundation’s Goalkeepers event.
• September 20: Korngold will attend Business Solutions for the SDGs, organized by the UN Development Programme, Business Call to Action, and the UN Global Compact.
• September 20: Gitman will attend WE Day UN.
• September 20: Wei will attend an evening gathering of friends of We Mean Business.
• September 21: Cramer will attend the launch of the World Benchmarking Alliance, hosted by Aviva, the UN Foundation, and Index Initiative.
• September 21: Wei will attend Accelerating Ambitious Climate Policy Globally: The Role of Corporations, hosted by InfluenceMap.
• September 21: Mohapatra will attend the UN Global Compact Leaders Summit.
• September 21: Park will attend We the Future: Accelerating Sustainable Development Solutions, hosted by the Skoll Foundation, TED, and the UN Foundation.
• September 21: Taylor will attend Building an International Coalition against Corruption to Achieve the SDGs, hosted by the Danish Minister for Development Cooperation.

Blog | Tuesday April 25, 2017

Redefining Sustainable Business to Meet the Moment

Preview

In 2017, the year of BSR’s 25th anniversary, I have been reflecting on the confluence of three crucial trends that are redefining business: clarity about the goals for sustainable business, widespread disruption in business, and political volatility. In this context, sustainability provides a North Star that can be essential in creating resilient, innovative, forward-looking businesses.

To make this happen, it is time to redefine sustainable business with a new agenda, a new approach, and a new voice.

A New Agenda

Calling for a new agenda may seem odd when the world has embraced the Sustainable Development Goals (SDGs) as the path forward. In fact, there is no inconsistency, because to meet the objectives of the SDGs and the Paris Agreement, we must apply them in a new set of circumstances. In other words, the sustainability agenda has to change because the economic, business, and political situation is changing.

What does this mean in practice?

First, basic economic fairness should get more attention on the sustainability agenda. Our era’s widespread political volatility and lack of trust in business is the direct result of feelings of economic vulnerability among wide swaths of the population in the mature economies of the United States, Europe, and Japan. Business needs to provide an answer, which can come from more attention to quality jobs in an era of automation, and taking on chronic concerns about executive pay. Without that, support for business and global trade will wither even further.

Second, it is also time to address head on new questions raised by new technologies. Our lives today are shaped by algorithms and more and more information stored in the cloud, which means that every company—not just the tech sector—should have policies on privacy and the fair application of big data.

Finally, action on climate needs to focus not only on staying well below 2°C of warming, but also in addressing the social and economic climate impacts we are experiencing today. Meeting the climate challenge means reductions in emissions, yes. But it also means fully embracing resilience strategies; understanding the intersection of climate and women’s empowerment; and unleashing new products, business models, and technologies that not only shift the world toward a low-carbon economy, but also create new jobs, new businesses, and lasting solutions to poverty reduction.

There are more ways the sustainability agenda can and should change, but these three areas deserve attention as we look ahead. If we don’t get jobs, the social impact of technology, and climate resilience right, the rest won’t matter.

A New Approach

Let’s face it, some elements of the sustainability playbook have grown stale. It’s time for companies to take a fresh look at how they report, engage with stakeholders, and manage supply chains. It has been inspiring to see many such efforts emerge, and at BSR we are excited about driving new thinking and new ways of working on those and other topics.

Chief Sustainability Officers have a golden opportunity to reimagine how to approach sustainability management. Many people like to say that the CSO’s goal should be to work herself out of a job. I disagree. Companies will continue to need a leader who understands the evolving intersection of business and society. And given the massive changes in culture, technology, and economics—coupled with the disruptions affecting every business—the CSO role is invaluable.

In 2025, the CSO will need to be an innovator, a futurist, a connector, and a revenue generator. Yes, the CSO will continue to look after stakeholder relations, rankings, and sustainability reports, but let’s recommit to the notion that those responsibilities are the means to an end, not the end in itself.

Achieving the ambitions expressed in the 2025 sustainability goals adopted by many companies requires strong leadership from within and beyond the sustainability function. The next 10 years, then, will need to see a strengthening of both the inside and the outside game of the sustainability function. We are already seeing signs that this is happening.

A New Voice

Our turbulent times also show how important it is for companies to act on the foundation of their values and principles. At a time when so many are advocating for walls between peoples, and questioning global trade and the free movement of people, it is essential that companies use their voice to reinforce the importance of the principles underlying their commitment to sustainability.

Companies that are taking decisive action on climate do so because they believe in climate science. Businesses that are applying the Guiding Principles on Business and Human Rights do so because they believe that all people, regardless of gender, race, nationality, or other characteristics deserve equal treatment and equal opportunity. Companies that are committing to the SDGs do so because they believe that poverty is both an economic and a moral challenge for us all. These principles—which are fundamental to social cohesion and stability—create a rules-based environment, which is central to business. They also enable global trade to function smoothly.

In the past year, we have also seen multiple examples of companies using their voice to promote and protect equality for the LGBTQI+ community, as well as support for immigrants and refugees, basic science, and, in some cases, transparency. This is promising. There is a lot of evidence that employees want to see the leaders of their companies express their values on these issues. And in a world in which the core values of open societies and fair, respectful treatment of people is under attack in locations across the globe, it is increasingly important.

Business has unique assets to bring to crucial public debates. Business also continues to face a trust deficit that can be addressed through statesmanship at a time when that is often in short supply in the public sector. Furthermore, business has a keen appreciation that big global goals are achieved through partnership, and during polarizing times, reinforcing the importance of collaboration is something that can resonate far beyond company walls.

Building a Better Future

The very concept of sustainability is based on a foundational belief that we are here to build a better future. In our era of immense change, that belief provides a sense of direction that will serve us well. And by embracing a new agenda, a new approach, and a new voice, sustainability will not only deliver a brighter future, it will give business a path forward in our fast-changing present.

We will discuss the concept of redefining sustainability more at the BSR Conference 2017—stay tuned for registration launch in May and join our mailing list to be the first to receive Conference news and updates.

Blog | Thursday March 11, 2021

Leading with Equity: How Companies Can Promote Social Justice through DEI

Preview

I have a very simple professional philosophy: No one voice should be louder than the other. No one hand should control every action. No one perspective encompasses everyone’s reality. No one body should take up all the space. We all add value, and we all belong. I am excited to bring this philosophy to BSR as Director of Diversity, Equity, and Inclusion (DEI) and to further our mission to build a more just world.

In my nearly 20-year career, I have had the honor and privilege of working with people from a wide array of backgrounds and experiences—ranging from the deepest of grassroots to the highest levels of government—across a wide spectrum of social justice issues as a funder, advocate, and strategist. Most recently, I have worked with companies to help reimagine their DEI strategies to center equity, a key component of social justice.

Companies are powerful stakeholders that have the ability to help shape a more inclusive world in which all people have fair access to opportunities and the ability to participate in activities to better their lives.

I believe that companies are in a unique position to drive broad impacts that extend well beyond their HR and supply chain operations. In fact, companies are powerful stakeholders that have the ability to help shape a more inclusive world in which all people have fair access to opportunities and the ability to participate in activities to better their lives. To achieve this, companies should keep the following four things in mind:

1. It’s not about outputs. It’s about impact.

To start, we need a radical shift in mindset and vision for how business can be levers for positive social change. This includes stretching beyond a focus on traditional KPIs and diversity metrics, which are normally shorter-term quantitative measures, and instead going deeper by looking at quality or effect of these efforts over a stretch of time. 

I like to think of it as the big ‘so what?’ question. This means that businesses should be more intentional about how they are setting DEI targets and see them not as mere transactions but as  opportunities to create meaningful transformation, both within the business and at the community level.

2. Companies are not independent actors. They are community stakeholders.

Setting and achieving big, bold, transformative DEI goals is not an insular endeavor; it creates ripple effects outside of a company’s day-to-day operations. The business sector must be willing to see itself as a co-conspirator in the pursuit of social justice and inclusion alongside other anchor institutions such as government, NGOs, and academia.

More importantly, companies need robust community engagement strategies that proactively seek to engage and build relationships with—not just include—the oft-forgotten voices of marginalized frontline communities. Such communities often lack power and influence but are rich with insight, ideas, and data steeped in lived experience. Their direct participation can provide businesses with information about issues relevant to their quality of life, help to identify and remove barriers to opportunity and accessing resources, and establish an added layer of external accountability.

BSR’s approach to helping businesses advance their understanding of DEI is one that will also inform how we engage with our member companies and partner agencies.

3. Aim to learn rather than to lead.

Becoming an equitable and inclusive business is an iterative process that requires a commitment to learning and a willingness to grapple with the uncertain. Unlike many other business operations, DEI is about shifting behaviors, which is an adaptive challenge where there are no one-size-fits-all approaches. Company leadership should dedicate time and resources to develop and refine a shared vision for action with stakeholders at all levels, test strategies to determine what works best given their unique set of circumstances, and understand that there are no quick fixes—changing a company’s culture takes time and requires constant experimentation.

Additionally, because it is about systems change, DEI is an area that requires collaboration over competition. Business leaders have an opportunity to establish a community of practice in which they can engage in peer-to-peer learning, have a safe environment for sharing challenges, and most importantly examine ways in which DEI can drive innovation for the sector.

4. DEI is not an add-on function. It’s a lens through which business operates.

Lastly, DEI is more than a set of aligned strategies within a company’s HR, supply chain, and corporate philanthropy departments. It is a philosophy that permeates throughout a company’s business operations and is a way to actualize its stated values.

A strong DEI plan enables a company to apply a critical lens to its policies, practices, and programs and to identify how it can be more inclusive and create opportunities for those who are systematically marginalized. It also means reimagining the power of business to drive systemic change and meet the needs of society’s most vulnerable.

The BSR approach

I am a strong adherent of modeling the behavior that we wish to see from others. BSR’s approach to helping businesses advance their understanding of DEI is one that will also inform how we engage with our member companies and partner agencies.

We see ourselves as part of a larger ecosystem of actors seeking to create a world in which everyone—regardless of identity or background—is afforded the opportunity to equal participation in all aspects of life, has fair access to resources, and can be assured that systems are operating in ways that improve the quality of life for all, and not a select few.

BSR believes that to achieve this, we must prioritize the needs and voices of those who have been and continue to be subject to marginalization and exclusion. Anchored by this belief, our DEI offerings will take on an “equity-first” approach that embodies all the above-mentioned precepts.

I will admit that this vision for BSR’s DEI work is ambitious and will at time feel fraught with discomfort and chaos. But DEI is a tool for disruption, and it is in the commotion that magic emerges. I look forward to pushing us beyond our comfort zones and tapping into that most radical part of our collective imagination—the part that sees a ‘just world’ as more than a mere aspiration, but as a reality that BSR is shaping.