Blog | Friday March 15, 2019

Three Ways for Companies to Promote Women’s Leadership across the Supply Chain

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More than 90 guests joined BSR's HERproject, The Estée Lauder Companies, Inc., Nordstrom, UGG, and Williams-Sonoma, Inc. for a special event on women’s leadership on the eve of International Women’s Day last Thursday, March 7, 2019. In two engaging panels, leaders from business, politics, development, and media explored the challenges and opportunities for empowering women to progress as leaders.  

For companies, three clear opportunities emerged.  

Companies Can Act to Demonstrate They Value Women’s Leadership 

All brand speakers emphasized the importance of walking the talk at the corporate level. From Pottery Barn, whose CEO is a woman and whose overseas leadership is 67 percent women, to The Estée Lauder Companies, Inc., which this year enacted a 20-week parental leave policy for men and women in the United States, panelists emphasized the need for companies to live their values and demonstrate a belief in women as leaders.  

This also extends to how leaders promote and nurture women within their organizations. Andrea O’Donnell, President, Fashion Lifestyle, Deckers Brands (UGG), pointed out that “our responsibility is to allow women to find their voice and their confidence, and be active mentors and cheerleaders for them”—a sentiment shared by Nancy Mahon, Senior Vice President, Global Corporate Citizenship and Sustainability at The Estée Lauder Companies, Inc., who highlighted the need for women to “throw the ladder back down.”  
 

Systems Need to Be Changed to Enable Women to Succeed 

While individual leaders and companies have significant roles to play, panelists also highlighted the many barriers that might stand in the way of women becoming leaders—or prevent them from fulfilling their potential once in leadership positions. Citing her own experiences of pregnancy and childbirth, Penny Abeywardena, Commissioner for International Affairs at the New York City Mayor’s Office, commented on the inadequacy of existing structures: “Women make up more than half of the American workforce, but the policies that dictate our experience in the workforce are from 50 years ago.”  

For Maria May, Program Officer at The Bill & Melinda Gates Foundation, these challenges affect how women progress into leadership: “The balancing that women have to do, and how silently they do it a lot of the time, leads women to evaluate opportunities differently and require different kinds of support.” And Jenny Hollander, Deputy Editor at marieclaire.com, highlighted the complacency that may develop as women achieve leadership roles: “People assume that the problem goes away when you put women and minorities into positions where they should be. I think you also need to make sure you are giving them the tools to succeed, because otherwise you are dooming them to fail.”  

For companies, it is therefore critical to maintain a focus on the specific challenges that women may face once in leadership positions, such as time poverty, lack of voice, and social norms that hinder career progress.  

Companies Can Influence Peers and Partners for Greater Impact 

Beyond the corporate office and across the supply chain, barriers to women’s leadership are greater still. Latha Ramakrishnan, an expert on women’s empowerment programs in India, highlighted the situation of many low-income women workers in India: “A woman faces limited access to the outside world and to education, and she has a limited voice. A girl has always to be under the shadow of a male person: her parents, then her husband, then her son.” This discrimination has knock-on effects, with girls and women less likely to acquire critical skills, more likely to accept low positions in business, and less likely to believe in their own abilities.  

Panelists, however, felt that change was possible through partnerships. Abeywardena highlighted how “the private sector has a beautiful opportunity to partner with governments to help develop and shape policies” and asked: “What does it look like if we work as a collective to move it for the entire community?” Mandy Seidel, Vice President, Global Sourcing at Pottery Barn, explained that through partnerships with suppliers and local experts within HERproject, Pottery Barn has created a happier and more stable workforce: “One of our largest manufacturers has run HERproject. They wrote to me and said that because of the investment we have made and that they have made in the workforce, they saw 100 percent worker retention rate after Chinese New Year, versus 80 percent in previous years.”  

Despite the ongoing challenges, panelists were optimistic about the future of leadership for and by women. Through individual and collective action, companies have the chance not just to promote women as leaders but to become leaders on women’s empowerment—and there has never been a better time to do so. As Hollander put it, “there is huge opportunity in this space where everything is changing so dramatically.” 

If you would like to find out more about how your company can empower women across your supply chain, please contact our team of experts.  
 

Blog | Wednesday February 22, 2017

Building Responsibly: Turning Challenges to Opportunities in Engineering and Construction

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The engineering and construction industry, which represents US$8.4 trillion of economic activity, relies on large numbers of low-skilled workers and, as such, is a major provider of formal employment opportunities around the world. In many parts of the world, large real estate and infrastructure projects have fueled a construction boom, attracting millions of migrant workers, especially when there are not enough local workers or the local workforce doesn’t have the skills required.

This rapid growth has given rise to challenges around the rights and welfare of workers, which the media and civil society organizations have highlighted publicly. Other external stakeholders, including clients and governments, have started to increase scrutiny of and define expectations for the actors involved in building infrastructure.

Many companies in the engineering and construction industry have longstanding commitments to the health, safety, and welfare of workers. These companies are keen to expand on their existing programs, policies, and standards to further promote the rights and welfare of workers in their operations and subcontracting chains, even in contexts where the rule of law is limited. Working in isolation, however, means that companies’ impact is limited: Competitors can undermine their efforts to implement commitments and a lack of a forum or other coordinated working environment can hamper their attempts to align on standards and approaches.

For six companies in the engineering and construction industry, this construction boom and associated challenges present an opportunity to incubate and implement a new collaboration on the rights and welfare of workers in the industry. Building Responsibly—an industry-led collaborative initiative facilitated by BSR with support from Humanity United—will enable construction and engineering companies to collaborate around their shared values, advance their programs by sharing best practices, agree on common approaches and standards, develop tools, and engage clients, civil society, and international organizations. Through this initiative, companies can more effectively align with regulations and stakeholder expectations, while increasing productivity and fostering a better environment for workers. As a pre-competitive initiative, Building Responsibly will ensure that companies can engage on mutually beneficial measures and policies in a safe space.

Building Responsibly will focus on three key areas of work relevant to companies in the engineering and construction sector, as highlighted in a recent BSR report.

• Recruitment practices. Recruitment agencies or intermediaries on location continue to lure workers with false promises of high-paid jobs, while charging them high fees to cover the cost of their recruitment. Debts incurred during this process might leave workers in situations of debt bondage, a form of forced labor associated with low or no pay, physical violence, or detention in the country or at work.
• Working and living conditions. While progress has been made on health and safety in larger infrastructure sites, construction remains one of the most hazardous industries in the world. In addition, these workers may experience heat, delays in paying wages, long hours, and lack of workers’ representation, and living conditions in purpose-built accommodations near construction sites sometimes fail to meet international standards.
• Subcontractor and supply chain practices. While large construction companies have the resources and knowledge to implement best practices, subcontractors, a vital component of the engineering and construction industry, might face pressure to cut costs and, therefore, minimize social responsibility efforts.

Companies recognize that these kinds of issues cannot be tackled alone. The six companies at the heart of Building Responsibly are choosing to act on these issues in part because it is sound business practice: Ensuring the fulfilment of human rights in operations and subcontracting chains will become a minimum requirement to win work in the future. However, these businesses are also concerned with what’s morally sound: Millions of workers around the world deserve the opportunity to work in a safe environment where they are respected and where their basic human rights are guaranteed. As businesses are increasingly—and rightly—positioned as moral agents in our societies, anything less is simply unacceptable.

Engineering and construction companies that are committed to respecting the rights and welfare of workers are warmly invited to join this collaborative initiative. One thing is clear: As a global society, we’re not going to stop building. But from now on, we’re going to be building responsibly.

For more information or for membership enquiries, please contact JBAndrieu@bsr.org. 

This blog is part of our February spotlight on collaboration. To find out more about BSR’s Collaborative Initiatives, read our overview blog or visit the Collaboration page.

Blog | Wednesday June 29, 2022

The Housing Crisis: Key Priorities for Investor Action

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We are in the midst of a startling global housing crisis, with 100 million people homeless due to a lack of adequate and affordable housing. In the United States (US) alone, 23 million people—including children, seniors, people with disabilities, and veterans—live in households that pay more than half of their income on rent and utilities in 2019.

Population growth, wage stagnation, a lack of public investment and government oversight, and decades of local opposition to the building of new affordable housing have all played a role in the housing crisis. Yet one factor has come into focus: the role of institutional investors.

In the first 3 months of 2021, 1 in 7 US homes were purchased by institutional investors—including private equity firms, pension funds, and publicly listed companies. In Europe, the rate at which institutional investors are buying up housing is also accelerating, driving up housing prices. Financialized landlords often rent out or sell these units to new buyers at inflated rates—causing individuals to divert funds from other basic needs like food or clothing to avoid eviction.

Earlier this month, The Shift Directives: From Financialized to Human Rights-Based Housing were launched in the EU Parliament, which call on governments to regulate financial institutions in the housing market. Regulatory and public policy pressure is also growing, and organized political and social movements against financialized housing are emerging. Meanwhile, widespread media coverage is zoning in on investors’ role in the housing crisis.

As investors increasingly consider environmental, social, and governance (ESG) principles that are aligned with UN Responsible Investment Principles (PRI), Limited Partners’ (LPs) expectations, and emerging due diligence and disclosure regulations, there is no better place to start than with housing. The Universal Declaration of Human Rights sets out adequate and affordable housing as a fundamental human right.

Unanimously endorsed by governments in the UN Human Rights Council, the UN Guiding Principles on Business and Human Rights (UNGPs) clarify that all companies, including institutional investors, should take action to respect human rights. The UNGPs provide a process-based due diligence framework that helps investors identify and address human rights risks, recognizing that where risks to people are greatest, material risks to business often follow.

The most effective efforts will be founded upon a human rights-centered approach to housing that considers how the purchase, maintenance, and sale of real estate assets impact people—including renters, homeowners, and community members at large. Here are key actions for investors to consider:

1. Make A Public Commitment

Commit to upholding adequate housing as a core policy commitment that is integrated into investment-level policies and subsequently integrated into ESG screenings, including human rights risk assessments, real estate asset allocations, and stewardship. Ensure third-party operators also commit to these principles. 

2. Assess Risks and Impacts by Engaging Stakeholders

Listen to the people most impacted by housing shortages and rising costs, including tenant associations, renters and homeowners, NGOs, and local officials. Come to the table not to defend your investment portfolio, but to learn about systemic risks to adequate housing, the role your investments may play, and workable solutions grounded in people’s lived realities.  

3. Establish Fair Housing Practices, including: 

• Fair Rent Levels—Set rents commensurate with income levels (e.g., no more than 30 percent of wage levels), and the costs associated with housing should be at such a level that other basic needs are not compromised.
• Tenant Protections—Establish tenant protections including missed payment grace periods, rental freezes for warranted cases (e.g., sickness, temporary joblessness), and the removal of ‘hidden’ fees, such as administration fees and payment convenience fees.
• Pathway to Ownership—Create a path for renters to become homeowners, including via rent-counting, fair and transparent rent-to-own models, financing options for tenants, and waiving of early termination fees. 
• Accountability and Access to Remedy—Ensure tenants can easily identify who owns and manages their home, can raise grievances and receive remedy in a timely and efficient way, and have an active say in housing decisions affecting their lives. Hold third-party operators accountable for their human rights performance. 

4. Align Policy Advocacy

Support pro-housing affordability policies and be transparent via external and internal communication where policy dollars are being spent related to housing issues. 

5. Track and Disclose Performance

Track and disclose, on a consistent basis, efforts to ensure adequate housing, as well as efforts of third-party operators. Such disclosure should be accessible and decision-useful for affected communities and LPs. Specific metrics for disclosure should include rent levels (compared to median wages), grievances/complaints received, and tenant engagement activities.

The housing crisis is not the fault of institutional investors alone and can only be solved through systemwide approaches. However, with their unique financial leverage, investors have both a responsibility and an opportunity to play a key role in the solution.

We look forward to further engagement on the solutions proposed, and we invite all institutional investors who are interested in responsible and human rights-respecting investment to contact us to learn more.

Blog | Monday October 8, 2018

Four Ways to Enhance Your Materiality Assessment

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The world is changing, with massive implications for business strategy and value creation. Whether it is new energy systems, disruptive technologies, new business models, changing demographics, hyper-transparency, or rising geopolitical uncertainty, the operating context for companies is evolving.

We believe the best response to address our changing world is not to continue integrating sustainability into company strategy, but to develop a completely new way of designing business strategy and creating value. As many sustainability practitioners will tell you, materiality is critical to establishing and refining your company’s approach to sustainability and environment, social, and governance (ESG) issues. Sustainability is a broad and evolving concept: A materiality assessment prioritizes the most important issues and topic areas for your company, helping you develop and refine your sustainability strategy and external reporting.1. 

The relationship between materiality and financial reporting, risk, or issue management not always clear to the core business, which is likely related to the historic separation of sustainability and business strategy. To create a more resilient business strategy with sustainability at its core, here are four ways to enhance your materiality process:

1. Leverage Data Analytics and Artificial Intelligence

BSR partners with reputation intelligence firm Polecat to incorporate big data into materiality. This approach enhances the materiality process by providing data-driven insight on public perceptions of key ESG issues in your company and industry to inform prioritization. Polecat’s MeaningMine can identify stakeholder segments, like Tier 1 media, investors, and NGOs; consumer segments; and language-based regional segments to identify the most prominent issues for each. Used as a supplement to qualitative assessment inputs, such as interviews, big data strengthens the output of the materiality assessment by expanding your external reach, allowing for a more robust sense check of initial findings, illuminating risks and issues of most concern, and identifying emerging issues.

2. Conduct Regional Assessment

Sustainability/ESG priorities can vary significantly by region, which means globally focused assessments may not always capture the nuances of regional or market-specific expectations. This is particularly true for international companies with diversified business portfolios and regional business units. For example, a recent assessment with a member company revealed that terrorism and security was an extremely high priority for its operations in the Middle East, though this was not a priority at the global level. Similarly, topics like diversity and inclusion, genetically modified organisms (GMOs), and automation typically see varying prioritization by region due to regional legislation, public sentiment, and broader business action. A regional approach to materiality can help provide nuance and inform human and financial resource allocations to address priority issues. Moreover, engaging with your regional teams through the materiality assessment is an excellent way to gain buy-in and drive interest and internal support for both the assessment itself and sustainability/ESG more broadly.

3. Future-Proof

While materiality is undoubtedly useful, it is a static assessment, typically only capturing your company’s present priorities. Priorities can gradually change over time, or they can shift rapidly and unexpectedly—as we have seen with the recent increase in concern over corporate integrity and diversity—making your sustainability strategy unforeseeably obsolete. Resilient strategies must consider the disruptive trends, unintended consequences, and residual impacts that may affect them in the future. We have collaborated with various member companies in scenario-planning workshops to test current and emerging material priorities against various future scenarios. As one interviewee for our recent report, Redefining Sustainable Business: Management for a Rapidly Changing World, told us, “Scenario planning is not a prediction of the future, but a way to understand how our business would look in a new environment and to test the resilience of the business in the future.” Future-proofing helps to identify highly dynamic issues, critical uncertainties, and likely strategic implications for sustainability and the business.

4. Align with Enterprise Risk Management (ERM)

Incorporating sustainability into ERM is an increasing focus for companies, as it offers a tangible pathway to integrate sustainability priorities into the business. Materiality is often misunderstood and undervalued by the business and can be confused with enterprise risk. ERM can also be limited, as it tends to focus on short-term risks that are measurable and manageable. We can help you align your sustainability and risk management frameworks and incorporate risk-oriented sustainability priorities into ERM. This alignment can help your company improve its risk processes to better manage cross-cutting, significant long-term risks like climate change.

Scenario planning is not a prediction of the future, but a way to understand how our business would look in a new environment and to test the resilience of the business in the future.

These new approaches to materiality are not mutually exclusive: They can all be incorporated into your materiality assessment to help your company more effectively anticipate and manage priority issues and risks. If you’re interested in learning more about how to leverage them for your sustainability work, please contact us or join us in New York this November at the BSR Conference.

Blog | Friday March 13, 2020

Respecting Human Rights While Protecting Public Health

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As the COVID-19 coronavirus outbreak disrupts global supply chains and shutters factories and stores around the world, companies are grappling in real time with the human rights implications of the coronavirus response. This raises a question that we have had little opportunity to ask ourselves before: How can we best protect public health while respecting individual human rights?

Coronavirus is raising a range of human rights dilemmas for business, including:

• Discrimination, notably against ethnically Chinese and Asian persons (including persons of Asian descent and appearance). The outbreak of coronavirus, which originated in Wuhan, Hubei Province, China, has seen a global rise in anti-Chinese and anti-Asian sentiment spurred by fear and anxiety, leading to stigmatization. For example, there have been reports that some businesses worldwide, including restaurants, have barred entry to Chinese and Asian customers. Such discriminatory actions have been further fueled by media sensationalism as some news outlets have been criticized on how they have been reporting the crisis.
• Privacy, as health and other personal data are collected in the workplace and in public, often via integration with facial recognition and other biometric technologies (including temperature testing). This in turn raises concerns about security of data storage, future use and misuse of data, and the risks of empowering authoritarian governments. Companies are now beginning to develop more sophisticated technologies with the ability to identify persons wearing face masks. Critics of such facial recognition technologies are concerned that coronavirus is giving authorities and companies the opportunity to ramp up surveillance.
• Labor rights and worker welfare, with heightened risks for vulnerable workers and those in forced labor. On the one hand, workers risk unhealthy and stressful living and working conditions if employers do not set policies to allow people to work from home, self-quarantine, or take paid sick leave. On the other hand, workers risk lost wages or job loss if employers terminate contracts or withhold pay due to absences for illness, quarantine, or caring for a sick family member. Companies may also increase working hours to compensate for a reduced workforce, risking exploitation of their workers and undermining their health and well-being.
• Freedom of expression, as employees face consequences for speaking publicly about working conditions, and companies address increased risks of disinformation. Employees who are critical of working conditions as well as business approaches to health and safety risk backlash, censorship, and in extreme cases termination of employment. It was recently alleged that an employee in Hong Kong was dismissed after he posted comments on Facebook criticizing his company’s response to coronavirus, specifically for not implementing a work-from-home policy and providing sub-standard face masks.

Coronavirus has put us all on notice that we must be ready with measures to ensure respect for human rights while protecting public health. The question for today is, “What’s the best way to do that?”

Companies can consider the following recommended actions to minimize adverse impacts on human rights stemming from their response to coronavirus or other public health crises in the future:

• Limit employee exposure to coronavirus in the workplace through a suite of actions: personal protective measures (e.g., hand and respiratory hygiene supported by proactive training and distribution of hand sanitizers), environmental measures (e.g., cleaning of frequently used surfaces and common spaces, appropriate ventilations), workplace policies (e.g., screening at the entrance in the facilities, social distancing, and others), and work arrangements (e.g., rotational schedules that reduce person-to-person contact, and work-from-home arrangements for non-essential staff).
• Provide paid leave in case of illness, quarantine, or to care for a sick family member. Employees who are required to work from home due to the outbreak should continue to receive their normal pay and benefits.
• Develop a plan with suppliers to ensure worker welfare while supporting business continuity, such as flexible quotas and delivery schedules.
• Ensure that any measures to increase working hours to compensate for workforce reductions are time-bound.
• Establish non-discrimination policies and proactive measures to protect staff and customers from discrimination.
• Ensure that personal data collection follows applicable regulations (e.g., GDPR), is limited to what is medically necessary (e.g., temperature), is provided under informed consent, and is not stored or used for purposes beyond public health measures to prevent the spread of coronavirus.

Pandemics are increasingly likely in today’s hyperconnected world, and our collective well-being is shaped by the well-being of the most vulnerable among us. Coronavirus has put us all on notice that we must be ready with measures to ensure respect for human rights while protecting public health. The question for today is, “What’s the best way to do that?”

And the question for tomorrow is, “How can we see the next one coming?”

Blog | Wednesday February 21, 2024

2024’s Elections: A Defining Test for Business Leadership

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As more than half of the world’s voting-age population heads to the polls in 2024—more than in any previous year in human history—there is a wave of anxiety cutting across business, civil society, governments, and in many places, the very citizens whose voices are to be heard at the ballot box. 

It is, indeed, an epochal moment. Most of us take democracy, and the rule of law, as a stable constant in our public life. But it’s not something we can take for granted. The rise of anti-democratic parties around the world has set off alarms. It is far from clear, however, that business has faced up to the urgency of the moment. Although, according to a recent report in Fortune, business leaders increasingly recognize that political disruptions do pose a significant risk. 

Business cannot thrive in an environment where trust in democratic institutions is undermined, where objective facts are under attack, where social consensus is unattainable, and where populism stokes resentment and interferes with global collaboration.  

All of those things are in play in 2024’s elections, from India to Mexico to the United States, to the European Union, and dozens more jurisdictions.

This would, at other points in history, be considered a political question that is not front and center for business. For multiple reasons, that mode of thinking is a luxury that businesses cannot afford. 

To start, while elections ensure that the people have their say in governance, there are many reasons why this year’s spate of elections may not have that effect. First and foremost is mis/disinformation, including AI-powered deepfakes, which generate false information that distorts outcomes and destroys trust.  

Already this year, in the US and Pakistan, false information and deep-faked communications ostensibly from candidates and officeholders have distracted and confused voters. There is considerable evidence that both domestic and foreign actors are using the digital playing field to influence outcomes and erode trust in democratic processes.

There are also many barriers to free and fair elections having nothing to do with digital tools. Political parties and candidates in many countries have actively cast doubts on the legitimacy of elections, established legal and practice barriers to voting. And in the United States, the flood of money from opaque sources undermines both the reality and the perception of free and fair elections. 

In addition to questions about the legitimacy of election processes, some outcomes present risks for companies committed to just and sustainable business. Across the world, populist movements are causing a turn away from climate action, progress on equity and diversity, respect for disfavored populations, and global cooperation.

Concerted progress on climate and nature, for example, will be virtually impossible if the COP processes—as imperfect as they are—buckle under the weight of geopolitical conflict and nationalism. Scapegoating and xenophobia interfere with business commitments to diversify businesses from the boardroom to the factory floor and contribute to a vicious cycle in which human rights and rule of law are sacrificed in the name of national glory. And the momentum towards the harmonization of regulatory standards relevant to “ESG” is also under threat. 

The stakes, in my view, are clear. The question then is what can businesses—and business leaders—do? 

For many businesses, this presents uncomfortable questions, and a sense that while there is risk in inaction, there may be equal or greater risk in taking action.

We believe that the best approach is to establish a “playbook” that offers companies a range of options that they can fit to their circumstances and assets. All companies, for example, can encourage voting and help their employees strengthen their media literacy to avoid false or misleading information. All business leaders can speak with their peers in various forms and engage in quiet diplomacy with government officials to promote legitimate elections. Indeed, this was seen in the run-up and aftermath of the 2020 elections in the United States. 

Other steps may be appealing to some companies and not others:

• Coalitions of companies committed to preserving and advancing workforce diversity and climate action—with a clear statement of business and economic benefits—can send a powerful message.

• By reinforcing the economic value of cooperation to address global challenges, business can help to legitimize the economic case for a truly sustainable economy.

• Demonstrating the human progress that individual companies—and macro financial and economic systems—can deliver through an enduring and purposeful commitment to sustainability further reinforces positive outcomes.

Not all companies will want to make these efforts, but this is essential in a world where a sense of economic precarity is fueling fear-based politics.

BSR is supporting its member companies in understanding the stakes, identifying leverage points, and supporting collaboration, including with like-minded stakeholders. Seldom has there been a time when the achievement of free and fair elections and sustainability goals have been so closely tied. 2024 is not only a stress test for rule of law and democracy; it is a test for business leadership as well. The opportunity for positive impact is great, and the price of inaction is too high to risk. 

Blog | Wednesday December 6, 2017

Remedy against the Machine

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How can we ensure access to remedy when decisions are made by machines rather than humans? This was the complex question that BSR and the International Corporate Accountability Roundtable (ICAR) considered in our joint session at the UN Annual Forum on Business and Human Rights last week.

By vastly improving our analytical capability, artificial intelligence (AI) has the potential to address some of humanity’s most pressing challenges, including those relating to healthcare, education, transportation, counter-terrorism, and criminal justice. However, as we have noted in our new primer on top human rights priorities for the ICT industry, AI brings with it new and previously unforeseen human rights risks on topics as diverse as non-discrimination, privacy, child rights, freedom of expression, and access to public services.

For example, using AI when making sentencing decisions in courts, providing access to credit, or identifying potential terrorists can result in discriminatory decisions. Using voice recognition-based AI devices can bring implications for privacy rights and child rights, while some have articulated concern that machines making decisions about whether social media posts comply with terms of service could negatively impact freedom of expression.

The third pillar of the UN Guiding Principles on Business and Human Rights (UNGPs) establishes that access to remedy should be provided for victims of such violations. Our session considered three new challenges for securing access to remedy in the context of AI:

1. Guaranteeing remedy when violations result from decisions made by machines and algorithms, rather than humans
2. Providing operational grievance mechanisms when there are hundreds of millions of rightsholders and billions of decisions
3. Safeguarding access to remedy when dozens of companies, rather than a single corporate actor, are linked to a human rights violation via the interaction of different AI-based products and services

While these discussions can seem hypothetical, technologies are moving fast, and companies from all industries are rapidly integrating AI into their products, services, and operations.

Microsoft Vice President and Deputy General Counsel Steve Crown raised the challenges of knowing when a harm has taken place, identifying who might be at fault, and defining a remedy that can return the victim to their previous state. Crown provided the example of a young woman who was targeted with advertisements based on retail data analytics suggesting she was pregnant—and her father discovering this fact from direct mail, rather than from his daughter. In this case, had a privacy violation taken place, what remedy might be appropriate if it had, and how could the company stop it from happening again?

Sandra Wachter, a researcher in data ethics at the University of Oxford and research fellow at The Alan Turing Institute, surfaced the notion of a “right to explanation” that might come into force under the new European General Data Protection Regulation (GDPR) in scenarios when decisions are made by machines, such as access to credit or employment opportunities.

However, Wachter highlighted that this right in the GDPR disappears once a human is involved in the process—even if the human is involved as a rubber stamp—and that many companies will oppose revealing detail about decision-making algorithms as being commercially confidential. Sandra proposed an alternative “right to explanation” model based on counterfactuals that describe facts that lead to that decision (such as income or educational achievement, for example) that may offer meaningful information to rightsholders, without the need to convey the internal logic of an algorithm. Sandra also spoke in favor of an independent watchdog to scrutinize companies and ensure accountability.

Google Free Expression and Human Rights Counsel Alex Walden spoke about how machines are being deployed to assist with judgments about controversial content uploaded by internet users, such as hate speech and terrorist content. These machines can be especially helpful given the sheer volume of content uploaded—but while machines can sift through huge volumes of content to identify cases, only humans have the necessary understanding of context and language to make final decisions.

A theme running throughout was the notion that AI is going to play an increasingly important role in our lives, and that it is going to be used by many industries, not only technology companies. Overall, I reached three conclusions about the application of the UNGPs in the age of AI.

First, it is important that the human rights implications of AI are understood by all sectors of the economy—such as retail, financial services, energy, healthcare, transportation, infrastructure, and the public sector.

Second, we should consider access to remedy through the lens of the rightsholder. AI is extremely complex, and only a very small number of people in the world know how it works. If AI is to fulfil its potential while mitigating accompanying risks, it is essential that civil society, rightsholders, and vulnerable populations benefit from channels to participate meaningfully in discussions about its application and have access to remedy. The professional communities engaged in the development of AI would benefit from a deep understanding of ethics issues and rightsholder perspectives, as is beginning to happen through initiatives such as Partnership in AI and AI Now.

Finally, there is a need to assess whether the access to remedy being developed in the context of AI meets the remedy effectiveness criteria set out in the UNGPs, such as being legitimate, accessible, predictable, equitable, transparent, rights-compatible, and based on engagement and dialogue.

Answers to these questions will only arise over time (unfortunately, we can’t just ask Alexa, Siri, or Cortana!) and with the identification of use cases demonstrating how effective remedy can be obtained. We look forward to the opportunity of working with our member companies from all industries to explore these important conversations further.

Blog | Wednesday October 12, 2022

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

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Every Company Is a Technology Company

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

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

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

Protecting the Rights of the Invisible Workforce

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

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

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

Taking Individual Corporate Action

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

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

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

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

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

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

Blog | Thursday October 22, 2020

Election 2020: A Test for American Democracy, and A Test for American Business

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American democracy is facing an immense test in 2020. This is also a test for American business.

Amidst a pandemic that renders some forms of in-person voting dangerous, a wide array of actors is exploiting both social and mainstream media to spread rumors, conspiracy theories, and outright lies concerning both the campaign and whether votes will be counted accurately. The FBI continues to make clear that there is a concerted effort from Russia, and to a lesser degree other countries, to sow chaos and interfere with both the electoral process and faith in the outcome. The U.S. Postal Service has undermined its ability—and commitment—to enable mail-in voting to proceed on a timely basis. And in a time when the persistence of systemic racism demands action, steps have been taken in many states to suppress access to voting, particularly for people of color who have faced serious restrictions throughout American history.

And, shockingly, for the first time in American history, the incumbent President is consistently undermining public trust in the electoral process. By hinting loudly that the courts rather than the American people will decide the election; making dishonest, unfounded claims of voter fraud; and most importantly, refusing to abide by the results of the election; this President is proving his commitment to his own power rather than protecting citizens’ right to vote.

No business can afford to stand by while this happens. No boardroom can say this is a matter for elected officials, journalists, and political analysts.

American business has thrived over the past 75 years in no small part because of the relative stability and predictability of the American political system. CEOs know well from their operations around the world that business is hindered by the political instability that all too often has roiled countries around the world. Business leaders invest in political risk analysis for good reason. Until now, the U.S. has not been viewed the same way as other countries roiled by coups, general strikes, and corrupt courts.

Process matters to business. Rule of law matters to business.

No company operating in America will want to face a society—and a workforce—that is torn asunder by even more profound polarization and the prospect of growing civil unrest in the wake of an election that is illegitimate or seen as illegitimate.

With all this in mind, the time is now for American business to align on the side of American democracy. As Ronald Reagan said in 1964 (in a very different context), this is “a time for choosing.”

In addition to the steps that many companies have already taken to enable voting and to promote free and fair elections, there are five additional things that business should do to sustain a healthy democracy.

1. Take preventive action: In advance of Election Day, companies can convey to elected officials how essential it is that democratic processes be protected. This may be most effective for companies and CEOs who have good lines of contact with GOP Senators. They should understand that the business community is watching and will not support officials to support or enable election interference.
2. Work through trade associations: Companies can leverage their voice and find strength in numbers by working through trade associations. If trade associations stand only for the narrow self-interest of their members, their purpose is highly questionable. Very specifically, this is a test for the Business Roundtable’s 2019 statement of purpose. There is no better way to demonstrate that it has real meaning than by using it as the basis for pro-democracy views.
3. CEO coalitions of the willing: Like-minded CEOs could band together to be prepared to speak up should things go off the rails. This is what happened in advance of the withdrawal of the U.S. from the Paris Agreement. CEOs can convey their views to the White House and make clear that election interference is not only wrong but bad for business.
4. Communicating with employees: We have seen multiple examples of employee activism in recent years. In the event of a contested election or interference with vote counting or the right to vote, companies will need to be ready to speak with their employees, who will want to know where their companies and their CEOs stand on American democracy. While companies need to respect diverse political views in their workforces, support for democracy is a basic principle that should not be presented as partisan.
5. Partnering with NGOs: Aligning with pro-democracy organizations for advice and support is also valuable, whether the ACLU or younger organizations such as NationSwell and Business for America. Business partners with NGOs around the world for similar purposes: why not in the United States also?

And in all these cases, business should also take care to address the fact that voter suppression all too often restricts access to the ballot for Black Americans and other people of color. The workforces of Fortune 500 companies are more representative of America than the U.S. Congress. In a year when many companies and business leaders are straining to demonstrate their commitment to their BIPOC colleagues and customers, calling for an end to voter suppression laws and regulations is a great step.

The test we face is a binary choice. It is not, however, a choice between Democrats versus Republicans. It is true democracy versus a degraded system that will undermine American society and American business. History will cast a keen eye on what happens over the next few weeks.

BSR’s founding Chairman, Arnold Hiatt, who served as the CEO of Stride-Rite Shoes for many years, said this at the Ronald Reagan Presidential Library in 2002: 

Business is the most powerful force in our society—particularly if it is willing to accept moral, civic, and financial leadership. Business has the tools, the energy, and the will to fill the growing leadership vacuum in government.

This leadership is badly needed in 2020. Will business pass the test?

Blog | Monday November 6, 2017

Top 10 Reasons to Be a BSR Member

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I’ve recently had a number of conversations with my colleagues and sustainability leaders at long-standing member companies about the value of BSR membership—why is it that more than 250 of the world’s largest and most influential companies have chosen to work with us on the business of building a better world? There are a wide range of answers. Different people, even within the same company, have different reasons that they most appreciate their BSR membership. Here’s a “Top 10” list of the reasons to be a member that I hear the most:

1. Access our global network: With a network that spans eight offices around the world, includes more than 10 major industries, and convenes issue experts on a range of sustainability issues, BSR offers members personalized access to our community. We help make connections and leverage trusted relationships across regions, functions, sectors, and issues. In fact, we often introduce colleagues within the same company who don’t yet know each other. Companies love how we can connect them not only to businesses across industries, but also to key NGOs and other noncorporate stakeholders. As one member put it, "You (BSR) can call Shell, and you can call WWF, and they both pick up the phone." 
2. Draw upon our expertise: Members benefit from our deep expertise in specific issues, as well as our ability to draw connections across issues.  For example, we don’t only view climate from a climate lens—we also understand the implications of climate change on human rights and women’s empowerment, and this is true across issues. While many organizations offer deep expertise in one or two topics, your company can use BSR’s knowledge across most of the issues you focus on—meaning we can serve as a one-stop shop for your sustainability needs. Moreover, our diverse backgrounds help us “speak the language” of your colleagues in other teams and translate your sustainability priorities across departments.
3. Participate in business-focused convenings: BSR brings together the leading sustainable business voices in a variety of formats so that you and your colleagues can learn, engage, and walk away with practical insights. BSR organizes more than a dozen webinars per year as part of our Sustainability Matters series. These webinars (and their recordings) feature thought leaders discussing trends and best practices and are usually made available exclusively to BSR members. BSR also convenes member companies for regular regional networking and best-practice-sharing events, including breakfast presentations, workshops, and executive-level dinners. We host one of the world’s leading sustainable business events in the form of our annual BSR Conference, which just celebrated its 25th year. 
4. Collaborate for systemic solutions: At BSR, we know that an individual company cannot solve systemic sustainability challenges alone. Through structured platforms, we bring together peer companies, stakeholders, and whole industry value chains in search of shared solutions—from sharing best practices to changing business norms and working with multiple partners to implement change on the ground. We provide members the opportunity to shape, develop, and scale these action-oriented collaborations.  
5. Phone a friend (us): We are there to support our members as individuals in their efforts to advance sustainability in their organizations. Whether you have a large team or a team of one, BSR is your extended team—we are in your corner providing resources, support, and advocacy. We don't just tell you want you want to hear: We are constructive partners, but we also bring credibility and stakeholder perspectives to the conversation. You can call on us to meet with one of your executives, help answer day-to-day questions (e.g. investor questions, preparing for executive meetings, etc.), or identify off-the-shelf resources before you spend time starting from scratch (e.g. examples of good policies, slides on topics, etc.). I always tell members to reach out more; after all, you don’t know if you don’t ask.
6. Take advantage of formal membership benefits: We’ve structured a number of ways to make sure you benefit from our experience—through your member engagement option, quarterly check-ins, and an annual member meeting, you can find out about our latest learnings from the field. In addition to responding to ad-hoc questions, BSR provides practical, regular support across sustainability issues informed by our decades of work with companies.
7. Stay ahead of trends and emerging issues: BSR members also benefit from the opportunity to stay ahead of emerging issues and plan for tomorrow. The biweekly BSR Insight provides an overview of BSR’s most recent thinking, research, and events. You can share this with multiple contacts across your company, so everyone can learn about sustainability topics relevant to their roles. Our new Sustainable Futures Lab will also provide you with even greater ability to anticipate how future changes might impact sustainable business.  
8. Drive visibility and gather input for your company’s sustainability efforts: BSR provides a well-respected, credible platform to showcase innovative practices and gather feedback on challenges. Our members speak at BSR events; they share practices and develop partnerships via our collaborations; and they are highlighted as case studies in BSR’s research, website, social media, blog, and reports and publications. 
9. Find your next colleague: This is perhaps the simplest but most underrated benefit of BSR membership—our jobs board: We’ve posted more than 1,000 job opportunities since 2001. Given that we have such a fantastic network, BSR members often tell us that they find the best job candidates via their (free) postings on our careers page. We all know how overwhelming the hiring process can be and how hard it is to find the right people, but we aim to simplify this for BSR members with our website.
10. Shape the future of sustainable business: We view our members as real partners as we work together to shape the future of our field. Over the past 25 years, our members have been central to defining our work, and as we look ahead, we invite you to collaborate with us on creating a new agenda, a new approach, and a new voice for business. We’ve recently launched a paper on "The Future of Sustainable Business" to initiate this dialogue, and we hope our members will join us in articulating, and then achieving, a new vision together.

Why is your company a BSR member? Are there any reasons that are missing from this list? Let us know on Twitter @BSRnews using the #BSRmember hashtag, email us, or join us for our upcoming webinar about BSR membership.