Case Studies | Wednesday January 31, 2024

Conducting a DEI Assessment in Asia Pacific

Preview

Introduction 

In 2021, BSR worked with Zuellig Pharma, a healthcare solutions company increasing accessibility to healthcare in Asia Pacific (APAC), to conduct a Diversity, Equity, and Inclusion (DEI) Assessment. Using BSR's methodology, the assessment gauged the effectiveness of Zuellig Pharma's DEI efforts and determined its level of maturity and ability to continuously improve. This included an assessment of the company's DEI-related policies and procedures, internal DEI governance, and the existing level of external reporting on various DEI topics. The assessment revealed that Zuellig Pharma was in the early stages of its DEI maturity journey. BSR provided valuable recommendations for Zuellig Pharma to proactively address identified gaps and fortify its existing DEI initiatives. The strategic guidance helped Zuellig Pharma strengthen its DEI commitment and evolve its DEI program into a more robust and established framework. 

Background 

Zuellig Pharma is a healthcare solutions company covering 16 markets across Asia, with the mission of making healthcare more accessible to the communities it serves. The company provides distribution, digital and commercial services to support the growing healthcare needs in this region.  

Zuellig Pharma's Sustainability Framework is built on four pillars. One of these is “Nurturing Talent,” which defines how the organization creates an inclusive and safe work environment that empowers employees to reach their full potential. This covers focus areas such as talent recruitment, development and retention, employee well-being, and DEI. Given the diverse cultural landscape within the region that its operations cover, there is a high level of diversity within the organization, leading to Zuellig Pharma identifying DEI as a material topic for the company. 

The Challenge 

Zuellig Pharma expressed a collective desire to operationalize and formalize its commitment to DEI to build upon its diverse environment and to comply with prevalent industry requirements and existing ad hoc DEI initiatives. Recognizing the pivotal role that DEI plays in the company's overall success, the senior leadership sought to enhance both internal and external DEI support across all offices in the APAC region, and the company prioritized fostering cross-cultural sharing and gaining insights into the varied interpretations of DEI across its different offices.  

Prior to launching a comprehensive DEI program, which involves formalizing commitments at the highest levels and cultivating a DEI strategy and culture throughout the organization, Zuellig Pharma recognized the need to assess its existing internal DEI efforts. The company aimed to understand its current standing, identify best practices, and pinpoint opportunities for further engagement. Consequently, Zuellig Pharma enlisted the expertise of BSR to conduct a thorough DEI assessment. 

BSR’s Response 

The assessment’s objectives were to identify opportunities to integrate inclusive policies and practices across its business; understand the gaps, challenges, and opportunities by creating a diverse, equitable and inclusive workplace; improve stakeholder experience and engagement across Zuellig Pharma’s business; and identify opportunities for further engagement with a view to develop a DEI strategy via a clear roadmap. The intent of the findings from this assessment was to enable Zuellig Pharma to strengthen its commitment to DEI. 

BSR's DEI Assessment methodology included a review and gap assessment of Zuellig Pharma’s internal policies and procedures, as well as a series of confidential discussions with the company's DEI taskforce (including senior management, which gave leadership buy-in for this exercise) on key DEI material topics, such as: LGBTIQ+ Allyship, Cross-Generational Exchange, Mental Health and Wellness, Race, Religion, Ethnicity, Cultural Awareness, Socioeconomic Empowerment, and Gender Equality. 

An employment perceptions survey, deployed across 13 geographies/offices in the APAC region, gathered insights from employees across cohorts in the following geographies: Brunei Darussalam, Cambodia, China, Hong Kong, Indonesia, Korea, Macau, Malaysia, Myanmar, Philippines, Singapore, Taiwan, Thailand, and Vietnam. 

The results of the employee perceptions survey (both qualitative and quantitative) offered in-depth insights and perspectives into the employee experience, including opportunities, challenges, and concerns. These insights and perspectives provided views around three key questions:  

• What are the key social issues that are important to you as an employee of Zuellig Pharma? 

• What is Zuellig Pharma doing well to foster DEI? 

• What activities could make the company more diverse, equitable, and inclusive? 

Impact 

The successful conclusion of the DEI assessment highlighted that Zuellig Pharma had a strong foundation for further developing its DEI program, and it helped the company understand the gaps and challenges. Through the DEI assessment, offices across 13 geographies were able to identify contextually and culturally specific priorities, and the internal regional assessment allowed teams from different countries to engage on similar goals related to DEI.  

The DEI assessment established a baseline for Zuellig Pharma to not only identify best practices but also uncover opportunities for enhancing its commitment to fostering a diverse and inclusive workplace via the integration of inclusive policies and practices. With strong support and buy-in from senior leadership, Zuellig Pharma formed its DEI Core Committee, comprising six pillars and informed by the DEI assessment. This exercise was an important first step in informing Zuellig Pharma's subsequent DEI efforts in fostering a more inclusive workplace since it helped prioritize DEI topics that were important to its employees.  

Building on the DEI assessment, Zuellig Pharma achieved several DEI milestones. It launched various initiatives informed by the priority areas from the DEI assessment: creating an inclusive environment for working mothers (addressing Gender Equality), bringing generations together to discuss ways to better work together and leverage each other’s strengths (Cross-Generational Exchange), normalizing talking about mental health issues at the workplace (Mental Health and Wellness), and conducting a survey to identify opportunities for further conversations to support the LGBTIQ+ community (Employee Engagement).  

Key outcomes arising from the DEI assessment and the initiatives and improvements resulting from the assessment include:  

• More than 50 percent of Zuellig Pharma’s employee base and middle management positions are now occupied by women, and the company has made progress in increasing the representation of women in senior management roles over the years. 

• The average unadjusted gender pay gap at the company is 0.16 percent for equivalent roles and skill sets (in comparison, the global average is 20 percent). 

• 100 percent of its employees has completed anti-discrimination and harassment training.  

“BSR has been a steadfast partner of our Sustainability efforts, bringing to Zuellig Pharma the expertise and support to create meaningful impacts. In the field of DEI, our work with BSR sets us on the path of sustainable excellence, which can only be achieved through equal opportunity, cooperation, and a progressive mindset. With BSR we strive to foster a culture of continuous progress and a workplace where the success of our employees knows no bounds.”"

- Jean-Gaetan Guillemaud, VP, Corporate Affairs

Conclusion 

Against a global backdrop where DEI approaches are increasingly used as a strategic tool to improve competitive advantage, elevate employee engagement, and foster a more supportive and inclusive workplace that values diversity, a similar trend is emerging in the APAC region. The growing interest in understanding and implementing DEI practices in APAC is underscored by the diverse maturity levels and ambitions of companies, coupled with varying perspectives on DEI across regions. Recognizing this diversity, there is no universal framework or 'one-size-fits-all' approach. 

In this context, establishing an ambitious long-term vision and mission for DEI requires a strategic initial step. For companies embarking on their DEI journey, undertaking a DEI assessment becomes paramount. This first step allows organizations to comprehensively understand and evaluate their current internal DEI initiatives, while pinpointing opportunities for further engagement. In the case of Zuellig Pharma, the DEI assessment helped the company to recognize the diverse landscape of DEI perspectives and practices as the foundational step to establishing a baseline for its DEI roadmap. 

Get in Touch 

This case study was written by Kelly Scott and Jiajia Chen. Please direct comments or questions on working on DEI in the APAC region to the EIJ team.  

People

Laura Macias

Preview

Laura leads RISE's Women’s Advancement and Leadership Program. She also leads the Data, Evidence, and Learning strategy globally and the implementation of RISE in India and Latin America.

At BSR, she worked on Keeping Workers in the Loop, where industry leaders collaborated on exploring the just transition to a circular fashion model, and she advised companies across the globe on equity, inclusion, and justice strategies, with a focus on supply chains. 

Prior to joining BSR, Laura researched the relationship between innovation, artificial intelligence, and diversity as part of the OECD Observatory of Public Sector Innovation. She also worked at UNICEF in corporate partnerships and fundraising. 

Laura writes about equity-related topics as a columnist, and she speaks Spanish, English, and French. She has an MPA degree from Sciences Po, and she completed a fellowship in public leadership at the Universidad de Los Andes.

Blog | Wednesday March 5, 2025

Beyond International Women’s Day: Enduring Actions for Global Business in a Turbulent Time

Preview

To use a trending metaphor these days—the progress of women in every sphere is at a fork in the road. Unleashing the full potential of women and girls could add more than $12 trillion dollars to global GDP, drive productivity and the bottom line, and support families and communities around the world. Simultaneously, rising populism and rollbacks in democracy globally correlate with threats to women's equality in every domain, which is having a chilling effect on what actions the private sector takes internally and externally.

According to the World Economic Forum’s Global Gender Gap Report 2024, it could take five generations or 134 years to achieve full parity worldwide. This is an incalculable amount of lost revenue, productivity, and innovation. There is no shortage of research and business case-making that unpacks the causes of these chronic gaps and implications of diminished opportunity by gender.

Overall, women’s employment worldwide has surged past pre-pandemic levels. However, increased representation of women in leadership at companies has largely stalled. Let alone workplace policies that would unleash greater participation and productivity among women at all levels of work.

Recent high-profile campaigns—such as those seen during the Super Bowl in the U.S. or on statues in the U.K. or in publications across India—have reignited discussions on gender equity, challenging outdated norms and spotlighting barriers to opportunity on a massive scale. These manufactured flashpoints, often supported by businesses in different ways, can help raise awareness but any actual impact comes after the spotlight fades.

With company initiatives and workplace policies facing backlash and budget pressures, business leaders need to wrestle with the reality: the scrutiny that symbolic gestures and commemorative celebration invites make companies less inclined to talk about the challenges. But what enduring actions can companies take that embed opportunity into business operations?

1. Assessment as part of intervention. The Women’s Empowerment Principles Gender Gap Analysis Tool is a guide designed to help companies from around the world assess gender equality performance across the workplace, marketplace, and community. This free tool helps companies of all sizes and industry inventory their current efforts and understand benchmarks to inform meaningful goals. The questionnaire itself can be a useful intervention.
2. Tap existing competencies where they exist, such as adding a gender lens to existing human rights tools. Roadmaps and case studies are readily available. Furthermore, as companies adopt AI in new and untested ways, practitioners can integrate human rights principles and human rights assessment (HRA) approaches by bringing an explicit gender lens.
3. Pay equity as the baseline. Conduct a wage equity audit and make the adjustments needed to achieve fair and equitable pay at all levels and in all countries.
4. Commit to paying a living wage. The national minimum wage in the U.S. hasn’t been raised in 15 years, let alone kept up with inflation. Wages vary depending on states and disparity across global regions. Companies are setting standards for their workplaces and across the value chain.
5. Offer paid sick time and paid family and medical leave. Workers need access to paid sick time for when they are ill or must-see health care professionals, especially if they have to travel long distances or wait to see providers. Recently, decreased access to reproductive healthcare in the U.S. has driven companies to find ways to increase benefits and programs to enable access to care. Employees also need access to paid family and medical leave for themselves or family members who may need assistance at various stages of life. While state and country requirements vary, employers can set a standard for their workplaces, especially where laws leave gaps.
6. Continue to expand supply chains with expansive procurement processes. Companies can continue dedicated efforts to scout and make joining corporate supplier programs easier, especially for emerging vendors. Procurement is an important tool companies can wield to build economic inclusion and can contribute to consumer loyalty.
7. Bring the perspectives of women into boardrooms. Consider executive as well as frontline employee representation on the corporate board to prevent blind spots and inform governance decisions. In some global regions, such representation is required, whereas some companies have experimented with employee advisory boards or other ways to tap existing employee voice (ERGs, unions) to gather inputs.
8. Support community-level and systemic change. Companies can assess their prior philanthropic and social impact commitments alongside existing unmet needs facing employees and customers in communities where they operate. Companies can help advance reforms when it comes to public policy and even regulations that support fairness and economic inclusion for everyone. For example, companies can support spending on infrastructure like transportation and housing—issues that directly impact the ability of women to work and care for families. 

Leading with Purpose Every Day

This International Women’s Day serves as a reminder that supporting women in the workplace shouldn’t be confined to the calendar. Companies can prioritize meaningful action over performative gestures, creating lasting impact year-round. This approach not only fosters a more inclusive environment but also contributes to long-term success and resilience of businesses and nations.

Blog | Tuesday October 18, 2022

Building Trauma-Informed Workplaces: Recommendations for Business

Preview

Modern slavery and human trafficking is on the rise. While the public and private sectors have largely focused on preventing and mitigating these risks, more can be done to address the root causes of labor exploitation.

Safe, sustainable employment is one of the most effective ways to support survivors in securing their livelihood. The private sector is uniquely positioned to provide vocational training, skills and confidence coaching, and entry-level jobs for survivors who seek financial stability.

The Global Business Coalition Against Human Trafficking (GBCAT) recently sat down with three organizations to learn about their programs to employ and empower survivors of human trafficking and their efforts to implement a trauma-informed workplace that enables all employees to thrive. We discussed how they had got started with survivor employment and empowerment, key challenges of adopting a trauma-informed approach, and lessons learned for business.

Here we share some key findings from these conversations to help more businesses implement their own trauma-informed practice.

Three Businesses Employing Survivors of Human Trafficking

While still too few and far between, a variety of organizations are showing leadership in employing survivors of human trafficking and other forms of exploitation. Our case studies highlight three successful examples:

1. The Market Project, a US-based nonprofit organization which builds businesses that offer stable work to survivors, launched Nguvu Dairy, a yogurt company in northern Uganda. They have employed hundreds of men and women, most of whom have experienced high levels of trauma. See the full conversation here.
2. Marriott International and GFEMS, a global hospitality company and an international fund working to end modern slavery, have created the Future in Training (FIT) Hospitality curriculum. FIT provides training and resources in the hospitality industry and supports survivors in navigating career paths. See the full conversation here.
3. Outland Denim, an Australian denim company, currently employs over 50 survivors of human trafficking and other forms of exploitation in Cambodia. Outland Denim has a holistic philosophy to employment, which includes a two-year training program, paying a living wage, and additional educational and professional development opportunities. See the full conversation here.

Three Key Takeaways for Business

1. Trauma-Informed Approaches Benefit Everyone

Poverty and a lack of economic opportunity are key drivers of human trafficking and other forms of exploitation. When individuals are not financially secure, they are more vulnerable to deceptive recruitment or employment practices.

Access to safe and stable employment not only reduces survivors’ own risk of exploitation but also that of dependents, like children or young adults. Three-quarters of employees at Outland Denim expressed feeling a reduced level of risk to exploitation after just six months of employment.

Moreover, education, vocational training, and other resources can benefit entire communities. 98 percent of surveyed employees at Outland Denim noted that they share the education provided by the company—such as personal finances—with their families and communities, extending their reach and impact.

All employees can benefit from a trauma-informed approach, which helps to build trust and employee motivation, strengthen relationships, and emphasizes diversity, equity, and inclusion.

2. Importance of a Long-Term Approach to Partnerships

Business cannot start out alone when building a survivor empowerment program. They should partner with immediate needs providers and vocational training organizations to help identify survivors as well as assess whether they are ready for employment and provide critical support services, like healthcare and legal aid.

Partnership should not stop once a survivor has been hired; business can continue to seek support of expert NGOs in the initial stages of the employment journey.

Marriott and GFEMS have worked together to develop the FIT curriculum and to address barriers—including transportation, childcare, and financial assistance—that would prevent survivors from accessing the curriculum.

3. Iterative Learning Supports Progress

The relative infancy of most survivor empowerment and employment programs—and the complexity of challenges faced—make monitoring, evaluation, and iterative learning core to their success. Each organization and program have developed a monitoring and evaluation framework. Incorporating the feedback of survivors is another integral element.

The Market Project conducts semi-annual impact evaluation surveys at Nguvu Dairy to assess and refine the company’s approach to survivor employment. The survey provides critical site-level information about employee experiences, feedback on how managers are implementing a trauma-informed workplace, and indications of employees who, save for the job, would be at potential risk of exploitation.

Business Benefits

Many workers have experienced varying degrees of trauma. Some may be survivors of modern slavery, while others may be survivors of domestic violence, drug or alcohol addiction, conflict, or war. An organization that acknowledges and respects the needs of trauma survivors and fosters an environment in which they feel safe, supported, and empowered will find that these benefits create a better place to work for everyone. 

Conversely, introducing survivors of modern slavery into a business that has not adopted a trauma-informed management style may inadvertently risk retraumatizing survivors by exposing them to power dynamics that mirror past experiences. 

GBCAT is proud to share the experiences of Marriott International, Outland Denim, and the Market Project, showing how companies that update their practices and policies to be trauma-informed can create an environment that is safe for all.

These three case studies accompany GBCAT’s Business Guide on Empowerment and Employment of Survivors of Human Trafficking and the newly released virtual Trauma-Informed Company Training, developed in partnership with Futures Without Violence, which provides additional guidance for business on how to design and establish a trauma-informed workplace. For more information on GBCAT and how to become a member, reach out to the team.

Audio | Thursday February 13, 2025

A Year of Uncertainty: Maintaining Progress Amidst a Battle of Ideas

Preview

Following his recent blog about the “Ten Big Questions Facing Sustainable Business Leaders in 2025,” BSR President and CEO Aron Cramer chats with David Stearns about the EU Omnibus package and its potential impact on regulatory requirements, why sustainability goal setting remains a valuable exercise in an environment of political pushback and uncertainty, the future of COP (with or without U.S. involvement), and why sustainable business must shift the language it uses to describe—in tangible ways—its connection to improving people’s lives and wellbeing.

Blog | Friday June 15, 2018

The Digital Payments Opportunity: A Conversation

Preview

We recently sat down with UN-based Better Than Cash Alliance's Private Sector Digital Innovation Lead Marjolaine Chaintreau and BSR's HERproject Associate Director Chhavi Ghuliani to discuss the new report, The Future of Supply Chains: Why Companies Are Digitizing Payments, which features a case study on BSR’s HERfinance work in Bangladesh.

Jorgette Mariñez: Why are cash transactions a problem for companies?

Marjolaine Chaintreau: Cash is expensive to store, transport or insure—and it is also inefficient. For example, many consumer goods companies operating in cash-based countries need to hire security guards to accompany drivers delivering products to shops, as distributors are often targeted for robbery. Cash payments are also more easily subject to fraud and leakages.

Chhavi Ghuliani: In a country like Bangladesh, for example, where we are partnering with the Bill & Melinda Gates Foundation to digitize garment worker wages, cash has to be transported to factories in armored vehicles, then sorted, counted, and distributed to thousands of people. This is a risky and time-consuming process that can span several days in a larger factory. In addition, for global companies sourcing from these factories, cash means less transparency and traceability of wage payments to workers in their supply chains.

Mariñez: What are digital payments, and what are the business benefits they can bring?

Chaintreau: Digital payments are transfers of value made through any kind of digital channel. They include payments made with traditional electronic bank transfers, mobile money accounts (i.e. using phones), and payment cards (credit, debit, or prepaid cards).

Companies that have shifted to responsible digital payments have experienced business benefits, including increased revenues and stronger relationships with supply chain partners. In Kenya, small retailers that are a part of Unilever’s Jaza Duka (“fill up your store”) program were able to access digital working capital loans based on retailers’ purchasing history with Unilever. These shops expanded product inventory and variety, increasing foot traffic to stores and growing sales by 20 percent within the first six months of implementation.

Ghuliani: Our analysis from Bangladesh shows a 53 percent reduction in admin time and effort spent on payroll when a factory switches from cash to digital payments. Additionally, we estimate that a factory can save about 25 minutes of production time per worker by switching to digital wages because workers do not need to be taken off the production line to collect cash. Many of the global companies we partner with also benefit, because they see digitization as a way to support the financial inclusion of women in their supply chains while also ensuring workers are getting paid correctly and on time. The greater transparency that digital wages provide is critically important.

Mariñez: Why is this so valuable for the workers in the supply chain?

Chaintreau: Workers that are paid in cash are often excluded from the formal financial sector; being paid digitally can be the first step toward opening an account. This can provide the ability to save money, which can potentially increase workers’ formal participation in the economy and access to other financial services, such as credit and insurance. Digital payments can also help workers save time, and they can reduce personal security risks, as workers do not need to travel with pockets full of cash.

Ghuliani: The majority of workers in global supply chains, particularly in light manufacturing and agriculture, are women, for whom the benefits of digitizing wages are even greater. Their financial inclusion is linked with greater control and decision-making over financial matters and can reduce the risk they disproportionately face from transporting large amounts of cash. After having their wages digitized, the percentage of women in Bangladesh who reported they were handing their salaries over to their spouses on a monthly basis dropped from 43 percent to 25 percent.

Mariñez: What industries or markets have the most compelling case for considering digital payments?

Chaintreau: In this report, we focused on three main sectors—agribusiness, fast-moving consumer goods, and the apparel industry—to show the breadth and diversity of opportunities that digital payments can bring to workers, smallholder farmers, and small businesses/shops. However, companies of all sizes and sectors can benefit from implementing the necessary building blocks of digitizing payments in their supply chains.

Ghuliani: Any industry that still relies on cash for salary payments can benefit from digitizing. We chose to focus on the garment industry in Bangladesh in our HERfinance work because it still relies on cash, it employs mostly women, and it is a consolidated industry. This meant we could reach tens of thousands of low-income, underbanked women by focusing on a small number of garment clusters in the country.

Mariñez: What are the biggest challenges to digitizing payments? 

Chaintreau: It takes time to build trust and drive usage of digital payments. For companies, the main challenge is ensuring that all actors in the supply chain see a positive value proposition to move away from cash into digital payments. This means having appropriate accounts and financial products addressing the needs and capabilities of workers or farmers, especially women. It is also critical to build incentives beyond payments, like access to savings, remittances, or working capital.

Mariñez: For those companies that are interested in doing this, what is the first step?

Chaintreau: Ask the question! How are payments made in our supply chain, and what are our costs associated with using cash? In our experience, the key to successful digital payments solutions is having buy-in from senior leadership and alignment across the departments that will be affected, such as sales, procurement, distribution, and finance.

Ghuliani: My recommendation is for companies that are thinking about this issue, particularly in the supply chain context, to collaborate. To maximize the benefits of digitization to workers, we must shift entire industries away from cash and also build a supporting ecosystem so workers can not only be paid digitally, but also spend digitally. This can only happen when we reach significant scale. Our HERfinance Digital Wages program has reached more than 160,000 low-income workers so far, and while that is significant, there are still millions of workers in Bangladesh still paid in cash. More action and commitment from buyers and their suppliers is needed.

Chaintreau: I agree! Collaboration will be required to successfully make this transition. While some leading companies, financial institutions, and governments are already working together to build inclusive and responsible digital payments ecosystems, there is an opportunity for more companies to join this movement and realize the full benefits of digitization for their business and stakeholders.

Blog | Tuesday April 19, 2022

Navigating Emerging Ethical Issues: Lessons from Bioethics, Tech, and Human Rights

Preview

The healthcare sector has constantly grappled with ethical questions at the cutting edge of regulation. This is often the case in the field of bioethics—the study of and response to the moral and ethical questions arising from the research, development, sale, and clinical use of pharmaceutical and healthcare products and associated technologies. How far should we go to save someone’s life? Is it fair to experiment on certain groups of people? Established principles and rules on bioethics (e.g., autonomy, beneficence, informed consent), together with a growing body of industry guidelines, have helped companies to navigate these questions. 

However, the exponential speed of research and biotechnology development presents healthcare companies with ever more complex ethical questions. This challenge has been amplified by the convergence between healthcare and data, technology, as well as growing public scrutiny of the corporate response to the COVID-19 pandemic.

To effectively identify and manage arising issues, companies need robust policies, governance structures and risk management processes—as well as a strong organizational culture. 

A human rights-based approach provides a strong foundation for addressing ethical issues. Drawing on BSR’s work with healthcare and tech companies, and our expertise in applying human rights frameworks to businesses’ ethical challenges, this blog shares some insights on best practices for managing emerging ethical issues in a corporate context.

The Challenge of Uncertainty

What do we mean by emerging ethical issues? This could be any decision or activity that raises new ethical questions of “right and wrong” and challenges a company to define “what kind of company are we?”  Are we comfortable enabling an elderly person’s loved ones to always track their location? Should we pursue a marketing strategy even if it excludes certain people?

Such emerging ethical issues have common characteristics: the actual or potential impacts are not well or fully understood, and regulation and existing policies don’t provide all the answers. The public may not even know yet where it stands, as we’ve seen recently on the question of vaccinating children against COVID-19 or deploying facial recognition in public spaces. Caught between the precautionary principle (“stop until we know it’s safe”) and the pressure to innovate—and with limited time to decide in the face of exponential change—companies must find a way to navigate ethical uncertainty. 

Lead with “Tone from the Top” and Inspire “Bottom-Up” Engagement  

Leadership is essential to set a company’s ambition beyond legal compliance and drive required action. But this is most effective when combined with the engagement of employees, who will need to identify and address emerging ethical issues on a day-to-day basis. We’ve seen the positive impact of CEOs addressing employees directly and honestly on a company’s challenges and building employees’ ethical “muscle” memory via internal “ambassador” networks and informal group discussions on ethical topics.

Healthcare companies—and other companies adopting mission-driven purposes—have the advantage that their employees and leaders tend to be motivated by the company’s societal mission and thus predisposed to engaging on emerging ethical issues. Seize it.

Adopt a Cross-Functional Approach

Emerging ethical issues, especially where healthcare and tech are concerned, do not fit neatly within the defined lines of corporate functions. A new medical device may raise questions about data ethics, public policy around access to healthcare, and end-of-life disposal. A cross-functional approach is required to ensure companies approach emerging ethical issues in an informed way that benefits from multiple perspectives. 

Leading healthcare and tech companies do this well by convening a range of expert voices on their external bioethics advisory committees (including philosophers, theologists, and sociologists) or organizing internal working groups that bring together different functions (e.g., compliance, privacy, research and development, human rights) to identify and discuss appropriate responses to potential emerging ethical issues across the business.

Anchor in Enterprise Risk Frameworks 

Companies should consider their “ethics and compliance” risks in a proactive and future-looking way and include emerging ethical issues (that may not yet present legal or compliance risks) into their enterprise risk management (ERM) frameworks. Although we are seeing progress toward ERM frameworks integrating “ethical” risks to people and the planet beyond legal compliance risks, there is still a ways to go.

In practice, anchoring responsibility for emerging ethical issues in business ethics and compliance functions can enable greater reach and impact across the company by leveraging the established relationships, governance structures, and engagement resources of these risk management functions. A strong and strategically minded ethics and compliance function can also help raise awareness around emerging ethical issues at executive and board levels.

Be Open and Engage External Perspectives

Transparency and open engagement with external experts and stakeholders lead to more informed and accountable positions that avoid groupthink. Advisory boards with external experts are a common feature of healthcare companies and have inspired the development of digital ethics boards in tech companies. It is important to bring independent expertise and external perspectives into a company’s decision-making process, which can also be achieved through ad hoc bilateral engagement with experts and/or through industry and multistakeholder collaborations. 

A recent BSR project revealed that healthcare companies don’t talk about their bioethics challenges externally in the open way we’ve increasingly seen on other environmental and social topics. Tech companies have learned the hard way and are now showing signs of greater transparency regarding what dilemmas they face and how they are resolving them. Healthcare and other companies would do well not to wait for a similar crisis in trust to pivot to a more open culture—as the COVID-19 response has prompted some to do already. 

To maximize the benefits of healthcare and new technologies for society, companies will need strong governance structures and organizational culture to identify and address emerging ethical dilemmas as they arise. The insights in this blog should help build a more resilient business in today’s rapidly changing context, as well as meet growing regulatory and stakeholder expectations on managing social and environmental impacts.

Blog | Monday August 19, 2019

How Aligning Sustainability and Risk Can Overcome Organizational Blind Spots

Preview

One of the most striking trends in sustainability over the last few years has been the demand from companies to help them align sustainability and enterprise risk management (ERM) frameworks. This work has proved to be highly effective in helping our BSR member companies integrate sustainability, address blind spots, and develop more robust strategies. As one of our member companies commented in a recent interview: “Companies that have a well-developed ERM process are far better at managing sustainability issues.”

While practitioners of risk and sustainability have reason to be skeptical of each other, the current approach fosters institutional blindness and narrow thinking. On reading a corporation’s annual report and then perusing its sustainability report, they might as well be different companies. Risk disclosures are biased toward the selection of only the issues on which the company can take direct action to mitigate; its sustainability disclosures risk coming off as marketing exercises that feature happy children and questionable data. The current divide is in no one’s interest, and changes in the world are forcing both parties and organizational management to rethink.

The Current Approach

Until recently, sustainability practitioners tended to dismiss risk-led approaches as regressive. Early corporate social responsibility efforts focused on philanthropism divorced from the core business; this evolved into compliance-driven risk-reduction work focused on the supply chain. Both approaches were eclipsed by concepts of “shared value,” which hold that companies should pursue sustainability initiatives that simultaneously create business value and address societal concerns. Growth and innovation, not risk reduction, is the goal of this approach to sustainability. Inspired by the chance to build a more just, equitable world, corporate sustainability leaders want to alert senior leaders to sustainability’s transformational opportunities, not focus exclusively on narrow risk-reduction efforts in energy use, recycling, and health and safety.  

For their part, risk management professionals tend to regard sustainability as vague and grandiose. ERM categorizes business risks and then measures their impact and likelihood before and after mitigation efforts. The focus in sustainability on “material priorities” does not slot easily into these frameworks. Materiality assessments consider the overall relevance of issues to a business and to society according to a variety of qualitative and quantitative approaches. While they do seek to determine an issue’s impact on the business—distinct from the issue’s impact on stakeholders—they do not translate these issues into plausible events or evaluate their likelihood. These limitations can make it difficult to differentiate between strategic sustainability opportunities and “table stakes” compliance issues. Indeed, assigning internal ownership of such issues as climate change or economic inequality lies somewhere between challenging and impossible. The effects of these risks are broad and unpredictable, with mitigation responsibilities crossing several departments. No company can address these risks solely through its own actions. It is far easier to leave them off the list.

If priority sustainability issues can be evaluated using risk management tools, goals, actions, and programs will become much more rigorous and robust.

A Path Forward

In the 2019 World Economic Forum list of global risks, the primary items are not economic or geopolitical. Mounting investor interest in climate change is driving broader consideration of the financial consequences attending systemic environmental and social risks, which have eclipsed governance issues as focal issues for activist investors in the past several years. The new chief executive officer of the Sustainability Accounting Standards Board recently declared that “sustainability isn’t new; it is the new face of risk.”

The World Business Council for Sustainable Development (WBCSD) and the Committee of Sponsoring Organizations of the Treadway Commission (COSO) have published a wealth of innovative thinking on how best to practically align sustainability and risk concepts. These approaches will help integrate sustainability into core business decisions, driving a more robust, differentiated understanding of risk. This will help focus proper consideration of a company’s impact on its environment and on potential consequences for the company’s reputation—itself an ever-tighter feedback loop.

If priority sustainability issues can be evaluated using risk management tools, goals, actions, and programs will become much more rigorous and robust. BSR has conducted gap analysis between the materiality “long list” and the risk taxonomy to ensure that there is a clear understanding of where there is overlap. We have also evaluated priority risk material issues using ERM criteria, notably analysis of likelihood and reputational risk. By using these tools, we have sparked hugely productive discussions between the risk and sustainability function that have driven clearer approaches to strategic priorities and supported traction with senior leadership. We have also brought risk, sustainability, and other functional teams together in scenario planning workshops to drive creative thinking about the longer term future.

As businesses prepare for the 2020s, they must prepare for the consequences of climate change, the onset of disruptive technologies and new business models, and huge demands for transparency from stakeholders—from investors to employees. 

These approaches do not mean reverting to a narrow concept of sustainability as risk reduction. It means that sustainability practitioners must become much clearer as to what constitutes a true business risk, as opposed to a reputational concern or strategic sustainability opportunity. Clarity will help ensure more robust implementation plans, goals, and issue accountability. As a BSR member puts it: “Sustainability needs to be part of the ERM process, and we need to clearly distinguish between what is a business risk and what is not. We need to act decisively on material sustainability risks, but people will get tired if we claim all sustainability issues are also business risks.”

For their part, risk teams will maintain a core focus on short-term, quantifiable risks. However, better alignment can provide language and concepts to evaluate emerging concerns and better anticipate large societal shifts that have too often been dismissed as unpredictable “black swans.”

As businesses prepare for the 2020s, they must prepare for the consequences of climate change, the onset of disruptive technologies and new business models, and huge demands for transparency from stakeholders—from investors to employees. A new collaborative approach between sustainability functions and ERM can help to drive stronger, more sustainable strategies to make business more resilient for the changes to come.

Blog | Monday November 23, 2020

Why Company Diversity, Equity, and Inclusion Programs Need Intersectional Approaches

Preview

Over the past two decades, women have made slow but steady progress toward workplace equality.

Globally, women’s share of board seats has increased, and the gender pay gap continues to gradually close. Over 3,800 companies around the world have signed up to the Women’s Empowerment Principles (WEPs) since their launch in 2010, and nearly a third of these companies have time-bound, measurable goals and targets to promote gender equality. Throughout this time, almost all corporate gender equality programming has worked under the assumption that a rising tide would raise all boats and that progress for some women would lead to progress for all. However, a more nuanced analysis shows that progress has not been felt evenly by all women.

• In the U.S., white women hold nearly four times as many Fortune 500 board seats than women of color.
• Research from the U.K. reveals that LBTQ+ women’s experience of sexual harassment and assault at work varied significantly depending on their ethnicity; 54 percent of lesbian, bisexual and trans Black and minority ethnic women reported unwanted touching compared to only 31 percent of white women.
• In France, Black, Arab, and Asian women are 2.5 times more likely to experience employment discrimination than white women.

Today, the COVID-19 pandemic—with its economic and social impacts—threatens to undo the progress toward women’s workplace equality, one of many considerations business must take into account as they plan for a post-COVID world. At the same time, the momentum of the Black Lives Matter movement has forced companies to look internally at how they perpetuate or dismantle racial discrimination. As more and more companies develop, enact, and expand women’s empowerment and diversity, equity, and inclusion (DEI) initiatives, business needs to understand women’s diverse and distinct experiences and undertake an intersectional approach.

One Size Does Not Fit All

Coined by Kimberlé Crenshaw in 1989, the term intersectionality recognizes that individuals experience discrimination based on multiple and intersecting identities, including race, religion, ethnicity, migrant status, sexual identity, sexual orientation, disability, age, or socioeconomic status. These individual characteristics “intersect” with one another and overlap contributing to unique experiences and may expose individuals to double or even triple discrimination grounds, making individuals more vulnerable in the workplace and in society.

Despite the growing awareness of intersectionality, companies have rarely applied this to their women’s empowerment efforts or wider DEI work. Instead, they tend to focus on one diversity characteristic, such as gender, race, or disability. This “either/or” mentality falsely pits the needs of underrepresented groups against one another and ignores the multiple and intersecting forms of discrimination and oppression that people face.

Current company ambitions and targets related to only one aspect of identity may leave some people out—and have the potential to disproportionately harm certain individuals in the workplace, albeit unintentionally. Furthermore, companies must recognize how ignoring intersectionality also misses opportunities for broader cultural change and policies that support a wider range of employees. Companies should learn from previous efforts, which focused narrowly on one issue, to see what works to promote greater diversity, equity, and inclusion for all.

Current company ambitions and targets related to only one aspect of identity may leave some people out—and have the potential to disproportionately harm certain individuals in the workplace, albeit unintentionally.

As companies think through developing or strengthening their DEI efforts, we recommend considering the following actions:  

• Investigate intersectional data to capture the local context and challenges: Instead of looking at gender and race, for example, as two separate issues, look at them together wherever possible along with other characteristics such as disability or sexual orientation. Salesforce, for example, reports its workforce profile in the U.S. broken down by race and ethnicity and how that intersects with gender. Looking at intersectional data can help to ensure that certain groups are not falling through the cracks of the very programs designed to support them. Intersectional data should also be used to design targeted approaches for specific groups where needed.
• Use qualitative data to understand the diversity of experiences: Quantitative data tells part of but not the whole story. Regular and meaningful employee engagement can provide a more complete picture of employees’ lived realities. Surveys, town halls, safe spaces for discussion, or other feedback loops can give insights into the lived realities of employees both in and out of the workplace. It can also offer a more nuanced understanding of the impact of policies and programs on different employees that can then be used to adjust or revise your approach as needed.
• Integrate multiple lenses into ambitions and targets: Set targets that look at the intersectionality of individuals, such as gender and race, disability, sexual orientation, among others. For example, closing the gender pay gap is a crucial step to achieve gender equality, but it ignores other groups who may face pay discrimination. In 2020, white women in the US earn 81 cents for every dollar a white man earns; however, for American Indian, Alaska Native, Black, African American, and Hispanic women, this number is 75 cents. By expanding to a wider pay equity approach across diversity categories, such as race, ethnicity, and gender, companies can create a more equitable workplace for all employees.
• Include an equity dimension: Give all individuals equal opportunities based on their background and unique circumstances/challenges. This means reviewing how current programming can unintentionally leave people out. As mentioned above, time-bound, corporate commitments to promote women’s leadership have led to impressive gains for white women, but women of color have seen less progress.
• Foster a diverse and respectful culture: Through communication, employee awareness-raising events, sponsorship programs, and employee resource groups, companies are transforming the workplace culture and ensuring that employees are part of and driving this change. Samsung, for example, has hosted open forums for employees to explore and learn from the different identities that make up the companies, with the intersection of race and sexual orientation as banner topics.

At BSR, we are committed to working with our members and partners to design meaningful approaches to look at diversity, equity, and inclusion through an intersectional lens. Please reach out to our team for more information on this work or to get started on transforming DEI approaches at your company.

Blog | Tuesday July 11, 2023

China's New Drive for Sustainable Consumption

Preview

A comprehensive drive to foster sustainable lifestyles is underway in Chinese markets, propelled by a range of policy incentives, targets, and environmental protection measures. This transformative shift has been catalyzed by the pandemic which heightened awareness of the crucial importance of sustainable choices in the face of disruption experienced by fast fashion and retail giants.

As global brands experience some challenges in the Chinese market, businesses looking to make their mark are compelled to go beyond the fast retail model, reconsidering everything from their supply chain to their core offering. At the same time, the market for second-hand goods is growing, alongside the use of recycled materials in products, bringing new opportunities as well as disruptive potential.

This shift is not merely a temporary trend: it is driven by a strong foundation of policy measures and infrastructure development. Alongside climate goals and emission reduction targets, the Circular Economy was promoted to a national priority for 2021-25 to support well-regulated growth in the secondhand market and develop recycling systems for waste materials across manufacturing, forestry, and agriculture. Comprehensive urban recycling systems are also delivering returns (literally): in Shanghai, recycling of domestic waste has reached 40%, with 98% of communities served.

At the same time, we are witnessing significant transformation in consumer behavior in China. This is fueled by a growing awareness of the environmental impact of our choices and facilitated by improved access to sustainable products and services, thanks in particular to the rapid growth of e-commerce platforms since the pandemic. For instance, consumers seeking closer connections with producers are now buying fruit and vegetables directly from thousands of farmers on their WeChat stores. Online resale and reuse platforms are also proliferating: popular ones include Xianyu, swap platform Ewu, recycling platform Aihuishou, and donation platform Ant Love—alongside the expansion of high street secondhand stores like Duozhuayu. This coincides with a growing preference for reusable products such as cups and bags.

It’s of little surprise that China is experiencing a flourishing ecosystem of sustainable start-ups. One driver is a strong preference for local and small-scale brands that provides unique and sustainable offerings, reflecting shifting consumer preferences away from mainstream fast retail models. Another is the Dual Circulation Strategy: a plan launched by the Chinese government in 2020 as the basis for its 14th Five-Year Plan to strengthen its economic power and domestic stability through balanced global and domestic markets with focus of increasing economic self-reliance across production, technology, rural development and consumer markets. Other recent government policies foster an environment conducive to entrepreneurship through regulatory and financial support for innovation, such as preferential tax policies for venture capital and special bonds for innovation in science and tech.

How Global Businesses Can Respond 

Global businesses sourcing from and operating in China need to align their strategy and practices with rising consumer demand for innovative products and marketing approaches to match, which is emerging as a force for economic development against an uncertain backdrop. China is still recovering from intense zero-Covid measures, coupled with political leadership reforms. Geopolitical tensions continue to pose challenges, resulting in a fragile market characterized by reduced consumer confidence and production stability. However, international businesses and top personalities are beginning to revisit the Chinese market, emphasizing the importance of maintaining ties with China.

To stay the course, Chinese businesses are showing their capacity to integrate sustainable product solutions, from alternative materials to production techniques, to embrace shifting consumer preferences. EV battery company CATL has opened the world’s first zero-carbon factory in Yibin, while Longyuan Power is blending waste wind turbine blades into building materials. Businesses operating in China, including those exporting to global markets, need to match their pace in adapting and anticipate the broader implications of this new status quo that will reshape China’s consumer market over the next three to five years.

Failure to respond to the changing landscape exposes companies that stick to traditional models to loss of market share, missed opportunities for sustainable business, penalties for regulatory non-compliance and even reputational damage. Successful strategies will take a long-term view aligned with consumer aspirations to contribute to a sustainable future.

Actions for business:

• Enhance collaboration to steer the market toward more sustainable offerings that meet consumer expectations, both throughout your supply chain and beyond it, through cross-sector initiatives, research partnerships and innovation accelerators.

• Invest in innovations and initiatives that foster circularity, from textiles recycling to closed loops for nitrogen in agriculture. Look for opportunities to reintegrate all waste streams, including water and energy. 

• Integrate sustainable offerings across the product journey, from design and choice of materials through to retail channels. Design for longevity and respect consumers’ right to repair.

• Increase supply chain transparency to meet the rising scrutiny of Chinese consumers and align with international standards. 

• Given the growing preference for local brands, work with local partners to better understand the dynamics of a rapidly changing and diverse market.

To understand more about how these trends in consumer preferences, regulation and innovation towards sustainable lifestyles are reshaping your sector and review your strategy to take advantage of emerging opportunities, contact BSR’s Director in Shanghai, Lin Wang.