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Reports | Tuesday December 3, 2019

Supporting Women in the Luxury Supply Chain: A Focus on Italy

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Luxury brands have committed to supporting women’s empowerment across their value chains. Women not only represent a significant share of luxury brands’ customers and employees—they are also a critical part of luxury companies’ supply chains. Italy, in particular, is well known for being a primary sourcing country for the sector, yet the status of women in the supply chain and opportunities to support women’s economic and social empowerment remain largely unknown and unaddressed.

Across many different countries, women face multiple barriers to achieving gender equality. These include:

• Economic barriers such as overall low labor force participation, high proportion in the informal sector, prevalence in part-time roles, challenges advancing in their careers and into leadership and decision-making roles, unequal compensation levels, and a disproportionate amount of unpaid care work.
• Social barriers such as high rates of gender-based violence and harassment, challenges accessing sexual and reproductive health services, migration and human trafficking risks, weak implementation of anti-discrimination laws, traditional roles of women in society and in the workplace, and hidden gender biases and social norms that are difficult to eradicate.

Italy is no exception. Working women in the country face numerous challenges in the labor market, and little is known about gender equality efforts and the gender gaps impacting women working in the Italian luxury supply chain. With this context in mind, Kering and its family of Italian brands, Bottega Veneta, Gucci, Kering Eyewear, and Pomellato, have engaged BSR to better understand the challenges, ambitions, and opportunities of women workers in today’s luxury supply chain in Italy and identify ways to support their success.

This paper aims to:

• Shed light on the status and challenges faced by women workers in Italy, particularly those working in the luxury sector.
• Identify areas of intervention and provide practical recommendations on actionable next steps, programs, and initiatives that luxury brands could pursue, in cooperation with their suppliers and relevant stakeholders, to address gaps and concerns raised by women workers and work toward the realization of gender equality in the workplace.

This paper summarizes the insights gained from a variety of activities conducted by BSR and Wise Growth between February and September 2019.

Blog | Tuesday March 7, 2023

Fashion Industry’s Four Largest Women’s Empowerment Programs Form New Initiative RISE to Scale Impact

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BSR’s HERproject, Gap Inc., P.A.C.E, CARE, and Better Work have come together to form a new initiative called RISE: Reimagining Industry to Support Equality in order to scale impact and accelerate equality for women workers in global garment, footwear and home furnishings supply chains.

The launch of RISE, ahead of International Women’s Day on March 8, comes as greater support is needed for women workers. It is estimated 75 percent of the 60 million garment workers are women who may experience gender inequality, and instances of harassment or violence at work, among other systemic barriers to empowerment and gender equity (source: the ILO). The COVID-19 pandemic and an increasingly difficult financial environment add to mounting pressure on women workers.

RISE will support global brands to empower women workers in their garment, footwear and home furnishings supply chains and have a wider impact on promoting gender equality in the industry as a whole. RISE will pursue its mission through three core strategies: (1) strengthening knowledge and skills for factory workers and managers, (2) transforming business practices to include gender equality, and (3) influencing public policy and other key actors.

RISE will build on the proven approaches and expertise of the four founding partners, delivered through a growing network of local partners in Bangladesh, China, Vietnam, Cambodia, Indonesia, India, Egypt and Pakistan. A unified approach will make it easier and more efficient for industry and wider stakeholders to drive accelerated and lasting impact on gender equality. It will also improve efficiency through the coordination of activities, a shared data system, and eliminating duplication.

The four founding partner organizations already work with 50 of the world’s largest apparel, footwear and home furnishings brands and have reached more than five million women workers globally. The ambition is to increase this to up to 20 million workers over the next decade. Companies who are supporting the development of RISE include Abercrombie & Fitch Co., Aje and Aje Athletica, AEO Inc (American Eagle and Aerie), BESTSELLER, Boden, Capri Holdings, Carter’s, Columbia Sportswear Company, Dôen, Hanna Andersson, Gap Inc., Inditex, Macy’s Inc., Marks & Spencer, New Balance, Primark, PVH Corp., Ralph Lauren, Tapestry, Inc., Target, The Children’s Place, The Walt Disney Company, The Warehouse (NZ), Victoria’s Secret & Co., VF Corporation, Williams-Sonoma, Inc.

RISE’s capacity building workplace programs aim to increase women workers’ dignity and equality in the workplace, by changing both behaviors and systems. The programs expand women workers’ choices and their ability and confidence to pursue their rights and opportunities. The training also engages male managers and coworkers to challenge social norms in the workplace. Program topics range from life skills such as communication and problem solving, general and reproductive health, financial health and security, freedom from sexual harassment and gender-based violence, and women's advancement and leadership.

RISE goes beyond workplace programs to bring positive change to the whole industry and influence policy improvements. It includes workers’ voices and representation at every level from governance to project implementation, ensuring that the work responds to women workers' needs and priorities. RISE has broad stakeholder involvement at its governance: brands, suppliers, labor organizations and unions, and women's movements.

Brands, buyers and suppliers can become a member of RISE and invest in a workplace program in their garment supply chain. Programs are currently operating in Bangladesh, China, Vietnam, Cambodia, Indonesia, India, Egypt and Pakistan.

“It’s time to step up support for women workers in global garment supply chains. RISE will benefit from the proven approaches of its founding partners and go even further to reach more women, expand to more geographies and create more change. Brands and suppliers can join RISE straight away to take serious action towards gender equality,” said Christine Svarer, Executive Director, RISE.

“In joining together to establish RISE, our industry can leverage the strongest elements from each of our proven empowerment programs to have deeper, broader and more consistent impact for the women who work in our supply chains,” said Sally Gilligan, Chief Growth Transformation Officer, Gap Inc. on behalf of Gap Inc. P.A.C.E.

"CARE is excited to be part of this collaborative effort to transform the apparel industry. RISE will bring together stakeholders across the industry—brands, suppliers, women's rights organizations and unions - to achieve systemic change driven by women’s voices," said Lona Stoll, VP Innovation and Impact, CARE.

“Joining BSR’s HERproject with other leading women’s empowerment programs is the logical and necessary next step to take these proven solutions to scale. As a combined force, RISE can navigate through the complex issues of gender equality in global garment supply chains and deliver real action and impact for both businesses and women workers,” said Aron Cramer, President and CEO, BSR.

“The potential of this partnership to influence change at all levels from the enterprise up is unparalleled, as it brings together such a wide range of brands and retailers, and industry stakeholders that all agree about the importance of collaborating to improve working conditions for women, particularly in the garment sector,” said Conor Boyle, Officer in Charge, Better Work.

Better Work is a partnership between the International Labour Organization (ILO) and the International Finance Corporation (IFC), a member of the World Bank Group. Better Work promotes decent work and better business in the garment industry.

CARE is an international humanitarian organization fighting global poverty and world hunger by working alongside women and girls.

Gap Inc. P.A.C.E. program provides women and girls in the global apparel industry the opportunity to thrive with foundational life skills, technical training and support to advance at work, in their lives, and in their communities.

HERproject is a BSR collaborative initiative that strives to empower low-income women working in global supply chains. Bringing together global brands, their suppliers, and local NGOs, HERproject drives impact for women and business via workplace-based interventions on health, financial inclusion, and gender equality.

Blog | Friday September 20, 2024

Addressing the Conflict Between Growth and Sustainability: Q&A with Jo Swinson

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Ahead of Climate Week NY, Jo Swinson, Director at Partners for a New Economy (P4NE), discusses the tension between traditional growth models and sustainability goals and how businesses can work together to explore new ways of measuring economic success.

Can you introduce yourself, and tell us how your background as a political leader informed your decision to lead Partners for a New Economy?

Since the earliest days of my political career, I have been convinced of the need for alternative measures of economic success. Back in 2006, I explored the flaws of GDP growth as an indicator of quality of life, and in 2009, I co-founded the UK Parliament’s cross-party group on Well-Being Economics. This idea wasn’t new—as far back as 1968, Robert F. Kennedy memorably noted: “It [GDP] measures everything in short, except that which makes life worthwhile.”

Later, I saw that the disconnect between the promise of economic prosperity and the precarity of people’s lives can lead to resentment of the current system. The ensuing backlash has torn at the fabric of our society and undermined faith in our democracy.

In 2020, I was looking for a new challenge. Combining my political experience with my long-standing desire to change economics, leading P4NE was a perfect match. The goal of an economy that serves people and the rest of nature is ambitious, but possible.

Growth is the foundation of our current economic system. How does our economy need to transform for humanity to thrive in the long term?

We’re primed to think of growth as a good thing—it’s deeply embedded in our economics and culture. As a society, we need to support the growth of many things—living standards and food security, health and well-being, the skills and creativity of our people, access to nature and green spaces.

For humanity to thrive, we need to understand and measure not just the quantity of growth, but also the quality of that growth: Is it in the sectors, regions, and countries where the growth is needed? What environmental risks is it driving or mitigating? How are the benefits being shared, both within our societies now and with future generations?

The World Economic Forum Global Risks Report (2024) cited the top risks over the coming 10 years as all being environmental: from extreme weather events to natural resource shortages.

We are biological creatures, and we depend on earth’s life-giving processes. We cannot survive without a thriving natural world: an economic system that destroys it is doomed to fail.

What we measure determines what gets done. Business knows this—it’s why KPIs exist.

We need a regenerative economic system where our success metrics include planetary health, equity and the well-being of all people, now and in the future.

In BSR’s recent report, The Elephant in the Sustainability Room, we explore the tension between growth and sustainability targets. Why is this topic so important for business right now?

We know business leaders are wrestling with this question. The competing demands of a science-based approach to sustainability and shareholder expectations of an exponential growth model create a genuine, systemic tension.

We know it’s hard. Business leaders are operating within the constraints of the current system, while looking ahead to a future that will inevitably be very different. We know from recent experience with the pandemic how rapidly so many aspects of the economy can be upended. That gives some insight into a future world of "polycrisis," with all the uncertainty that will bring.

The Institute and Faculty of Actuaries 2023 report The Emperor’s New Climate Scenarios said we could expect 50 percent of GDP destruction by between 2070 and 2090, given current rates of climate change. That’s a massive disruption, a huge loss of value, that will shape the coming decades. This is why this topic is so important now. Business needs to be ready to be part of the solution.

We often hear about regulatory and legal barriers to companies exploring alternative business models. What concrete actions can business take given these constraints? Are there different implications for companies in different sectors?

Business is increasingly scrutinizing its role in protecting our planet and the need to make a net-positive contribution to people’s well-being. There are many tools available across all sectors to build such practices: Climate Scenario Analysis with BSR, international standards of best practice from B Corp, and Doughnut Economics Lab’s Business Tools, to name a few.

Where there are legal or regulatory barriers, one of the most important things business can do is to advocate for change. When I was a UK Business Minister, it was so much easier to build the political momentum for legal changes—on corporate transparency on emissions, or stronger protections for vulnerable workers—when business voices were speaking out in support.

The key question is what does a successful business of the future look like? Anticipating a more volatile world with ecological crises now baked in, businesses need to think about whether their purpose, business models, governance and ownership structures are fit for the future. An example of a business with a future-focused purpose is Natura & Co, who have put their "Commitment to Life" at the heart of every aspect of their business targets. On governance, Faith in Nature have innovated by giving nature a seat on the board.

Much of the work being funded in this field is supporting economists, academics, and activists. What would you say to your peers in philanthropy about the need to mobilize the business sector to move “Beyond Growth?” What more can philanthropy do to galvanize bold action from companies?

To mobilize, we need to build understanding. Whilst everyone’s stake in the future is clear, even the words "beyond growth" can be divisive and misunderstood.

At the moment, it’s the most forward-looking companies and philanthropists who are taking the lead. Patagonia’s 2022 announcement that "Earth is now our only shareholder" signaled a reimagining of their corporate structure. Still unapologetically for-profit, they give 98 percent of those profits to The Holdfast Collective—a philanthropic nonprofit dedicated to defending nature.

Of course, no single business or person has all the answers. Philanthropy can create space for business to engage with going "beyond growth," to show leadership, and be celebrated for that. We need business to work with investors to shape a truly sustainable future, and we need legislative and regulatory changes to support and encourage the business sector in their collective efforts.

BSR works with its network of 300 members, as well as civil society, philanthropy, and government to advance bold, meaningful action on key sustainability issues at a systematic level. To explore this topic in greater detail, join BSR and Forum For the Future during New York Climate Week, where we will be hosting a dialogue between business and philanthropy on “Addressing the Conflict Between Growth and Sustainability.”

People

Rose Stuckey Kirk

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Rose Stuckey Kirk is senior vice president and chief corporate social responsibility officer for Verizon. She is responsible for the company’s CSR investment strategy and programmatic buildout, and as a senior leader in the marketing organization, oversees the strategic direction for all of Verizon’s social impact marketing activity. 

Rose’s background as a senior leader in various P&L functions has primed her to advance the social innovation work of Verizon. 

Rose is a member of the board of directors of BSR, Casella Waste Systems, and the World Childhood Foundation. She is a member of the Leadership Board of the Women and Public Policy Program at the Harvard Kennedy School, the Robert F. Kennedy Human Rights Leadership Council, the Executive Leadership Council, and C200—a preeminent global organization for women business leaders. Rose is also a Vanguard member of the NationSwell Council, a membership community of service-minded leaders. 

Rose held former positions as Chair of the Board, Executive Committee Chair, and Governance Committee, member of Dress for Success Worldwide, as well as Strategic Planning Chair, and Finance Committee member for Gill Saint Bernard’s School.

An award-winning journalist and the executive producer of the documentary Without A Net: The Digital Divide in America, Rose holds a BS in Journalism from Arkansas State University and is completing a Masters in International Affairs at Washington University in St. Louis, MO. 

Blog | Thursday September 30, 2021

Accelerating Action on SDG 5 across the Jewelry Industry

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Women drive 90 percent of demand for jewelry industry products and are present across the entire value chain. However, women’s roles and opportunities in the jewelry supply chain are conditioned by gender inequalities and discrimination. 

Furthermore, the COVID-19 pandemic has slowed and, in some cases, reversed progress toward gender equality across industries. Many of the hardest hit industries, including retail, are dominated by women. Jewelry retail in particular is one of the hardest-hit consumer goods categories, with sales dropping as much as four-fifths in certain regions in the early stages of the pandemic, and the impacts have cascaded throughout the industry and its supply chain, worsening many of the structural inequalities and challenges women already face.  

In 2020, UN Women launched a ground-breaking campaign: “Generation Equality: Realizing women’s rights for an equal future,” marking the 25th anniversary of the Beijing Declaration and Platform for Action and bringing together multiple generations of women’s rights activists. This culminated in July 2021 in Paris, where business, governments, and civil society committed to an ambitious global acceleration plan to achieve gender equality by 2030. This momentum and the resulting "she-cession" of the global pandemic increased the urgency for business to advance gender equality. Forty companies made individual and collaborative commitments to push for gender equality across their value chains.

“We acknowledge issues on gender equality are complex and deeply rooted, but strongly believe business can play a critical role in changing attitudes, building responsible practices throughout the supply chain, and creating inclusive and safe work environments for everyone.”

Iris Van der Veken, Executive Director of the Responsible Jewellery Council (RJC)

As part of Generation Equality, BSR, in partnership with RJC, engaged with a wide range of industry stakeholders across the globe through workshops, regional roundtable discussions, and surveys. The resulting report, “Gender Equality Report: The time is now to accelerate SDG 5, achieve gender equality, and empower all women and girls,” sheds light on the current state of corporate efforts to advance gender equality in the jewelry industry. The report presents four major insights:

1. Enabling small and medium-sized enterprises (SMEs) to advance toward gender equality is a key opportunity for the entire industry.

Gender equality efforts begin with high-level leadership commitments and transformational business policies that can set the pace for integrating gender equality across business value chains and teams. However, one of the biggest barriers toward achieving these commitments and policies across the industry is organizational size. SMEs often lack internal capacity, expertise, and/or resources to develop formal policies, and gender equality is not prioritized as clearly as in larger organizations that face more expectation to act and commit to external initiatives. As many as 35 percent of RJC members are SMEs who have not developed external commitments or vision statements, and 21 percent of RJC members have shared that they have limited formal policies. However, many SMEs have made internal commitments, have adopted informal policies, or promote inclusivity in other ways, such as company charters.  

2. Social norms on gender and structural factors in companies are impacting access to talent.

In the jewelry industry, accessing and hiring diverse talent, particularly women, is challenging.  This issue is even more acute in particular regions, in the mining industry, and for roles in logistics or STEM-based functions. However, some companies have begun to address these barriers to gender diversity.  So, while many companies still focus on "hiring the best person for the job," which may hamper efforts to increase gender diversity, the survey revealed that 24 percent of RJC member companies are reviewing their job positions and requirements to remove potential biases. In addition, many other opportunities exist to implement hiring, development, and retention plans. Practices, such as unconscious bias trainings for hiring teams, hiring and promotion target-setting, and creating focused development and learning opportunities for underrepresented groups, are still limited across members, meaning there is significant scope for improvement. 

3. Globally, the conversation on diversity in the industry is centred on gender equality.

However, in certain regions, the approach is shifting to broader diversity and inclusion dimensions, such as focusing on racial justice and ethnic diversity in North America and disability and age in Europe. Because different dimensions of identity can create layers of discrimination for an individual, not all women have experienced the same level of progress toward gender equality in recent years. Companies should consider taking an intersectional approach to gender equality and understand how different dimensions of identity intersect with one another. However, a shared challenge across many companies in the industry is where or how to start, as these issues are highly culturally sensitive and the regional context is critical to understanding the challenges and opportunities. 

4. Organizations have an opportunity to amplify their impact and drive change in the industry by looking at their entire value chain.

Businesses can enable more diversity in their value chains by taking a range of actions, including actively sourcing from entities that are led and/or owned by women or other underrepresented groups, focusing on worker well-being throughout their supply chains, and using their marketing practices to challenge stereotypes. However, value-chain initiatives in the industry are still largely limited. Only 2 percent of surveyed companies have commitments to procure from women-owned or minority-owned businesses. Lack of market access for smaller and/or women-owned businesses continues to be a significant barrier to value-chain diversity.

Where to from here?

Our dialogues and other engagements make it clear that industry-wide collaboration will be essential to tackling the systemic challenges to achieving gender equality. BSR and RJC are committed to supporting and stirring this industry-wide collaboration and furthering this dialogue with industry stakeholders to promote progress within individual organizations as well as the broader industry. 

We also encourage jewelry industry organizations to explore the RJC report for more insights on how to move the gender equality agenda forward, including case studies and best practices from industry leaders. And as always, we welcome the opportunity to work with companies and other stakeholders, either directly or as part of an industry collaboration. Click here to learn more about the value of RJC membership, its code of practice, and how to get involved.

Blog | Thursday June 9, 2022

Beyond Audits: Six Ways to Manage Human Rights Risks in Supply Chains

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According to the UN Guiding Principles on Business and Human Rights (UNGPs), companies are responsible for conducting human rights due diligence to manage the most salient human rights risks across their operations and supply chains. To assess workplace conditions like forced labor, child labor, low wages, discrimination, and harassment, for example, companies have historically relied on social audits from their Tier 1 suppliers. However, since the Tazreen Garment Factory and Rana Plaza tragedies in Bangladesh, social audits are increasingly scrutinized. Companies are now expected to go “beyond” auditing by adopting more robust approaches to address human rights violations in their supply chain.

Often treated as a “pass/fail” compliance exercise, traditional social audits aim to capture information within a limited timeframe and involve little effort to understand systemic issues or plans for ongoing supplier engagement. “Beyond audit” approaches, on the other hand, seek to engage suppliers through training and capacity building, integrating worker voices, strengthening management and governance systems, and driving greater transparency.

While many recognize the need for a systemic shift away from audits, there is no easy alternative. Below are six points for companies to consider when addressing human rights risks through a holistic approach: 

1. Investment in Governance Structure

Audits are typically managed by third parties, whereas “beyond” audits call for companies to invest in internal governance models to oversee human rights due diligence. An effective “beyond” audit governance structure involves coordination with the procurement team and the implementation of a Supplier Code of Conduct, which requires suppliers to execute their own human rights-related policies. It is essential to develop a strategy that is based on the company’s specific industry context and operations. One example of this is hiring regionally placed, in-market employees, who have a better understanding of local contexts, to oversee supplier relationships.

2. Collaborative Stakeholder Engagement

Partnering with suppliers to understand their challenges, identify solutions, and develop shared commitments has a longer-lasting impact than standalone audits. Forums and stakeholder engagement tools, such as mobile technologies that allow anonymous feedback from workers, can connect buyer companies, suppliers, workers, communities, and governments to increase visibility into supply chains. On-the-ground, direct engagement with suppliers through on-site visits helps companies identify risks and develop culturally and context-relevant programs in collaboration with suppliers. For example, companies can facilitate greater communication between supplier sites and proximal communities to help to foster trust and ongoing engagement.

3. Inclusion and Enforcement of Standards

Aligning human rights policies with international standards, integrating them into supply chain management, and holding suppliers accountable is critical. International human rights standards, such as freedom from slavery or servitude, the right to effective remedy, and the right to freedom of opinion and expression, should be fully embedded into procurement processes. Adherence to these standards should be incorporated into the evaluation of supplier performance and purchasing decisions. Concurrently, buying teams should be trained in responsible buying practices to mitigate the risks often caused from unrealistic deadlines and squeezed prices. Companies should determine the appropriate strategy for termination or remediation of suppliers based on their supplier base. For example, some companies may avoid terminating contracts when violations occur because of limited access to more suppliers, while others may focus instead on remediation and improvement programs.

4. Capacity Building and Incentives

Companies are increasingly investing in capacity building and supplier incentives. These initiatives facilitate knowledge exchange, provide access to tools, and empower suppliers to take ownership of systemic issues and challenges. 

Leading companies also recognize that the most effective remediation strategy includes in-person trainings and hands-on support to strengthen management systems. This approach, unfortunately, has not been possible of late due to the COVID-19 pandemic, driving companies to turn to online engagement and multilingual e-learning programs. The uptake of online trainings has been a hurdle, which is why targeted trainings and incentives, such as preferred contracting terms, are essential. 

5. Supplier Portals and Grievance Mechanisms

Supplier portals are online platforms that serve as a one-stop shop for suppliers to access codes of conduct, supplier documentation, grievance mechanisms, capacity building tools and trainings. Requiring business partners to register their supply sites on such a platform can improve adherence to human rights principles and streamline monitoring. 

These portals have also been where grievance mechanisms are offered to suppliers and their employees. Ensuring that workers in the supply chain have access to a confidential and anonymous grievance mechanism is essential to a “beyond” audit approach. However, many companies have shared that their grievance mechanisms are ineffective and not widely used. New models are being developed to address this gap, including on-site and supplier-led grievance mechanisms, as well as whistleblower technologies. 

6. Change Management and Methodology

New technologies are emerging to replace and augment traditional auditing mechanisms. These technologies can increase information flow to consumers, investors, and other stakeholders by employing tools to map supply chains, assess risks, trace products, and act as grievance mechanisms. Some examples include near field communication (NFC) devices, which enable peer-to-peer communication through secure forms of data exchange. Another is blockchain, which operates as a shared ledger to record transactions and track assets in a business network with a decentralized database. Testing these solutions in-house before expanding across the supply chain is best practice. These tools are promising, yet technology cannot address the root of human rights risks without change management at the leadership, buyer, and supplier levels.  

Managing human rights across supply chains continues to be an ongoing challenge for companies across all industries. While social audits are one way to gain insights into working conditions in supply chains; there is mounting evidence of their limitations. To ensure that social audits are effective and meaningful, companies must go beyond the traditional audit approach by embracing these best practices to achieve positive outcomes for workers and communities.

Case Studies | Wednesday May 15, 2024

Conducting a Double Materiality Assessment

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Introduction

BSR worked with Assurant, a global business services company that supports, protects, and connects major consumer purchases, to conduct a global double materiality assessment aligned with leading reporting standards and frameworks. Assurant and BSR used the materiality assessment as an opportunity to improve the company's understanding of the double materiality process and facilitate discussions with senior business leaders around stakeholder priorities and strategic implications at a regional and global level. This project enabled Assurant to confirm its strategic priorities ahead of its sustainability strategy refresh and prepare for upcoming regulatory reporting requirements like the EU Corporate Sustainability Reporting Directive ("CSRD"), given the company's presence in Europe.

Background

Assurant is a leading global business services company that supports, protects, and connects major consumer purchases through two operating segments: Global Lifestyle and Global Housing. A Fortune 500 company with approximately 13,600 employees in 21 countries, Assurant partners with the world's leading brands to deliver innovative solutions through mobile device offerings, extended service contracts, vehicle protection services, renters’ insurance, lender-placed insurance products, and other specialty products.

The Challenge

Assurant recognized the need to refresh its materiality assessment using a double materiality approach, which considers how sustainability topics influence a company's enterprise value (“financial materiality") and how the company's activities related to sustainability topics affect the environment and society (“impact materiality"). In recent years, the sustainability field has been moving away from methods that are based on stakeholder perceptions and adopting methods based on impacts. CSRD's double materiality requirement has dramatically accelerated that shift. What was once considered a nice-to-have is now non-negotiable for many companies. Adopting the concept of double materiality clarifies that many sustainability topics may not impact enterprise value, but companies still need to address them because these topics impact the environment and society, including affected stakeholders. Assurant understood the strategic value of this opportunity and wanted a partner to work closely with them on a robust assessment aligned with best practices.

With over 30 years of experience in the sustainability and human rights field, and as an early adopter of double materiality, BSR has worked with 250 companies on materiality assessments. BSR's methodology pulls from best practices in the materiality and human rights fields to systematically identify, define, and prioritize a company's positive and negative impacts on enterprise value and the environment and society, by assessing the likelihood and severity of the impacts to occur. BSR's approach to double materiality and emphasis on authentic stakeholder engagement resonated with Assurant's desire for a strategic and thoughtful process instead of a solely compliance-focused exercise.

BSR’s Response

As a company headquartered in the US with operations in the EU that are subject to CSRD, Assurant wanted to ensure that its materiality assessment incorporated a European lens as well as focused European stakeholder engagement. BSR worked with Assurant to define an efficient approach that would result in a global view, while also providing sufficient regional nuance. At the beginning of the project, BSR developed a long list of relevant sustainability topics and descriptions of impacts on business and impacts on environment and society at global and regional levels using European Sustainability Reporting Standards (ESRS) guidance, other reporting frameworks, peer reviews, strategic documents, and prior materiality results. While a high-level materiality assessment based on stakeholder perceptions can uncover impacts to enterprise value, BSR's work with Assurant and other organizations has revealed that more in-depth research using various data sources is needed to meaningfully capture impacts on environment and society by the company or its industry.

As part of our process, we engaged 45 internal and external stakeholders to analyze perspectives and emerging expectations on key sustainability topics and actual or potential impacts, risks, and opportunities (IROs). For materiality assessments, it is critical that companies involve a wide range of stakeholders in the process of identifying and assessing IROs. Internal stakeholders should include leaders and employees across the organization, covering the regions in scope, and a company's various business lines. External stakeholders commonly include clients, partners, suppliers, industry groups, rights-holders, thought leaders, NGOs, and trade unions. Based on findings from the stakeholder interviews, we refined our definitions of the key impacts associated with each topic on enterprise value, environment, and society.

The topics were ranked based on impacts to enterprise value and impacts on environment and society following CSRD requirements and using a framework that was aligned with Assurant's ERM system. The results were plotted on global and European matrices, to call out the regional nuances. The matrices were accompanied by rationale for the topic placements and the key differences between the global and European results. BSR conducted two virtual interactive workshops with Assurant's European and global executive leadership teams to validate results and discuss strategic and reporting implications.

Impact

BSR conducted a robust double materiality assessment to prepare Assurant for its upcoming strategy refresh and mandatory disclosure obligations. The finalized materiality results clarified Assurant's highest priority topics and brought consistency between global and regional sustainability strategy and reporting. This process helped to broaden the organization's knowledge of sustainability topics, related impacts, risks, and opportunities, and led to an improved understanding of and alignment with the double materiality process, as defined by CSRD. The meaningful conversations with various stakeholder groups allowed Assurant to strengthen its relationships with key partners and identify future opportunities for collaboration. As a next step to this work, Assurant is translating the findings from its materiality assessment to develop goals, targets, and action plans for its highest priority topics.

We recognized the value of extensive stakeholder engagement as a key input for the assessment, offering meaningful dialogue with our senior leadership on priority matters and amongst several key clients on common sustainability focus areas. The BSR team effectively facilitated much of the key discussion throughout the assessment's stakeholder engagement and felt like an extension of our Sustainability Team.

- Michael Bellantis, VP of Sustainability, Assurant

Conclusion

A double materiality assessment should not be viewed as a mere tick-box exercise, but a valuable strategic endeavor that will serve as the foundation for a company's sustainability strategy and reporting. Not only does it position companies to adapt to upcoming and future disclosure regulations, it also leads to stronger internal and external stakeholder relationships and more resilient business strategies that focus on long-term value.  

Get in Touch

Interested in learning more about BSR's approach to double materiality assessments? Please contact BSR's Transformation Team.

This case study was written by Megan Coffey and Beth Richmond.

Blog | Thursday June 26, 2025

Material, but Not Always Strategic: Why the Difference Matters

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The context for sustainability strategies has become increasingly complex as businesses face changing geopolitical and trade dynamics, growing scrutiny of sustainability initiatives, and a shifting regulatory environment. Amidst these developments, sustainability strategies require vision, clear focus, strategic foresight, and strong alignment with business value drivers and the company's overall strategy, while delivering societal value and impact. If these factors are in place, a clear and simple narrative, sharing how the company is addressing societal impact alongside business value, can easily follow and is essential to give meaning to employees as well as external actors, including customers, investors, suppliers, communities, and affected stakeholders.  

Make Materiality More Strategically Useful  

A materiality assessment has historically been the most common entry point for sustainability strategies. Materiality’s origin lies primarily in its role as an exercise to inform disclosure. However, these assessments remain strategically valuable as they help define the sustainability topics, risks, and opportunities impacting the company, and the company's most significant impacts on society and environment.  

Since conducting a double materiality assessment (DMA) is resource intensive, it is essential that companies leverage the investment in the exercise to inform strategic decision-making. This includes asking your internal and external stakeholders additional questions on various topics, including what they feel is strategic for the business priorities; how business value drivers, such as revenue growth and operational efficiency, link to or rely on impacts on people and the environment; and how they feel issues may evolve over time. A good DMA aligns with a company’s existing enterprise risk management (ERM) process, considers other assessments that have already been conducted, and reflects the company’s business strategy and governance processes. Opportunities and positive impacts identified through the DMA should be connected to the core business value drivers. They should also feed into strategy setting or refinement, including goals, targets, programs related to strategic focus areas (such as initiatives on climate or inclusive business), and accountability on those topics by leadership.  

If conducted comprehensively, a DMA can serve as a strong foundation for shaping a focused and credible sustainability strategy aligned with stakeholder expectations and long-term business goals. A materiality assessment should not be perceived as a "compliance-only" exercise; rather, its results should be complemented with additional insights, such as key strategic business differentiators compared to other companies, to move from "compliance requirement" to "core strategy informant."  

Distinguish Strategic Issues from Material Issues  

When setting sustainability strategies, companies often fall into the trap of aggregating all material issues into the broad bucket of “ESG” and calling it a strategy. More tactical insight is needed to refine the list of material issues to a list of strategic issues. This refinement process should draw from the overall sustainability vision, the business strategy, and strategic foresight of the macro context (which includes global trends, economic shifts, regulatory developments, climate change, geopolitical dynamics, social movements, and technological innovation). 

For example, while any robust financial materiality assessment will ground itself in core business drivers, a topic’s current or future performance does not determine whether the topic is material. Gaining a greater understanding of the direct links between business strategy and performance with material topics is crucial to creating a sustainability strategy that is embedded in and supportive of business strategy. Here, insights such as plans on future product or market growth, or innovation priorities, may be helpful. Furthermore, customer insights and employee surveys show us that some material issues, like product safety and workplace safety, may resonate more with customers and employees since they align with business values like integrity, quality, safety, ethics, longevity, and accessibility. 

Another key consideration is the impact of macro conditions, like geopolitical volatility, market shifts, and plausible future developments. These may suddenly shift business strategy or sustainability impacts, risks, and opportunities. Strategic foresight can be used to better understand current volatility and identify potentially unforeseen risks or opportunities, helping to root strategy in longer-term transformations, while navigating and adapting to short-term shocks.

As companies have different approaches of setting a threshold for materiality (aligned with a company’s enterprise risk framework or not), this should also be considered when reviewing the sustainability topics in the context of strategy. Together, with a clear understanding of impacts, all these components should steer a company toward its unique position and clear narrative on business and societal value.    

This process of designing or refining the sustainability strategy could also uncover topics that are material but not necessarily strategic. For example, water pollution may be a material topic for a company with water use and discharge in its operations or value chain due to its clear environmental impact and potential financial and reputational risk, requiring reporting under the CSRD. However, this does not mean that it is a strategic topic or driver of long-term value and differentiation for this company, and it could be addressed through robust environmental management systems rather than as a strategic priority.  

On the other hand, sustainable product innovation (such as co-branded eco-friendly packaging) may be strategic for market positioning and future consumer appeal, but if these initiatives do not present significant risks, impacts, or financial implications, they may not be classified as material in a DMA—meaning they are managed internally, but are not subject to mandatory reporting.  

Ensure That Material Issues Are Still Addressed and Managed 

Leaving a material topic outside of your business or sustainability strategy does not necessarily mean it will be neglected. There are several ways that issues can continue to be addressed and managed without declaring them as the most strategic issues. For example, the issue of pollution can be addressed through management agendas, policies, and procedures. Joining or initiating a collaboration among peers is another way to show commitment and enable progress, especially for more nascent or systemic issues such as plastic pollution. It is helpful to distinguish between issues that are strategic, which require management, and issues that require reporting, and then determine the required actors and audiences for each of these issues.   

At a time when sustainability and business strategy are becoming increasingly intertwined, companies must go beyond compliance and use materiality as a lens for strategic clarity. By distinguishing between what is material and what is truly strategic, businesses can focus their efforts where they matter most, increasing impact, resilience, and long-term value.  

Interested in translating your company’s materiality insights into clear, credible strategies that meet stakeholder expectations? Reach out to BSR's Business Transformation team for more information on building business resilience and collaborating with peers to create systemic change.

Blog | Tuesday January 14, 2020

Five Tips for Setting Bold Sustainability Goals for 2020 and Beyond

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2020, which for so long seemed like a distant future, is here. As we reflect on the past decade of sustainability goals, we recognize the substantial progress: commitments for financing renewable energy in developing countries have witnessed a tenfold increase since the early 2000s; 600 million more people have connected to the mobile internet since 2015, the majority in low- and middle-income countries; and extreme poverty continues to fall along with child mortality rates. Unfortunately, these encouraging trends ultimately do not create enough momentum to achieve a just and sustainable world. Progress on many of the Sustainable Development Goals (SDGs) has been too slow and, in some cases, continues in the wrong direction: both hunger and greenhouse gas emissions continue to rise.

And now, we are in the decisive decade. As BSR CEO and President Aron Cramer put it in his 2019 annual letter, “[We’re now entering] the decisive decade of the 2020s. The next 10 years will be decisive for business, and for all of us. We will either deliver on the [SDGs] or we won’t. We will peak emissions in line with the Paris Agreement or we won’t. Business will regain public trust or it won’t. We will re-establish social mobility and reduce income inequality or we won’t."

So, how can companies make sure they’re on the right side of history?

In order to achieve the change we seek, it is clear we need business. But the tactics used by businesses to set goals in the past—benchmarking and forecasting—are inadequate. Incremental improvements in sustainability, while still relevant, are no longer enough. We need business to be willing to boldly tackle the complex challenges that society faces by committing to progress, even without a concrete plan. We need moonshots. Increased ambition is not just the way to achieve the SDGs—it’s also the best way to create truly resilient business strategies.

Increased ambition is not just the way to achieve the SDGs—it’s also the best way to create truly resilient business strategies.

In practice, we know that committing to a bold goal is not an easy task, but here are three reasons you should persevere:

• The Ethical Imperative. As we just outlined, society cannot achieve the SDGs without the full participation of business. High-quality employees gravitate toward work with a purpose and companies that they feel make a positive difference in the world.
• The Business Imperative. The climate for business is changing rapidly, and companies that are not proactively helping to shape the new paradigm risk obsolescence. Bold goals help to hedge against risks and spark disruptive innovation. Plus, companies that set innovative goals set the bar for good performance and often receive more support from partners—NGOs, foundations, governments—in attaining their goals than companies that don’t.
• The Stakeholder Imperative. Key stakeholders (employees, customers, investors, local communities) expect bold action. With the proliferation of sustainability data platforms and a rapidly increasing set of corporate “report cards” emerging, it’s more important than ever to take a visible leadership role.

You may be asking yourself: But what if we set this big goal and we fail? The answer is that it’s okay. We have seen time and again that stakeholders—even investors—are more likely to celebrate companies for setting a bold time-bound sustainability goal than penalize them for missing their targets. In fact, in today’s business operating environment, stakeholders are more likely to look askance if you hit a modest sustainability target early than if you miss an ambitious target.

Stakeholders—even investors—are more likely to celebrate companies for setting a bold time-bound sustainability goal than penalize them for missing their targets.

We’ve talked a lot about the why, so now let’s tackle the how. The tools that businesses have used for the past decade are no longer fit for purpose, so how are leading companies going about increasing their ambition?

1. They’re focusing on what matters most. The achievement of a bold goal is highly resource-intensive. Therefore, companies should be highly selective in determining where to go big and where to focus on continuous improvement. Big goals should be centered around issues that are highly material and core to the business. Most companies place no more than 10 big bets, with many focusing on just one or two key issues.
2. They’re seeing the big picture. A context-based goal is any goal that considers a company’s “fair share” of a societal challenge. For example, science-based goals, such as science-based climate targets, are a subset of context-based goals. Companies are enhancing their understanding of context using science (e.g., context-based water targets), international frameworks (e.g., the SDGs), or good old-fashioned stakeholder engagement. The thing they have in common is that they’re setting goals by determining what needs to be accomplished, not by determining what they think they can achieve.
3. They’re starting at the end and working backward. Whereas forecasting starts from the past and extrapolates forward to see where we might end up in the future, backcasting starts with an ideal future state (e.g., achievement of an SDG) and works backwards towards the present to identify what would need to happen to get there. Leading companies are defining the impact they want to achieve and using backcasting to understand the steps needed to get there.
4. They’re building holistic approaches based on quantifiable impacts. According to the Impact Management Project (IMP), impact management is the ongoing practice of measuring our risk of negative impacts and our positive impacts so that we can reduce the negative and increase the positive. For example, a company with a bold climate goal should consider all its impacts on climate—from direct emissions, to supply chain emissions, to policy statements, and lobbying activities. The quantification process adds rigor as it necessitates the development of a clear problem statement and theory of change, with a thorough understanding of the different dimensions of possible company impact. 
5. They’re not letting the perfect be the enemy of the good. Leading companies understand that their goal will not be perfect, but they act anyway with the understanding that they may need to course-correct over the life of the goal as they get new information, as the business changes, and as the operating context evolves. To that end, it can be helpful to pair a set of bold goals with a longer time horizon (e.g., at 10 years) with a set of achievable shorter-term milestones (e.g., three to five years). In addition, business can bring stakeholders on the journey by transparently reporting progress, both the successes and the challenges, at regular intervals. This will then help them understand if you need to make an adjustment to the original goals. 

It’s clear that we face a new climate for business—environmental and societal risks have overtaken economic and geopolitical risks in terms of both likelihood and impact in the World Economic Forum’s annual global risk reports. The critical role of business in successfully addressing societal and environmental challenges and the imperative for business to ensure a stable operating environment are increasingly apparent. 

The bottom line: go big (but credible) or go home—your business, your stakeholders, and the world will thank you. We look forward to working with businesses committed to a just and sustainable world on setting bold goals for 2030 and beyond. Please feel free to connect with us to learn more.

Blog | Monday March 16, 2020

Business Lessons from Phase One of the COVID-19 Pandemic

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How quickly life can change.

We are only in phase one of a pandemic that has changed the rhythm of daily life like no other recent event. As we take time to think first of the health of our families, friends, and communities, we are already learning lessons that will help us to navigate the urgent trials we face today as well as the fundamentally important challenges awaiting us once the worst of the pandemic passes.

Here are five lessons to guide us through these turbulent times and the uncertainties which lie ahead.

1. The virus makes clearer than ever that the social contract in many places is not fit for purpose and needs to be reformed.

The social contract, meaning the roles and responsibilities of government and business and the needs of citizens and employees, is being tested in an extreme way right now, but it was already clear that it was not fit for purpose before the pandemic struck. In the wake of the pandemic, the lack of access to health care in the United States has come into even sharper relief, this time in a potentially devastating way. We have also seen examples of the social contract being adapted, as with Denmark’s move—through tripartite discussion between government, business, and trade unions—to extend benefits to help Danes get through this difficult time. It is also interesting to see how different societies accept data sharing and transparency, which trade some privacy for increased protection. Businesses should certainly step up to help their staff sustain themselves in the context of much economic activity apparently being stopped. And while we are seeing in real time how well the social safety net functions, there are also long-term questions that business would do well to address more forcefully after this crisis is behind us. BSR has launched an effort calling for a modernized social contract for the 21st century, with more attention to the changing nature of work, access to education and skill development, and the financial stability of our pension systems, amongst other issues. The COVID-19 pandemic reveals this to be deeply relevant for business and society and can serve to catalyze more business action to ensure our social contracts are fit for purpose. The business responses to the crisis have in many cases been excellent: this leadership can also be applied in non-crisis situations.

2. Resilience is not just a catchphrase; it’s a necessity, and it’s having its moment.

Every single Board of Directors should learn from this global challenge and invest more time and thought in exploring where its business faces other risks. There is little doubt, of course, that climate change could deliver a blow to many companies that is as profound as COVID-19, but with far more lasting impacts. We have also seen unexpected political shifts over the past few years, and businesses that have assumed broad support for a globalized economy have seen their plans upended. Resilience in the face of fast-changing attitudes and actions on the part of a company’s workforce also present questions of fundamental importance. And we also know that political change can come overnight and test our models. In many ways, the rise of ESG investing is asking one simple question: is your business resilient in the face of massive change? We are experiencing in real time how hard it can be when the answer is no.

In an era when powerful political leaders call for walls and barriers and play to publics who can be swayed in that direction, this difficult episode teaches us the importance of collaborative solutions.

3. We must not turn our backs on our interdependent globalized world.

It should go without saying that we are all connected and interdependent; the virus proves just how true that is. But in an era when powerful political leaders call for walls and barriers and play to publics who can be swayed in that direction, this difficult episode teaches us the importance of collaborative solutions. Credit should be given to French President Emmanuel Macron for convening a virtual G7 Summit and to the tireless workers at the World Health Organization for providing valid and valuable information, enabling testing, and supporting health systems that need it most. In short, we need each other, and crises often remind us of that. This one certainly should be doing exactly that. It is folly to suffer the negative consequences of our connectedness without maximizing the benefits. Business has a strong interest in advocating for open societies, effective public governance, and the rules-based international system that has come under attack in recent years.

4. Futures thinking may be the most essential tool we have, so let’s use it.

One of the best ways to build a resilient strategy is to employ futures thinking. BSR launched its Sustainable Futures Lab in 2017, and we have worked with many companies and other partners to build scenarios to help them to map and understand possible pathways to create more desirable future outcomes. This is no academic exercise, as we now see. Indeed, one in a set of climate scenarios we began developing late last year began with an animal-borne virus emerging from China to undermine economic and human health globally. The steps called for in the Task Force for Climate-Related Financial Disclosures (TCFD) embrace scenarios as a core of TCFD disclosures. The concept underlying the TCFD should be extended well beyond climate, to ensure that companies can prepare for the diverse array of futures that may well emerge.

The need for progress on climate and other environmental challenges don’t vanish during a recession. The need to invest in communities and people whose economic circumstances are diminished only grows more important.

5. Action on climate and the SDGs cannot be put off.

The world’s attention is quite rightly focused on the urgent need to save lives and avert immediate economic distress. But we are here for the long term also. We need both to address this shock in the first year of the decisive decade and remain 100 percent committed to building the world we are committed to building in 2030. Even as every company, large and small, is understandably focused on the here and now, this is a time when business leaders and companies should speak out to reinforce the need to make significant, tangible progress towards the SDGs. And even if the virus leaves a recession in its wake, it is essential that business remain focused on achieving the SDGs. The need for progress on climate and other environmental challenges don’t vanish during a recession. The need to invest in communities and people whose economic circumstances are diminished only grows more important. And the march of technology needs to be aligned with human rights and ethics regardless of which direction global stock markets head.

We have spoken about the “new climate for business” over the past year as we entered this “decisive decade.” As we work through this rocky start to the new decade, it is essential that we remember the central importance of staying committed to our long-term goals, while adjusting to an altered reality that has much to teach us when we inevitably emerge from this crisis.