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Akram Bara

Preview

Akram works with RISE on the financial and operational aspects of the implementation of initiatives supporting collaborative industry action at scale to advance gender equality in global garment, footwear and home textiles supply chains.

Prior to BSR, Akram worked in operations, managing a program to finance the Agricultural sector’s climate transition. Previously, he worked in the development and management of international sustainability projects in Italy.

Akram holds a MSc in Sustainable Development from three esteemed universities—Padova in Italy, Leuven in Belgium, and Paris 1 in France, and a BA in Accounting from the American University in Cairo, with a semester at American University, Washington DC.

Blog | Thursday December 14, 2023

COP28 Marks Important Steps Forward: Now the Real Work Begins

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After lengthy and spirited negotiations, COP28 closed with an important signal: an agreement by all the world’s nations to, amongst other things, “transition away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, to achieve net zero by 2050 in keeping with the science.”

This is an important, albeit imperfect, step forward, but the question remains: is it enough? In a world awash with hot takes, we don’t—and can’t—yet know. The ultimate success of this COP depends entirely on what happens next, and whether these words, which are not binding, are embraced fully by governments, businesses, investors, and all of us.

This COP produced the first response to the Global Stocktake as required under the Paris Agreement, and it is summarized this way: “Despite progress, global greenhouse gas emissions trajectories are not yet in line with the temperature goal of the Paris Agreement, and there is a rapidly narrowing window for raising ambition and implementing existing commitments in order to achieve it.”

There are certainly important steps forward in the outcome. First and foremost, this is the first time a COP has agreed to a shift—however worded—away from fossil fuels. The science tells us that this comes too late. In the context of the COP process, however, this marks a meaningful step forward, even if it is not as definitive as many called for, which is imperative in the face of rising temperatures.

There are four other significant steps put forward in the final statement:

• Just transition is firmly on the agenda: Both in the final text and in the Loss and Damage fund that was made operational, the question of equity is no longer on the sidelines. The question is now how to implement and fund the just transition.
• Tripling renewable energy capacity and doubling energy efficiency by the end of the decade: twin objectives that should unleash innovation and investment to build a resilient, inclusive, clean energy economy.
• Methane reduction commitments from the oil and gas sector, which included national oil companies for the first time, as well as food and agriculture companies. These steps have the potential to reduce warming by 0.2°C.
• Adaptation is now more firmly on the agenda. While large gaps in implementation and financing adaptation remain, it is now clear that governments, and businesses, should step up their work on building climate resilience.

What does this all add up to? The agreement is not a mandate: the COP system is not set up to create binding outcomes. But the words on the pages of COP decisions carry weight, and it has achieved several things that will catalyze change. 

To start, this COP, for the first time, sends a clear signal that the shift to a clean energy economy must and will come. For businesses and investors, this is an unequivocal message to transition energy systems away from fossil fuels, and the need to plan to make it happen. Second, this also raises the stakes for governments, who are due to submit a new round of Nationally Determined Contributions (NDCs) by COP30 in 2025. Any NDC that fails to take account of the transition away from fossil fuels in a timely way aligned with science will not be deemed credible. Third, this agreement demonstrates positive momentum. On almost all the key items, there is higher ambition than what we saw in Glasgow at COP26. It is hard to agree that this is sufficient, but it indicates that there is a global commitment to make progress further and faster.

That is the glass half-full assessment. There is also much to be desired in the agreement.

The language on tackling fossil fuel subsidies remains notably weak and offers governments that don’t want to reduce or eliminate them a pretty wide-open door. We haven’t seen funds needed to achieve the stated objectives on Loss and Damage or Adaptation, and the world has already shown that it is not ready to honor past commitments on climate finance. The language on coal does not appear to be a meaningful improvement commensurate with the harmful impact of coal-generated power, which continues to increase in some countries. The text also leaves the door wide open on “transition fuels.” Many of the other elements of the final agreement will need to be pushed further: not only at COPs, but even more importantly, in the “real economy” the rest of the year.

Aside from the negotiations, the immense set of activities at COP provides room for cautious optimism. The business community continues to show up in greater numbers, and while that alone does not achieve impact, we see  a seriousness of purpose, commitments to invest and innovate, and a focus on turning commitments into action that continues to increase every year. Coming out of COP28, our key message for business is to plan the energy transition for your company in line with science, gear up adaptation and nature efforts, and ensure justice and equity are central to your approach. The private sector also needs to wrestle with the fact that climate goals and business models that depend on endless growth are likely incompatible.

For BSR, we were proud to work at this COP to advance business action on core questions including Just Transition, Climate and Health Equity, Scope 3 emissions, Beyond Growth, Nature, Corporate Governance and Climate, Reporting and Disclosure, and other matters. Many of our 300+ member companies showed up at COP and showed up well.

Ultimately, this may be the most positive outcome that was realistic in a process that demands consensus amongst nearly 200 nation-states, who have wildly different circumstances, resources, and interests. While the agreement does not represent the ambition many had hoped for, there is something for everyone. The real question is whether it will be enough for all of us collectively. That depends not on the text, but on what we do with it.

Blog | Thursday December 14, 2023

How Businesses Can Address the Water Scarcity Crisis

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New guidance from the Taskforce for Nature-related Financial Disclosure and the Science Based Targets Network (SBTN) is bringing an increased focus on the materiality of freshwater. Interventions to make water use sustainable bring difficult trade-offs for businesses and communities. Will economies need to reach a crisis point to galvanize support for interventions? Or can ambitious solutions and collaborations redress the balance in time?

BSR’s Anna Iles talks to Tim Smedley, who traveled the world researching water scarcity, for his new book The Last Drop: Solving the World’s Water Crisis. Additionally, the Nature team provides key actions businesses can take to identify and address their impacts and dependencies on water and to understand their water-related risks.

Currently, 17 companies are piloting a methodology by the SBTN to set science-based freshwater targets. Why should businesses pay attention?

Water scarcity is knocking on the door of a lot of countries that aren’t expecting it. The World Resources Institute published a list of 25 countries facing extremely high water stress, and Belgium came higher than Syria. It’s not that Belgium doesn’t get enough rain: it doesn’t capture it when it falls. Like The Netherlands, it was designed on the drainage principle of sending all the water out to sea as fast as possible to avoid flooding, and that worked very well for a time. But now, as rainfall patterns change, they need to hold on to some of it.
 
Then there’s groundwater depletion. Unsustainable water use means aquifers dry out. In the US, aquifers supplying 90% of the nation’s water are being depleted. Meanwhile, one of its largest reservoirs, Lake Powell, is losing a cubic kilometer of water a year to evaporation, while its inflow is decreasing, due to less reliable snow caps. Mega dams and reservoirs will soon be stranded assets. 

Are you saying the main driver of water risk is mismanagement—particularly in light of our changing weather patterns?

That’s right. A warmer climate causes more water to evaporate, from water bodies (including major reservoirs) and the soil. The air holds more moisture, and so the rain falls more heavily—and causes floods because it hits dry earth. Droughts have increased, which makes water management harder everywhere.
 
But much of the problem was man-made already. Many mega dams have past their 50 year intended timeframes. While pollution makes all these things harder, from soil run-off and microplastics to forever chemicals and human sewage. Polluted water is just as bad as no water. 

The US Federal Government has stepped in to restrict water usage. Is more stringent legislation needed?

Legislation works for sustainability, but it doesn't necessarily work for people.

In Australia, the Government has been buying water back from farmers for the past decade to keep the River Murray flowing. In 2010 it no longer reached the sea due to over-abstraction: now it does. It’s a very successful policy but also hugely unpopular because it’s taking water from farmers. So we need to start having more honest conversations politically about the true value of water. 

This raises the question of trade-offs between the private sector’s water demand and that of natural systems and communities. Analysts say tech giants’ water use is growing by 20-35% due to AI research and development. What is the way forward? 

Water use for technology is set to increase and should certainly factor into business plans. You need water to cool servers and energy plants alike: French energy supplier EDF is forced to shut or scale down nuclear plants almost every summer due to water shortage. We need to invest in alternatives, like air cooling. 

More sustainably, we need to harvest rainwater, and recycle greywater, from toilet to tap. There are off-grid solutions too: a company in Arizona is making ‘hydropanels’ that use solar thermal to draw water from moisture in the air. If it works in the desert air of Arizona, it can work anywhere.

Another way forward is public-private partnerships around watersheds, such as the Nature Conservancy’s Water Funds. It’s not currently the private sector's legal responsibility to maintain water, even if they depend upon it. Partnerships like these bring in private sector funding to update common infrastructure, and then public authorities maintain it afterward. 

I also see impacts from sustainability standards like the Better Cotton Initiative and the Alliance for Water Stewardship, plus the leadership of big buyers. For instance, a major clothing brand recently announced it’s targeting a 40% reduction in water use among its suppliers. If you can’t deliver on that, you’re out. Buyers have huge influence. 

Such policies have big implications for suppliers and their livelihoods. 

Yes, there are clear Just Transition implications here. But current practices affect livelihoods too. The global crop system is currently based on moving from one region to the next. As one dries out, you start growing in another. There are huge Saudi-owned or invested farms in Arizona now, but Arizona also has dwindling groundwater reserves. The water will run out, and the investors will move on. The question is, how do you plan for a future without agribusiness dollars?

Are there solutions that work both for people and for natural systems? 

Yes, there are—including indigenous practices. Peru—which currently grows the majority of the world’s out-of-season asparagus in the arid Ica region—is reviving a traditional irrigation method, part of a water-centric worldview called “Poza”. They flood fields such that it trickles into the aquifer below in a kind of closed-loop model. 

In mainstream agriculture, no-till (effectively not ploughing) works on a similar principle. This mimics a natural system by enabling water to seep down into the ground and work its way back into streams and rivers. No-till approaches are much less costly and more effective than building reservoirs—and benefit farmers by decreasing fuel and labor costs.

A similar approach is Managed Aquifer Recharge, where you pump water back down into aquifers. 

What’s the most important solution in your view?

Without a doubt, nature-based restoration and, where appropriate, rewilding. We are 100% reliant on our natural water cycle. One clear example is our approach to flood control. By moving away from grey infrastructure and restoring floodplains and wetlands, we get co-benefits from flood mitigation to carbon in the soil, groundwater recharge and water purification. Where I live, in the UK, they’re reintroducing beavers after 400 years: it turns out they’ll restore water courses for us. 

We need to remember where water comes from. We thought we could decouple ourselves from natural systems. That was always hubris. We are fully reliant on natural systems. 

Actions for Business 

BSR supports businesses to develop positive relationships with land, freshwater, and marine systems in both their operations and value chains. We help companies to identify and address their impacts and dependencies on water and to understand their water-related risks, and how these intersect with climate change. Here are some key recommendations:

1) Understand your impacts and dependencies

• Using a double materiality approach, assess your nature impacts and dependencies, including freshwater, and understand your reliance and impacts on freshwater quality and quantity. This should be done in alignment with the Taskforce for Nature-related Financial Disclosure and the Science-Based Targets for Nature, and consider all significant pollutants, from microplastics to chemicals.

• Conduct a water risk analysis for the company and its supply chain, collecting quantitative primary and secondary data and appropriately including impacts for communities and ecosystems in the analysis.

• Prioritize locations in your supply chain based on gathered data, incorporating stakeholder perspectives to ensure an equitable lens is applied to location identification. 

• Ensure you consider freshwater ecosystems as an important landscape in nature-related work. 

• Apply foresight techniques to understand how a changing water cycle might impact supply chains. 

• Monitor emerging policy and recommendations, such as the EU’s proposed Blue Deal.

2) Invest in shared nature-based solutions

• Map identified risks to science-based interventions to employ the correct solutions in the right landscapes (e.g., do not try a ‘one size fits all’ approach).

• Explore and invest in nature-based solutions (NbS) for long-term supply chain resilience, taking advantage of win-wins towards net-zero goals.

• Explore the ramifications of proposed solutions for all stakeholders.

• Develop and engage in watershed and watercourse-based collaborations to find shared solutions for restoration and conservation. 

• Adopt a human rights, environmental justice and community co-creation approach to water management.

3) Reduce water use across your value chain.

• Build awareness of embedded water, through water consumption labels and price restructuring.

• Consider water sources, differentiating between groundwater reserves and recycled greywater.

• Invest in waterless technologies and reduce water use within your value chain. This includes developing products and manufacturing systems with minimal to no water dependency. 

• Develop and utilize circular water systems within production and manufacturing facilities throughout the value chain. 

• Consider divesting from business lines or activities that are overly reliant or disproportionately utilizing freshwater and freshwater ecosystems. 

For more information on how to develop ambitious nature-based strategies and solutions toward your sustainability objectives, contact BSR’s Nature team. 

Reports | Tuesday December 12, 2023

Advancing the SDGs Through Collaboration

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The 17 Sustainable Development Goals (SDGs) were adopted by the United Nations as a global call to action and a universal roadmap to end global poverty, protect the planet, and deliver a future in which no one would be left behind. Halfway through, progress on the 2030 Agenda is weak, and socioeconomic inequality continues to grow. Business-led multi-stakeholder collaborations play a critical role in bridging these gaps, from addressing growing socioeconomic inequality to tackling the devastating impacts of climate change. 

Drawing on BSR’s expertise in incubating, designing, and facilitating collaborative initiatives, this report explores how business-led multi-stakeholder collaboration can help to advance the SDGs and contribute to five key dimensions of poverty, including poverty reduction, human rights, gender equality, climate and environment, and peace and conflict. The report leverages concrete examples of collaborative initiatives incubated through the CoLab SDGs program, a strategic partnership with the Swedish International Development Cooperation Agency (Sida) that aims to increase the private sector’s contribution to achieving the 2030 agenda and illustrate how these impacts play out in practical terms. Finally, the report outlines initial key learnings from the CoLab SDGs program. 

Case Studies | Tuesday December 12, 2023

Developing Best Practices for Human Rights Due Diligence in Technology Sales Channels

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Introduction

BSR worked with Hewlett Packard Enterprise (HPE) and another BSR member company to develop a set of best practices and recommendations for addressing one of the toughest human rights challenges in the technology sector: how to ensure human rights due diligence (HRDD) is conducted across sales channels. The project illustrated the value of multiple companies pooling resources and coming together to work with BSR to address a common challenge.

Background

Leading hardware and software companies, including HPE, have taken steps to identify and mitigate risk that customers could use their products and services in ways that adversely impact human rights. However, once products and services are sold, these companies often lack visibility or control over how they are used. Many companies in the technology sector rely on third-party sales partners that distribute, integrate, or resell their products and services to end users. This presents challenges for companies due to limited visibility into channel partner sales and relatively immature human rights practices throughout their sales channels.

Challenges

There are several challenges to effective HRDD across sales channels in the technology sector. Sales channels involve a large volume and variety of partners, parts of the sales partner market lack stability, there is a long chain of entities before a product reaches the end customer, sales often involve a mix of products and services from different vendors, sales and legal compliance teams tend to lack expertise in ethics or human rights, there are significant financial and performance pressures in sales, and there are a variety of different sales models. HPE asked BSR to develop guidance that could address these challenges due to our history of working on industry-wide human rights issues and trust facilitated by our membership model, which enables companies to feel comfortable working collaboratively together.

BSR's Response

BSR conducted interviews with sales channel and legal compliance leads at both HPE and another BSR member company, as well as several of their common sales partners that act as distributors and resellers, to develop an understanding of how sales channels operate, the roles of each actor, their current approach to conducting HRDD of sales and the challenges they face. BSR utilized the insights gained from these interviews combined with our knowledge of how to effectively implement HRDD inside companies to develop a set of detailed best practices.

BSR also utilized interview insights to develop tailored guidance for each company based on these industry best practices.

Impact

By coming together to work with BSR to help address a common challenge, these peer companies were able to help create much needed industry-wide guidance on one of the most complex and unsolved human rights challenges in the technology sector. The guidance contains recommendations specifically for vendors, distributors, and resellers based on the leverage (the ability of a company to address a human rights impact according to the UNGPs) and constraints of their position in the sales channel, as well as recommendations for all companies in the sales channel. These include collaboration across the sales channel to develop and share best practices and create feedback loops, exploring lessons learned from the supply chain context, identifying highest risk use cases with the potential to involve severe human rights violations that require heightened due diligence, and continuing to advance downstream human rights due diligence including processes for flagging, assessing, and mitigating high-risk sales opportunities. Engaging with a variety of companies across technology sector sales channels in the development and publication of this guidance has raised greater awareness of the need for broader cross-sector collaboration to put the recommendations into practice.

HPE utilized BSR's tailored recommendations to engage and promote HRDD across its sales channel, including raising internal awareness of the issues and how to address them as well as building needed buy-in across the companies to take effective action.

Conclusion

Against a backdrop of expanding scrutiny on the downstream human rights impacts of technology sales and use from stakeholders and regulators, now is a key moment in time for tech companies to address human rights due diligence gaps in their sales channels. Because technology sector companies have similar sales channel structures and often similar sales partners, this is ultimately an industry-wide issue that will require collaboration and coordination beyond the boundaries of any single company. The development of best practices for HRDD in technology sales channels lays the foundation for this collaboration, which BSR hopes to expand in the future.

Get in Touch

This case study was written by Lindsey Andersen. If your team is also interested in support on assessing and addressing the human rights impacts associated with your company’s products and services, or if you'd like to work with other companies to address a common challenge, please reach out to us to learn how we can help.

Blog | Thursday December 7, 2023

Tech Against Trafficking Summit: Leveraging Technology to Eradicate Forced Labor

Preview

On November 15-16, Meta and BSR hosted the second Tech Against Trafficking (TAT) Summit in New York. Building on the success of the first TAT Summit that took place in 2022, this year the summit focused specifically on the nexus between technology, forced labor and labor trafficking.  

Over 140 global leaders across the anti-trafficking field, including business, civil society, academia, government, and survivors, came together to discuss how technology can be better leveraged to eradicate forced labor and labor trafficking, and how we can prevent the misuse of technology to facilitate these crimes. 

Expert panels discussed the state of the field in technology and forced labor, highlighting successful cases as well as gaps in the field. Deep dive panels looked at how forced labor is manifesting online (e.g., through recruitment and cyber scams) and in global supply chains; how emerging technologies such as generative AI are shifting the landscape, and how specific solutions such as worker voice applications can be leveraged in ways that lead to meaningful impact. On the second day of the summit, panelists explored how a stronger data ecosystem can be created for labor rights, what good public policy on forced labor looks like, and what businesses can do to disrupt the financial footprint of forced labor. 

Initial outputs from the TAT Accelerator were presented at the summit as concrete examples of how technological innovation can be leveraged by anti-trafficking organizations to help eradicate forced labor and labor trafficking. Polaris and the Issara Institute, the two participants of the TAT Accelerator Program in 2023, described how they are using mobile apps, worker voice solutions, data analytics, and generative AI to serve vulnerable workers around the world.  

“The Tech Against Trafficking Summit is an invaluable opportunity for experts, industry, lawmakers, and survivors to come together and combine their efforts to tackle human trafficking both online and offline. At Meta, we rely on our partnerships with experts dedicated to this space to understand the latest trends in labor exploitation, so we can continue to adapt and strengthen our protections."

Antigone Davis, VP and Global Head of Safety at Meta

Based on the discussion that took place at the summit, TAT provides five key recommendations for the anti-trafficking community: 

1. We must prioritize the experiences and expertise of survivors. Survivor perspectives must be  incorporated into the design, implementation, and evaluation of anti-trafficking technology solutions. Businesses should hire survivors and ensure that a diverse set of individuals with lived experiences are consulted in designing programs and developing technology solutions, including those with different subject matter expertise. 

“How do we build effective data-driven tech solutions to address human trafficking? The simplest answer is to listen to survivors. Just like accessibility design, tech tools built ethically, with and for trafficking survivors will benefit all of us. Otherwise, we risk copy/pasting the very same problems we wish to solve.”

Sabra Boyd, Trafficking Prevention Consultant and Writer with Lived Experience

2. Data sharing is key; standardization and privacy challenges should urgently be addressed. The anti-trafficking field needs to create a stronger data ecosystem where actors across different sectors can share information related to forced labor and labor exploitation. Data needs to be standardized and privacy-preserving mechanisms must be employed to ensure the safety of workers and survivors. Addressing these pre-requisites can help avoid redundancy, and spend less time on data collection and more on data analysis and response. 

3. Industry actors should work together to prevent, identify, and address labor trafficking threats on their platforms. Online platforms are being misused in increasingly complex ways to facilitate labor trafficking. To prevent these risks, companies across the tech industry and beyond (e.g., financial services companies) should work together to share information related to threats and work together to address them. 

4. Stronger collaboration and know-how transfer are needed between buyers and suppliers. Buyers should engage with suppliers as solution partners to cascade human rights due diligence along the value chain, supporting capacity building and continuous improvement, particularly for SMEs. The use of tech solutions should not be limited to buyers and data must flow both ways (not only from suppliers to buyers) to address forced labor in a meaningful way. 

“Google remains invested in TAT and the Global Business Coalition Against Trafficking (GBCAT) because the coalition’s focus areas and its commitment to getting the right work done. GBCAT facilitates business collaboration and supports capacity building of smaller business and suppliers, providing practical guidance on identifying and addressing modern slavery risks.”

Shubha Chandra, Human Rights Compliance Lead, Google

5. Cross-sector collaboration is essential for capacity building and better policies. Businesses should partner with governments to help close the technology knowledge gap in government, and to support the development of effective forced labor regulations locally and globally. On the other hand, policymakers have a critical role to play to incentivize data sharing and corporate transparency. 

“Combatting something as complex and global as forced labor takes collaboration with all stakeholders.  Amazon remains committed to our collaboration with TAT as a critical organization for identifying and supporting solutions. This is the second year that TAT has been able to bring together survivors, policy makers, tech innovators and companies as well as civil society to talk about how we can create solutions together to address this growing challenge.”

Leigh Anne DeWine, Director, Social Responsibility, Amazon

Collaboration and partnerships are crucial if we want to create meaningful reduction in forced labor. TAT will continue to serve as a platform for cross-sector collaboration in the fight against human trafficking, facilitating honest dialogue about the role of technology, its benefits, and shortcomings.  

In 2024, TAT is planning to: 

• Continue to advance the use of technology by anti-trafficking organizations through its Accelerator Program; 

• Explore practical solutions to strengthen the supply chain labor rights data ecosystem; 

• Facilitate industry collaboration to prevent the misuse of technology to facilitate human trafficking; 

• Work with survivor leaders to ensure that these efforts serve the best interest of vulnerable groups. 

Earlier this year TAT joined forces with the Global Business Coalition Against Human Trafficking (GBCAT), an industry collaboration that brings together companies across sectors to combat human trafficking in company operations and supply chains. TAT and GBCAT are actively recruiting new members. Contact us to find out how to get involved. 

Case Studies | Thursday December 7, 2023

Updating Scotiabank’s Human Rights Strategy

Preview

Introduction

BSR worked with The Bank of Nova Scotia (Scotiabank) to refresh its Human Rights Assessment (HRA) and update its Human Rights Statement. This work served as a foundation to develop a forward-looking and actionable human rights strategy to navigate emerging, existing, and potential human rights challenges and opportunities.

As a member of BSR and its Human Rights Working Group, Scotiabank’s ongoing partnership with BSR enabled the Bank to advance its commitment to respect human rights in its own operations and across its value chain.

Background

Scotiabank offers a broad range of advice, products, and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. Scotiabank's team of almost 90,000 employees serves more than 25 million customers across its global footprint.

As a financial services provider, Scotiabank recognizes its obligations and responsibilities to respect the human rights of its employees, customers, and individuals and communities affected by its operations, business relationships, products, and services. Aligning Scotiabank’s activities with the framework established by the UN Guiding Principles on Business and Human Rights (UNGPs) continues to be a growing priority for the Bank. As part of this work, and in the face of increasing global regulatory and stakeholder pressures, Scotiabank sought BSR’s human rights and financial services expertise to work toward the following goals:

• Update Scotiabank’s Human Rights Statement to reflect global trends and stakeholder expectations.
• Improve awareness of the Bank's human rights commitments internally and externally.
• Identify the Bank’s most salient human rights issues and provide recommendations to address and mitigate them.
• Establish a systematic process to assess the effectiveness of actions taken to address human rights issues.
• Increase transparency on Scotiabank’s human rights disclosures to align with growing stakeholder expectations.
• Strive to embed the UNGPs into Scotiabank’s global operations and value chain.

The Challenge

Under the UNGPs, companies, such as Scotiabank, have the responsibility to respect human rights within their own operations and value chain, including the consideration of human rights issues through business relationships, products, and services.

Banks play an important role in our global economy. However, there are multiple ways in which the sector is exposed to salient and significant human rights issues through its operations, supply chains, and business relationships. With increasing stakeholder expectations and greater regulatory requirements on human rights, financial institutions must develop proactive and strategic approaches to identify, address, and mitigate their exposure to key human rights issues in all facets of their business, including but not limited to corporate and retail lending, asset management, and investment banking.

Building on BSR’s first HRA for the Bank in 2016, which informed a four-year strategy and was done in partnership with the Danish Institute for Human Rights, Scotiabank chose to refresh its assessment and strategy to validate and update its salient human rights issues and continue to proactively manage human rights risks and impacts.

BSR’s Approach

In 2020-2021, the Bank commissioned BSR for a second time to conduct a comprehensive HRA to help Scotiabank advance its commitment to prevent and address adverse human rights risks and impacts and improve policies and due diligence processes. The HRA included interviews with more than 50 internal and external stakeholders, an extensive review of internal and publicly available materials, an analysis of regulatory developments, and a human rights salience assessment. Drawing on findings and international human rights standards, BSR identified Scotiabank’s most salient human rights issues across the Bank’s operations or business relationships, products, and services (e.g., lending and investment activity).

Using a proprietary salience assessment tool tailored to Scotiabank’s operations and value chain, BSR analyzed and prioritized relevant human rights risks and impacts based on criteria in the UNGPs, resulting in a priority list of 13 salient human rights issues for Scotiabank to monitor and manage as part of its renewed human rights strategy.

BSR then developed tailored recommendations on the order in which Scotiabank should address their most salient issues and highlighted areas that should be prioritized, including issues that the Bank is directly linked to via business relationships (e.g., clients and suppliers). BSR proposed areas for further action, including updating the Bank’s Human Rights Statement, reviewing existing mechanisms for identifying grievances and providing access to remedy, and exploring additional regional and issue-based actions.

Building on the findings from the HRA, BSR worked with Scotiabank to refresh its human rights strategy, which included incorporating an updated vision statement, integrating the identified salient issues, developing goals for each issue, and identifying issue owners. After developing a strategic framework, BSR facilitated 10 action planning workshops with internal representatives of key functions/departments to gather insights on the current management approach, present best practice examples, and develop strategic recommendations for each prioritized human rights issue.

Concurrently, BSR also assisted Scotiabank in updating its Human Rights Statement, reviewing it against UNGP expectations, benchmarking against peer companies, and providing recommendations based on identified gaps.

Impact and Implementation

Upon completion of the project, Scotiabank had an updated Human Rights Statement with stronger alignment to the UNGPs and corporate human rights criteria and a refreshed human rights strategy that addressed the Bank's most salient issues. Through BSR’s facilitated collaboration with key stakeholders (e.g., employees, NGOs, investors), Scotiabank was able to deepen its understanding of human rights issues, which contributed to building the capacity of internal functions, (e.g., Human Resources, Risk, Legal, Data Ethics) on the UNGPs, findings from the HRA, and best practices in the banking industry. This workstream helped to outline ownership and governance-related responsibilities across relevant teams to contribute to the implementation of the recommendations from the HRA and management and mitigation of Scotiabank's most salient human rights issues.

“At Scotiabank, respect for human rights is fundamental to the way we do business and core to our values. Our refreshed human rights strategy, and the BSR-facilitated workshops that led to its creation, helped us reengage internal stakeholders in meaningful and updated dialogue aligning on clear priorities to advance our human rights commitments.”

Maria Saros, Vice President and Global Head, Social Impact

Conclusion

In light of the shifting regulatory environment and stakeholder pressures globally, Scotiabank and other financial institutions are increasingly recognizing the need and strategic value of developing a comprehensive approach to human rights.

Robust human rights policies and HRAs are the building blocks of an effective human rights approach, providing financial institutions with a framework and systematic due diligence tools to assess and address human rights risks and impacts associated with their operations, business relationships, products, and services and meet their responsibilities to respect human rights under the UNGPs. Equally as important, the UNGPs and emerging regulations expect financial institutions to act on HRA findings with achievable timelines, track performance and assess the effectiveness of their actions, communicate how they are mitigating and managing their identified salient human rights issues, and provide access to remedy when harm occurs.

By adopting a strategic approach to respecting human rights, financial institutions can proactively adapt to address human rights risks and impacts and leverage opportunities within their business strategy and risk management systems to meet expectations from key stakeholders, align with the UNGPs, and manage key reputational, financial, and legal risks.

“Our human rights commitments guide our business governance and management and have wide-ranging impacts across the organization. Our Human Rights Assessment and our updated Human Rights Strategy have helped us proactively formalize a new roadmap for Scotiabank to strategically address and mitigate salient human rights impacts throughout our value chain.”

Meigan Terry, Senior Vice President and Chief Sustainability, Social Impact and Communications Officer 

Get in Touch

This case study was written by Megan Coffey and Kindra Mohr. For more information on how BSR works with financial institutions to advance human rights in operations, investment portfolios, and value chains, please contact our human rights and financial services teams.

Blog | Thursday November 30, 2023

Beyond Compliance: Eight Considerations for Your Materiality Assessment

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The emergence of mandatory disclosure regulations has sustainability, compliance, risk, finance, and legal teams focused on the humble materiality assessment as never before. It’s hard to overestimate the importance of these standards in raising the floor on sustainability performance and ensuring that all businesses understand and are responsible for reporting on important environmental, social, and governance topics.  

With “materiality” serving as the foundation of what should be reported, there is significant new attention paid to how the assessment, which has long been the sole responsibility of the sustainability team, is conducted, documented, and assured.  

In some ways, this is what many of us in the sustainability management field have been working on for our entire careers. We are seeing the mainstream adoption of fundamental sustainability concepts in real-time.  

Yet, as we devote much of our time to answering question after question on whether our approach to materiality is “CSRD compliant” we need to ensure we don’t lose the plot. While we’re ensuring appropriate documentation and sufficiently quantitative, representative, and impartial input (all of which is important and much needed), we must also keep a clear-eyed view of what has historically made materiality assessment such a valuable strategic exercise.  

Reflecting on nearly 20 years of BSR materiality assessments, we know three things to be true: 

• Materiality is as much about the process as it is about the results. Internal and external stakeholder engagement and alignment drive as much, if not more, value as topic identification. 

• You get out of it what you put in. Broad and superficial topic ranking exercises lead to limited insights, but deep engagement, conversation, and debate lead to moments of sudden inspiration that unlock progress on critical priorities for business and society. 

• Our understanding of impact is not perfect and continuously improving. For example, our ability to consistently and comparably quantify climate impacts accelerated dramatically in the past decade, as has our understanding of human rights impacts. But significant gaps remain in social and environmental due diligence and understanding of impacts across the full value chain. 

Looking ahead we see a world of possibility with: 

• Harmonization between assessment and reporting approaches. 

• Strengthening the connections between people, regions, and professional domains. 

• Stronger, more resilient, business strategies that focus on long-term value.  

However, can only turn this vision into reality if we retain a focus on the spirit of the exercise: truly understanding the most important impact areas for each business and authentically engage with affected stakeholders to accelerate progress toward a just and sustainable world.  

With this in mind, we are left with several important methodological questions that we will continue to focus on, with the aim of driving coherence and consensus amongst practitioners: 

• How can materiality and due diligence processes become mutually beneficial and reinforcing? 

• How should we engage affected stakeholders in the process?  

• Should a company assess and report inherent or residual risks or both? 

• When is a qualitative approach considered appropriate? 

• How do we effectively surface the connections between seemingly discrete disclosure topics? 

• Should we differentiate material topics for disclosure from strategic priorities or are they one and the same?  

• How can we better understand and incorporate emerging topics and potential long-term impacts into the process? 

• How can technology support our work? 

All stakeholders engaged in these assessments have a valuable piece of the puzzle and the answers may vary considerably based on unique circumstances. We look forward to working alongside our current and future member companies, peers, and partners to strengthen our collective thinking and ensure our efforts continue to help us reach the future we aspire to build together.

For more from Beth and Materiality, check out her episode in our BSR Insights Audio Series:

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Insights+ | Wednesday November 29, 2023

COP28: Tackling Fossil Fuels, and a Final Push to Keep 1.5 Alive

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Reports | Tuesday November 28, 2023

Just Transition and Modern Slavery

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To plan for and achieve a just, equitable, and inclusive transition, business has a responsibility to ensure its efforts to transition to net zero that does not place people at risk. To this end, BSR’s Energy for a Just Transition collaboration explored the modern slavery risks associated with the energy transition and identified ways to address these risks.  

Affected communities and impacted populations, including workers, must be engaged in dialogue and decision-making processes to ensure the impacts of the transition on their social and economic well-being are considered. It is crucial to ensure that social protections for workers and communities and the rights of workers are upheld. 

Business can proactively manage modern slavery risks by: 

• Outlining expectations on ethical business practices 

• Increasing understanding of modern slavery 

• Identifying and assessing risks 

• Engaging suppliers 

• Providing remedy and supporting survivors 

• Collaborating

The team would like to thank Andrey Pertsov and Claudio Formisano for their contribution to the report.