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Blog | Wednesday December 11, 2019

The New Climate for Ever-Evolving Technology: Q&A with Patrick Browne, Director, Sustainability, UPS

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Artificial intelligence. Autonomous vehicles. Sustainable fuel technologies. New and disruptive technologies are being adopted across all industries, making nearly every company—from agriculture to logistics—a tech company. This development is just one factor contributing to ‘the New Climate for Business,’ the theme of the BSR Conference 2019, which took place in San Jose, California last month. At the conference, UPS Director of Sustainability Patrick Browne joined us to share how UPS, as a logistics company, is adapting to the new climate of ever-evolving technology.

I had a chance to connect with Patrick to dive deeper into the types of new technologies UPS has deployed, the impact they have had so far, and plans to further integrate tech into their sustainability strategy for 2020 and beyond.

How is new technology playing a role in UPS sustainability efforts?

UPS is using innovative approaches to leverage new and disruptive technologies for an environmental benefit. Skyrocketing e-commerce is increasing demand for logistics and delivery services. The challenge for UPS is to meet this need and grow our business without significantly growing our carbon footprint.

We use a range of technologies to help improve the efficiency of our operations. For example, investments in ORION, our groundbreaking route optimization software, helps UPS determine the most efficient delivery route each day. ORION is essential to reducing emissions by minimizing UPS’s total miles driven. In the United States alone, ORION enables us to avoid 100 million miles and 10 million gallons of fuel each year—translating into 100,000 tons of emissions.

Why is it important to leverage new technology in addressing UPS’ energy use?

Our business sits at the intersection of disruptive trends, such as rapid urbanization and e-commerce growth, and associated challenges, such as congestion and climate change. At UPS, we’re embracing these trends and innovating to shape a future in which more people prosper, enterprises run more efficiently, and resources are conserved for future generations.

New technology allows UPS to stay on the cutting edge of sustainability. We’re investing in a range of technologies that could help reduce the environmental impact of last mile delivery, address urban congestion, and optimize daily routes. These shared value initiatives are good for the environment, our customers, and our bottom line.

What new, upcoming technologies is UPS looking into to achieve sustainability goals?

UPS is committed to developing and deploying technologies that improve service and enable more efficient operations of our global logistics network. In August, we announced a minority investment in autonomous driving company TuSimple, which is testing self-driving tractor trailers on a route in Arizona to determine whether the vehicles can improve service and efficiency in the UPS network.

We have long believed autonomous technologies would play an important role in the UPS Global Smart Logistics Network and the company’s transformation. We estimate that autonomous trucks will reduce fuel consumption and carbon emissions by 15 percent. The reduction of fuel consumption leads to a reduction in millions of metric tons of greenhouse gases (GHG). We are eager to determine how new technologies like this will help us increase efficiencies and reduce emissions.

What sustainability challenges require collaboration across industries/systemic responses? How is UPS engaging with partners on these issues?

Addressing global threats like climate change requires UPS—and all actors—to collaborate within the value chain and across industries. At UPS, collaboration is within our DNA. One great example is our Rolling Lab—our fleet of more than 10,000 alternative fuel and advanced technology vehicles. Our involvement with BSR’s Future of Fuels working group has helped accelerate our work in this area.

Another example is related to sustainable e-commerce solutions and final-mile deliveries, especially in dense urban areas. Cities are growing more crowded every day, and people are becoming more reliant on deliveries of everyday goods directly to their doorstep. This convenience creates impacts people may not think about—more miles, more fuel, more emissions. So we’re working with customers, cities, vehicle manufacturers, and other partners to create innovative last-mile delivery solutions. We now have around 30 projects underway in cities around the world. To stay up to date on UPS’s sustainability initiatives, you can subscribe to the UPS Horizons newsletter.

Blog | Tuesday December 10, 2019

Human Rights Day 2019: BSR Reflections on the UN Forum on Business and Human Rights

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Under the theme "Time to Act: Governments as Catalysts for Business Respect for Human Rights," the eighth annual UN Forum on Business and Human Rights brought together over 2,000 representatives of companies, civil society, and states in Geneva in the final week of November to discuss best practices and emerging issues in business and human rights. BSR attended the event both to share our learnings from working with leading companies on business and human rights over the course of the year and to keep our finger on the pulse of the latest trends.

As we look ahead to 2020—and to the dawn of this decisive decade when the decisions we make as a society on how to address economic inequality, climate change, technological innovation, and political polarization will shape our shared future for generations to come—what are the pivotal human rights issues that businesses should be paying attention to? Here’s what we heard at the Forum:

States and regulators are responding to the call to action to protect human rights through mandatory due diligence and increased regulation.

A crucial discussion throughout the Forum highlighted the role of states and regional regulators to take on their duty to protect human rights and close the gap in implementing the UN Guiding Principles on Business and Human Rights (UNGPs), as Pillar One, the state duty to protect human rights, remains the true catalyst to realize corporate respect beyond voluntary measures.

Mandatory due diligence in national legislation is gaining ground, with the latest laws being enacted in France, the Netherlands, and Australia and with more legislation proposed. What’s more, mandatory frameworks are only expected to increase. Comments by the European Union, the Council of Europe, and the OECD all stressed the importance of policy coherence at the state and regional levels. Regional bodies such as the EU and the African Union—which will soon be publishing its first human rights and business policy—are playing a growing role in creating a level playing field and strong systems for human rights protection and business accountability. Similarly, trade investments, public procurement practices, and state involvement in investments such as mega-sporting events must integrate human rights due diligence in project screening as well as regulatory measures to ensure law and trade agreements include respect for human rights. With interventions by states from all over the globe, notable leadership was taken by northern European countries Norway, Sweden, the Netherlands, and Finland, reflecting the region’s long-standing commitment to sustainable development and human rights.

Translating businesses’ numerous commitments to gender equality will require practical action.

Equality and inclusion must be prominent enablers in realizing the UNGPs.

The world is facing a profound inequality crisis as the divide between low- and high-income groups continues to deepen and discrimination remains a burden to the realization of human rights, especially for vulnerable groups. Creating and fostering equal and inclusive societies was the theme of many sessions, with emphasis on equal workplaces and supply chains.

BSR was represented on two panels, the first on the role of the private sector in protecting LGBTI rights and the second on applying a gender lens to the UNGPs in practice. According to the panel facilitated by Dan Bross, Executive Director of the Partnership for Global LGBTI Equality (PGLE), commitment to implementing the UN Standards of Business Conduct must be a priority of business, and joint action to decriminalize sexual orientation will be central to creating inclusive workplaces and enabling regulatory environments.

Similarly, we are at a point where translating businesses’ numerous commitments to gender equality will require practical action. BSR Manager Francesca Manta’s contribution to the panel on gender and the UNGPs stressed the importance of ensuring gender-specific impacts and issues are made visible and taken into account by using a new framework for context analysis and data collection in global supply chains. Diversity and Inclusion policies and commitments to the Women’s Empowerment Principles (WEPs) as well as to the UNGPs may remain a paper exercise if differentiated impacts are not identified, monitored, and acted upon, using operational tools such as the Gender Impact and Data tool (GDI), which BSR developed for supply chain due diligence. It is time for due diligence to stop being gender-blind and make women visible and counted.

In an increasingly fragile world characterized by rising violence, closing civic space, and more authoritarian governance, business has a critical role to play in preventing corrupt practices and human rights violations. 

Addressing corruption and conflict must become a priority of business and states if we are to realize a future of peace and stability.

In line with this year’s theme, the Forum had numerous sessions on the linkages between corruption, conflict, and human rights and the role both states and companies must play to eradicate unethical practices and resolve regional and global conflicts.

Whispered already as the theme of next year’s Forum, corruption took center stage with discussions ranging from the integration of compliance and human rights due diligence processes to holistic approaches to context analysis such as the one at the session facilitated by the UN Global Compact networks. Corruption is often seen as a ‘victimless crime,’ and the panels urged participants to recognize corruption as a strong contributor to human rights abuses. In an increasingly fragile world characterized by rising violence, closing civic space, and more authoritarian governance, business has a critical role to play in preventing corrupt practices and human rights violations. The UN Working Group on Business and Human Rights is currently working on the connection between anti-corruption efforts and implementation of the UNGPs to inform its 2020 report to the UN Human Rights Council. In conflict-affected and high-risk areas, part of business’s responsibility to respect human rights involves actively combating corruption by integrating their anti-corruption and human rights efforts. Companies cannot successfully respect human rights without also addressing issues of corruption in the environment where they operate and that impact their supply chain.

The digital sphere is now indivisible from human rights impacts.

In a world where nearly every company can be considered a technology company, another important theme at the Forum was how human rights are affected by digital activities and what due diligence will mean in this sphere regardless of industry. Discussions spanned from the use of AI and biometrics in high-risk sectors such as defense and surveillance, to what accountability, attribution, and remedy look like in case of adverse impacts from digital activities, to how even digital marketing has far-reaching impacts on organized crime and online and offline hate crimes, and also explored how due diligence is key to ensuring ethical advertising by any brand. Every company should seek to understand the nature of its digital activities—data collection and processing, content management, advertising—and prioritize due diligence to understand human rights impacts from both intended and unintended misuse of their technology or digital activity. States, particularly those in Europe thanks to GDPR, are more and more involved in corporate dialogue and regulations in this sphere, including interesting initiatives such as the Tech Ambassador, which was instituted by Denmark to promote diplomatic activities with technology companies.

Climate is the biggest business and human rights issue of our time, and aggressive emission reductions by both states and businesses should be a core human rights demand.

Climate is our biggest challenge and will have profound human rights implications.

Another theme throughout the three days, the Forum stressed how the climate crisis is now inextricably linked to the current and upcoming human rights impacts—on human life, inequality, health, access to livelihoods, migration. The Forum concluded with a powerful final session on the theme where a unanimous panel agreed that climate is the biggest business and human rights issue of our time and aggressive emission reductions by both states and businesses should be a core human rights demand. There are indeed positive developments and companies that are truly transitioning to fossil-free business models, such as the panelist Scania, but the pace is still too slow to keep emissions under control, particularly in light of the newly published UNEP Emission Gap Report 2019 which predicts increase in temperatures by 3 degrees Celsius. Again, policy coherence was called upon to urge states and businesses to be true to their commitment to the Paris Agreement and act immediately to address climate change in how they operate and our growth models.

We believe these key themes will take even more prominence as we enter the decisive decade next year, and we look forward to working with our members and partners to accelerate change and contribute to a just and sustainable future. To learn more about our work on human rights, please don’t hesitate to reach out and connect with our team.

Blog | Monday December 9, 2019

If Corruption Is a Cancer, How Do We Cure It? Lessons for International Anti-Corruption Day

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Twenty years ago, researchers and experts were relatively oblivious to issues of bad governance and corruption, but today, the link between the quality of government institutions that implement policies controlling corruption and economic development is clear. However, in many parts of the world, corruption is still one of the biggest obstacles to social and economic development. As the international community’s focus on corruption has increased, the following question has been increasingly asked: Are we winning or losing the battle?

First, fighting corruption may mean different things to different people and is unquestionably driven by different factors. In a company, the focus for a compliance officer or the head of the legal department is on legal risks; i.e., if a company engages in corrupt behavior, this may lead to massive investigations, potential prosecution, high fines, and senior management liability. For others, tackling corruption leads to a better and safer work environment, reduces operational costs, and avoids delays.

In the long-term perspective, being a clean company makes it easier to do business.

However, regardless of what the argument is internally, questions from front-line employees working in locations prone to corruption will be: “What are our competitors doing about it? If we say no and everyone else says yes, how can we eliminate it? What are governments doing about it? We can’t change the world alone!” As a compliance officer, you may have heard this input during compliance training sessions.  

Arguments like these are hard to answer and are one of the reasons why the Maritime Anti-Corruption Network (MACN) was created in 2011.

MACN now has 128 members, and our collective voice is strong when engaging in dialogue with governments. Within the network, members can discuss challenges and solutions to tackle corruption at the front line with one another. MACN’s in-country collective action programs mean that companies are not alone when saying ‘no’ to corrupt demands. In our case, the ship before you, and after, will have said ‘no’ to illegal demands. Captains and crew will be better protected by tested processes and procedures and by weight of numbers.

In answering the above questions, MACN members can say:

• We are working with peers and partners to address these challenges with global governments.
• We are stronger together.
• We may not change the world today but working together is a great place to start.

A few lessons from MACN that can be replicated in any industry are:

• Multi-stakeholder dialogue works. Blaming someone who is not in the room gets us nowhere. We need to create and foster dialogues and forums where the public and private sector can come together, where issues can be addressed, and where we move away from general statements about corruption and work on realistic outcomes.
• A sector-specific approach. Addressing issues unique to the sector helps with internal arguments so that front-line staff do not feel alone. They feel supported by a wider external argument of building a strong industry voice in combination with governments and other stakeholders.
• Identify drivers to improve the operating environment. When approaching governments, MACN’s argument is not to address corruption, but to support governments with experience and insights from our member base to reduce trade obstacles. This links the challenges to the government’s own priorities, which, in our case, focus on international seaborne trade.
• It is not a blame game. One of MACN’s key pillars is to support efforts and raise the bar within our own industry. This approach helps governments understand that it is not only about them. It is important we articulate that there is both a supply and demand side to this issue that need to be addressed, and it requires efforts on both sides to fight corruption.

In order to cure the cancer that is corruption, we must identify the challenges and discuss practical solutions that can implemented now—and not tomorrow. We must find ways to bring different stakeholders to the table, engage with industry peers to create a level playing field, and implement solutions on the ground.

Blog | Thursday December 5, 2019

Blockchain through the Whole Supply Chain: Traceability at the Source Depends on Trust

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This blog is the second in a series where BSR and Envisible document their project to support a global brand and its supply chain partners to establish a blockchain-enabled traceable supply chain that delivers sustainability benefits to all the actors in the supply chain. It follows up on this blog, originally published in July 2019. 

In the green hills of a small village, a group of about 300 farmers and members of a smallholder co-op are gathered around a converted schoolhouse, waiting.

Inside the building, a team from the cooperative is managing a well-organized crop sale as farmers file in one by one to participate in the sale process: presenting their product, having it graded and sorted, weighing it, and agreeing to the price. Finally, they are issued a paper bill to show what they are owed, and then they watch as the cooperative team enter the details on an Excel spreadsheet.

Our team (BSR and Envisible) was there to digitize and simplify this last step—collecting data electronically—with the hope of building upon the trust-based relationship that already exists between the co-op and the farmers and then enabling this data to be shared downstream to the rest of the supply chain, ultimately a global corporation and its consumers.

“Card,” Léon said to the farmer standing before him. Léon is a member of the co-op team responsible for ensuring that the weight, quality, and price data are correct and accurately recorded at the last step of the process before the farmers are paid.

The farmer reached into his bag and pulled out a newly issued membership card that identified him as a card-carrying member of the cooperative. Léon scanned the QR code on the card with his mobile phone, prepopulating a Wholechain digital record with key information about the farmer, coop, and location, and then added the agreed weight of the product sold. Finally, he clicked “send” to electronically send the record to the trader. Léon looked up, pleased.

“We’ve done 200.”

Léon was amazed that the app worked on the limited connectivity of the mobile network in the village (just above 2G) in the jungle. And he liked it significantly better than the manual data entry that he was used to.

At the end of a long day, 227 records of farmer transactions were saved on the blockchain, all reinforcing the facts: 227 farmers had shown up that day in that village and had sold hundreds of kilos of a critical agricultural commodity to their cooperative. These transactions, now immutable records on the blockchain, would form the foundation of a traceable chain of custody, forever linking these farmers to the global supply chain and ultimately the products sold far away from the quiet villages.

The foundation of this traceable supply chain is now in place, and the next steps over the coming months will be critical to completing the picture. Digitization and blockchain alone do not improve farmers’ lives; traceability is not equal to sustainability. What they do is provide a gateway—an immutable view into the specific community providing the raw material, altering how we think about raw material supply chains. Involving smallholder farmers directly in a traceability system is a powerful way to lay the groundwork to ensure that sustainability requirements are aligned to the needs of this key community since every transaction ultimately links back to them as the source.

The traceability system needs to make sense for and provide value to the farmers at the source. We left the village and the sale not only with digitized records on the blockchain, but with the following lessons that are critical for success when digital tools are introduced into supply chains such as this one:

1. Simplicity is critical. During the sale, the team members were doing multiple tasks at once that demanded their attention. The system needs to be simple, easy to use, and work in challenging network environments.
2. Digital tools must fit into existing systems. Rather than creating new processes, applications must enhance and reinforce existing ones. In the case of this sale, Wholechain only served to simplify an existing system.
3. Digitization can enhance trust, but certainly not replace it. What we saw that day in the village was a great reminder that blockchain does not create trust. Blockchain is not “trustless” either. Blockchain enhances and builds on trust that is already there.

There is no denying that digitization can provide value to players way upstream: the farmers and cooperative appreciated the enhancements and are looking forward to more. Technology and digitization was seen as a reward for good practice and hard work between the farmers and the buyer. The connection has been established between the brand and the farmers at the source of a critical raw material. Let’s see what we can build from here.

Blog | Tuesday December 3, 2019

Challenges and Opportunities for Gender Equality in a European Luxury Supply Chain

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What is the significance of the prized “Made in Italy” label that is well known in the luxury world?

Many fashionistas will associate it with glamorous designers creating sophisticated and high-quality products, from ready-to-wear apparel, fashion accessories, textiles and fabrics, and shoes to leather goods and eyewear.

Many experts of the luxury sector will know that many of these products are manufactured by a great number of small- and medium-sized enterprises (SMEs). These are generally highly specialized, yet still predominantly artisanal companies, and they are usually family owned and employ less than 50 employees on average. These companies are considered a fundamental asset to the luxury industry and to Italy in general. For example, Italy represents 87.8 percent of the global supply chain of the Kering Group, one of the major global players in the luxury sector. According to a recent study, a third of the global luxury goods market is Italian, and in 2018, it represented four percent of the Italian GDP.

But with these data, we are just scraping the surface: WHO is really behind your “made in Italy” bag, scarf, your glamorous glasses?

The short answer is: most of the time, women.

The long answer can be found in the report Supporting Women in the Luxury Supply Chain: A Focus on Italy, which found that while women are vital to the luxury sector, gender inequality throughout the supply chain still impacts them in the short- and long-term. However, both brands and suppliers are well placed to lead efforts towards improved gender equality in Italy, in both supply chains and in the country’s overall sociocultural context.

The study presents the results of a year-long research study commissioned by Kering and its family of Italian brands, Bottega Veneta, Gucci, Kering Eyewear and Pomellato. This study was conducted in partnership with local organizations Camera Nazionale della Moda and Valore D. With this project, BSR and a local partner Wise Growth engaged 189 suppliers of the Italian luxury supply chain to gather insights related to gender equality policies and practices as well as perceptions and experiences of 880 workers, including 620 women workers.

Women are key to the luxury sector. As outlined in a report published in 2018 by BSR’s Responsible Luxury Initiative, in 2015, women accounted for 85 percent of luxury sales, representing about four percent of designers and the majority of people entering the industry across the value chain. This gender ratio was also apparent in the research study—across the 189 suppliers involved in the research, women represented 63 percent of the workforce.

Although the “Made in Italy” label is well regarded, Italy itself, like many other countries, still faces difficulties with gender inequality. According to the World Economic Forum Global Gender Gap Report 2018, gender inequality in Italy is particularly evident when it comes to women’s active participation in the labor market as they face more limited access to job opportunities and career progression and greater exposure to vertical segregation and harassment, among other obstacles.

Despite these facts, little was known to date about gender inequalities that may be faced by women working in the luxury supply chain, their status, and the predominant challenges they face. This research intends to contribute to closing this gap of knowledge as well as outlining potential next steps to address the issue. The report draws four conclusions:

1. Women do not have access to the same working conditions and economic opportunities as men: Women represent 63 percent of the workforce, but only 25 percent of management positions, remaining predominantly in traditional roles as blue collar workers within the factories. Lower positions lead to lower salaries and the perception among women of discrimination in remuneration and that they cannot earn a living wage.
2. Women rarely hold leadership positions and have limited opportunities of professional career advancement: Breaking the glass ceiling is particularly challenging, and 59 percent of women feel discriminated against across the employment cycle. Overall, and not surprisingly in the context of SMEs, there is overall limited investment in career advancement and professional training opportunities. Women also tend to accept the lack of career growth prospects as a precondition tied to their interest in having more flexible working hours, and they also stigmatize female colleagues in leadership positions.
3. The impacts of familial responsibilities are seen as obstacles to gender equality: Motherhood in particular is perceived as a burden by 39 percent of women, who fear its consequences on their job upon returning to work and its overall impact on getting and sustaining a job and on professional growth. In addition to that, shared parental responsibilities are still rare: for 69 percent of women, domestic and family care responsibilities still predominantly fall on their shoulders and impact their work-life balance.
4. Women have a harder time voicing challenges and concerns: This study did not uncover highly concerning results in terms of the number of cases of sexual harassment that women may have experienced or heard of in their lives. At the same time, there is relatively low awareness of what constitutes harassment and inappropriate behaviors. Much more would need to be done to educate workers on this issue as well as creating an enabling environment for voicing concerns through grievance mechanisms and speak-up channels and ensuring that women feel empowered and confident enough to voice their concerns.  

In terms of potential next steps, there are clear opportunities for the luxury sector to lead efforts towards more gender-inclusive supply chains in Italy and more generally contribute to breaking down barriers and gender stereotypes in and out of the workplace. To achieve this and to build a potential path forward for future programming in support of gender equality, the report outlines a set of recommendations structured under BSR’s “Act, Enable, Influence” framework.

Following the research and the recommendations outlined in the report, Kering and its family of four brands have committed to take action to help advance gender equality through supplier engagement and in cooperation with relevant stakeholders. We look forward to seeing how this will contribute to driving impact and positive outcomes for women in the Italian luxury supply chain.

If you are interested in learning about how BSR can support you in promoting gender equality in your supply chains, please contact us.

Reports | Tuesday December 3, 2019

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

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

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

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

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

This paper aims to:

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

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

Blog | Thursday November 21, 2019

Can Corruption in Your Value Chain Lead to Complicity in Gross Human Rights Abuses?

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This blog forms part of a series on conducting enhanced human rights due diligence in conflict-affected and high-risk areas.

The jury may still be out on whether freedom from corruption should be a human right, but in the business and human rights community, there is increasing momentum for articulating the relationship between corrupt business practices and their associated negative human rights impacts. These impacts are amplified in likelihood and severity when they happen in conflict-affected and high-risk areas, such as Myanmar, Colombia, or Palestine. Should businesses fail to conduct conflict-sensitive human rights due diligence and integrate their anti-corruption and human rights efforts, both upstream and downstream of their business operations, they may find themselves directly or indirectly linked to and complicit in gross human rights abuses that are conducted by a third party. These include human trafficking, child labor, and even crimes under international humanitarian and criminal law like genocide and crimes against humanity.

In situations like these, traditional human rights due diligence is often insufficient. BSR recommends enhanced human rights due diligence that is both conflict-sensitive and that integrates corruption risk. Tying these two narratives more closely together will reveal far more insight about the nexus of power relationships that companies need to navigate to do business with integrity.

Should businesses fail to conduct conflict-sensitive human rights due diligence and integrate their anti-corruption and human rights efforts, both up- and down-stream of their business operations, they may find themselves directly or indirectly linked to and complicit in gross human rights abuses that are conducted by a third party.

Corruption can lead to negative impacts on human rights; as such, part of business’s responsibility to address human rights impacts involves actively combating corruption. In some cases, the link between corruption and negative human rights impacts is clear: corrupt practices and illegal building extensions were contributing factors in the tragic collapse of Rana Plaza in Bangladesh in 2013, which led to more than 1,100 deaths.

In other cases, the link between corruption and human rights is more indirect, but the consequences are no less severe. Businesses may find themselves engaging with partners, suppliers, customers, or end-users who deal with military-associated entities or politically exposed persons. Sometimes, a national government may be the perpetrator of gross human rights abuses. Many businesses have little choice but to enter partnerships with government bodies, particularly in industries such as oil, mining, telecommunications, and infrastructure. This can leave them directly linked to human rights impacts driven by the government in question.

One example of exposure to human rights risks as a result of corruption is through corporate philanthropy. In some cases, there is a fine line between philanthropic donations and facilitation payments for “getting things done” and securing permission to operate from authorities in challenging legal environments without effective rule of law. These donations could be provided by the in-country business unit, by business partners, by landowners from which your company leases land or the land management business. In these situations, the link between corruption and complicity becomes clear when the donations are directly or indirectly funding military operations or authoritarian regimes linked to gross human rights abuses. This link was made explicit by the UN Fact-Finding Mission to Myanmar in an August 2019 report.

Another example of corruption-related human rights risks can be found deep within the supply chain: the OECD recently published a report on the role that corruption plays in amplifying and perpetuating human rights abuses associated with armed conflict in copper and cobalt supply chains in the Democratic Republic of the Congo. Related activities include illegal payments to government officials and business relationships with entities that are partly or wholly owned by criminal or military enterprises. These suppliers are often several times removed from the multinational company that is sourcing the raw materials, which makes building leverage and oversight challenging. In this case—and as BSR wrote earlier this year—collective action could incentivize suppliers throughout the supply chain to support an anti-corruption environment.

BSR recommends enhanced human rights due diligence that is both conflict-sensitive and that integrates corruption risk. Tying these two narratives more closely together will reveal far more insight about the nexus of power relationships that companies need to navigate to do business with integrity.

At BSR, we help companies to integrate corruption risk into their human rights due diligence. Our enhanced human rights due diligence toolkit was developed for use in conflict-affected and high-risk areas. This toolkit includes support for integrating the compliance and corporate responsibility/human rights teams to coordinate on assessing the risk of business partnerships in high-risk contexts, as well as recommendations for enhanced know-your-customer, beneficial ownership, and political/military-associated entity background checks.

If you would like more information on how BSR can support you to address conflict- and corruption-related human rights risks in your business value chain, please don’t hesitate to get in touch with our team.

Blog | Tuesday November 19, 2019

Action for Sustainable Derivatives: A BSR/Transitions Collaboration

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Palm-based derivatives are a key ingredient to many products we use on a daily basis, such as soap and shampoo. Sourcing palm oil or palm kernel oil responsibly, however, is a challenge for the companies behind these products. Despite increasingly common commitments to ‘No Deforestation, No Peat, No Exploitation’ (NDPE) in both the downstream and upstream industry, the situation in the field remains critical—palm oil production continues to be a source of deforestation and human rights abuses, as highlighted by Greenpeace’s recent Countdown to Extinction report:

• In 2016-2017, Indonesia lost three million hectares of natural forests.
• Changes in land use in Indonesia and Malaysia due to the palm industry have led to the emission of approximately 500 million tons of CO2e each year from 2015-2018.
• The International Union for Conservation of Nature (IUCN) found that palm oil production has affected at least 193 threatened species.
• Evidence of human rights abuses persist throughout the sector in Indonesia and Malaysia.

To respond to these challenges, companies must undertake profound changes in their operating methods to optimize their social and environmental footprint. These necessary changes must be increasingly ambitious to adequately address the critical environmental and social issues related to palm derivatives production and distribution.

To accelerate compliance of supply chains with deforestation-free and responsible sourcing principles, BSR and Transitions are excited to launch a new collaborative initiative for corporate buyers of palm-based derivatives, alongside 11 member companies, including L'Oréal, Beiersdorf, The Body Shop, Croda, The Estée Lauder Companies, Henkel, and Zschimmer & Schwarz Italiana: Action for Sustainable Derivatives (ASD).

Ensuring a Sustainable Supply Chain

This collaborative approach was born out of a recognition that, while companies are increasingly seeking to accelerate compliance with deforestation-free and responsible sourcing principles, individual supply chain dynamics and overlapping comparable approaches have led to significant duplication of efforts in this area.

By harmonizing requirements, standardizing tools and methodologies, and mutualizing efforts, ASD intends to increase the transparency of the global derivatives supply chain, collectively monitor risks and activities along the supply chain, and implement collective action projects to address social and environmental issues on the ground. By moving beyond competition and joining forces to address non-compliance issues in the supply chain, ASD participants have the opportunity to translate individual policies into concrete results.

A Vision for the Future of Palm Derivatives

ASD will address key challenges such as deforestation, climate change, resource consumption, respect for local communities, and working conditions. Through collaborative approaches with all direct and indirect stakeholders of the value chain, the initiative seeks to tackle issues at every step of the supply chain in order to reduce impacts and sustainably support the evolution of practices linked to the production of palm oil. This collaboration is designed to achieve the following results:

• Create a global, transparent mapping of the palm derivatives supply chain.
• Maximize the potential for success in reaching the 2020 NDPE target by sharing solutions.
• Harmonize approaches on transparency, risk monitoring, and evaluation.
• Explore opportunities for multilateral collaboration and collective action, including on pilots of tools, methodologies, and sustainable field projects.
• Unite as a sector to increase external recognition of the singular complexity of the palm derivatives supply chain and to leverage influence over major upstream supply chain players.

BSR and Transitions aspire for this collaborative work to drive broad-reaching impacts that create social and environmental value. We invite companies from cosmetics, detergent, and oleochemicals industries to join ASD. For more information, please contact us.

Blog | Wednesday November 13, 2019

One Year In: How CoLab Is Mobilizing the Collective Power of Business

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From the climate crisis to a rise in employee activism, many factors are contributing to the creation of a new climate for business. These new challenges will not be solved by any one actor: no single government, business, or NGO acting alone can address the issues of today. What the world needs are new collaborations of unprecedented scale and ambition to create a future in which both societies and companies thrive.

To that end, at our 2018 Conference, BSR launched CoLab, an incubator and accelerator of private-sector collaboration, to mobilize the collective power of business to solve some of the world’s biggest sustainability challenges. Driven by the collective ingenuity of business and stakeholders, CoLab ideates, designs, and scales collaborations that have transformational impacts and contribute to realizing the Sustainable Development Goals. 

CoLab focuses on the Ideate, Design, and Explore phases of private-sector collaborative solutions. Successful solutions are then moved forward to Accelerate and Scale in our portfolio of active Collaborative Initiatives. Our 2019 progress report, Mobilizing the Collective Power of Business, highlights our accomplishments over the past year, which include the launches of the following Collaborations:

• Value Chain Risk to Resilience (R2R) seeks to build climate resilience for communities, farmers, and workers along value chains.
• Action for Sustainable Derivatives (ASD) promotes responsible palm oil sourcing and collective action to increase transparency and address social and sustainability issues.
• Partnership for Global LGBTI Equality (PGLE) is a coalition of organizations committed to leveraging their individual and collective advocacy to accelerate LGBTI equality and inclusion globally.
• Supply Chain Living Wage Data Platform (SCLWDP) aims to leverage existing and new sources of information to create accurate global living wage data.
• Sustainable Air Freight Alliance (SAFA) is a buyer-supplier collaboration steering responsible air freight via sustainable procurement and decarbonization.

Looking ahead, we have developed the following focus areas for 2020. These are areas where we see strong demand for action, where we can add strategic value, and where there is potential for growth and impact. We plan to continue to grow our portfolio of collaborations in these areas: 

• Sustainable “Green” Freight
  • Challenge: Zero-emission freight by 2050 is a major global goal requiring collaborative innovation at scale.
• Inequality
  • Challenge: Companies are under pressure to create high-quality jobs with living wages and affordable products and services.
• Sustainable Commodities
  • Challenge: Supply chains must change to become resource- and cost-efficient, equitable to workers and partners, and transparent and traceable.

In addition, outside of these broad focus areas, we have also identified and are pursuing specific priority opportunities to address the following key sustainability challenges:

• Ocean Plastics
  • Challenge: Asia is the source of 60 percent of plastic waste and coordination is needed to address this issue.
• Circular Fashion
  • Challenge: There are potential negative impacts of a shift to circular fashion on job opportunities and quality.
• EU/Asia Sustainability Reporting
  • Challenge: Improving sustainability reporting is an ongoing requirement and challenge for companies, with differing standards and practices.

As we look ahead to the 2020s and the looming 2030 deadline for the Sustainable Development Goals, it is clear that collaboration will be key if we hope to achieve the Global Goals. BSR’s CoLab is ready to work with you on existing opportunities—or on the ideation of new business-led sustainability collaborations. If you’re interested in joining an existing collaborative initiative, helping to launch a new collaboration, or looking for more information, please reach out and connect with our team.  

Reports | Wednesday November 13, 2019

CoLab Progress Report: Mobilizing the Collective Power of Business

Preview

From the climate crisis to a rise in employee activism, many factors are contributing to the creation of a new climate for business. These new challenges will not be solved by any one actor: no single government, business, or NGO acting alone can address the issues of today. What the world needs are new collaborations of unprecedented scale and ambition to create a future in which both societies and companies thrive.

To that end, at our 2018 Conference, BSR launched CoLab, an incubator and accelerator of private-sector collaboration, to mobilize the collective power of business to solve some of the world’s biggest sustainability challenges. Our 2019 progress report, Mobilizing the Collective Power of Business, highlights our accomplishments over the past year and outlines opportunities for engagement with CoLab in 2020.