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Blog | Monday March 5, 2018

Managing Supply Chain Water Risk: New Capacities for New Challenges

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In 2016, the ICT industry came under focus when environmental inspections found that 18 centralized water treatment plants in Shanghai had issues with heavy metals exceeding legal limits. As a result, the two large-scale electronics plants responsible for releasing these pollutants are in the process of being forced to stop operations. More recently, the Chinese government shut down an estimated tens of thousands of factories in 2017 as part of its broad efforts to more strictly enforce environmental regulations.

Incidents like this have put the spotlight on supply chain operational risks, prompting brands to pay more attention to the Institute of Public and Environmental Affairs (IPE) Corporate Information Transparency Index (CITI)—in particular IPE’s CITI Index Indicator 2.3, which focuses on issues around centralized wastewater treatment. Brands like Apple, Dell, Ericsson, and Foxconn have mapped their suppliers’ paths of wastewater discharge, incorporating suppliers’ centralized wastewater treatment facilities into the scope of their environmental compliance screening.

Last November, Dell and BSR invited a range of stakeholders to a roundtable in Suzhou, China, to explore how to address shared water issues in the Tai-hu Lake catchment area. Two important principles provided the foundation of this meeting: first, that water scarcity is a risk that needs to be managed to ensure supply chain sustainability. And second, that water is a common good with multiple competing interests. A growing movement of companies and international initiatives are specifically targeting water resource management as a key component of supply chain sustainability. 

It has long been recognized that water scarcity will be a defining issue of the 21st century. Climate change, population growth, and competing demands on limited water supplies have all contributed to water increasingly becoming a focus for supply chain sustainability. A study conducted by McKinsey found that 90 percent of air, soil, and land impacts associated with consumer goods are associated with supply chains.

Traditional approaches to managing the environmental risks of supply chains have taken one of two forms:

• Product stewardship focuses on reducing environmental impacts associated with product design, packaging, and material use.
• Process stewardship takes a life cycle approach to managing impacts associated with the production, distribution, and end-of-life product management.

Both approaches help companies identify how to manage risks, reduce impacts, and identify important cost savings. Today, increased transparency and disclosure requirements in places like China are underscoring the need for companies to better manage their water resources.

This has been highlighted by the UN Global Compact’s CEO Water Mandate, which recognizes the need for companies to engage on water issues through their direct operations, supply chains and watershed management, public policy advocacy, community engagement, and transparency.

By initiating discussions in the Tai-hu Lake catchment area, Dell has taken the next step in managing these risks more holistically. Going beyond product and process stewardship, the company is now dealing with the broader risks to its supply chain associated with watershed management. This type of environmental stewardship has been traditionally led by governments and requires more skills, tools, and resources than companies have traditionally used in product and process stewardship.  

Ultimately, managing water scarcity will require businesses and their suppliers to:

• Broaden the scope of risks in their supply chains to include water scarcity, floods, and related issues.
• Move from short-term thinking to managing risks over longer time horizons.
• Develop capacities in watershed management, stakeholder outreach, and public policy advocacy.
• Develop risk monitoring systems and capacities within their supply chains.
• Share risk information with other stakeholders in a watershed, including potential competitors.

Responding to this challenge not only addresses the broader concern of water scarcity, it is also addresses the fundamental ability for a company like Dell to continue to operate. This extends to the needs of suppliers’ employees and their families living in affected watersheds.

The challenges of water scarcity will require businesses to expand their supply chain sustainability efforts to include the notion of shared risk over longer periods of time. Dell has started the process of managing this shared risk through its stakeholder consultations with other water users in the Tai-hu Lake catchment area in China.

At BSR, we will continue to work with our members to identify the strategies required to respond to the ever-increasing set of global challenges that demand collaboration and innovation. Contact us if you’d like to learn more about how we can work with you on water and supply chain sustainability management.

Blog | Wednesday February 28, 2018

Collaboration: How Business Must Lead to Achieve Sustainable Development

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How does business lead?

When we think of leadership, we often think of a single, iconic leader. We celebrate leading companies for their bold actions on sustainability risks and opportunities; yet one of the most important ways business leads is through collaboration.

In the past year, it has become increasingly clear that the world is changing fast—and profoundly. We are faced with challenges like catastrophic climate change, increasing inequality, and the rapid emergence of new technologies that are disrupting societies and raising new, fundamental ethical questions. These are not new phenomena, but the pace and scope of change is picking up. These challenges also come at a time when established governance models are being questioned—or outright failing—which makes new leadership constellations all the more necessary.

In partnership with The Rockefeller Foundation, today BSR is launching a new report, Private-Sector Collaboration for Sustainable Development. This report is based on the premise that business must take a leadership role through collaboration, both to ensure the future of sustainable business and for the benefit of society as a whole. As we look to meet the UN’s Sustainable Development Goals (SDGs) and implement the Paris Agreement on climate change, it is clear that we must transcend the status quo of individual action to foster collaboration for impact at scale. We must mobilize, leverage, and direct the transformative power of business’s collective resources and capabilities toward these ends.

We need more business collaboration, but what we need most are well-designed, well-governed, accountable, and impactful collaborations. This report is a contribution in that direction. It sets out to identify the key success factors for collaboration and provide concrete guidance to business leaders on impactful collaborations. It has been informed by the rich experiences and thoughtful perspectives of practitioners from many parts of the private sector as well as insights from civil society organizations that have worked closely in partnership with companies.

Collaborative leadership has been a fundamental tenet of BSR’s 25 years of work to create a just and sustainable world. Our strategy emphasizes the need to ideate, design, and explore—and subsequently accelerate and scale—powerful collaborations that yield transformational change. We believe that the time is right to pursue such opportunities vigorously, aggressively, and with focus. We have written this report to provide guidance that we hope will encourage more businesses to engage in collaborations—and help them do so more successfully.

For The Rockefeller Foundation, building strategic partnerships is a core component of our strategic approach. We believe that creating coalitions that engage the full range of actors across a given system—from the private sector to government to civil society—can accelerate breakthroughs that deliver impact at scale. We hope that this guide to engaging the private sector in designing and implementing high-impact collaborations for sustainable development will serve as a catalyst for the next generation of transformative results.

We will only succeed in achieving the SDGs if we truly work together, combining our capabilities, resources, and assets. We invite you to join us to create shared solutions to global challenges—to lead through collaboration.

Reports | Wednesday February 28, 2018

Private-Sector Collaboration for Sustainable Development

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Why Read This?

In the past year, it has become increasingly clear that the world is changing fast—and profoundly. We are faced with challenges such as catastrophic climate change, increasing inequalities, and the rapid emergence of new technologies that disrupt societies and raise new, fundamental ethical questions.

To tackle these challenges, we must transcend the status quo of individual actions to foster collaboration for impact at scale. We need well-designed, well-governed, accountable, and impactful collaborations.

Drawing on BSR's 25 years of experience in designing, implementing, and scaling collaborative initiatives, this report identifies the characteristics of successful collaborations and helps companies better understand how to prepare for and contribute to their success.

Blog | Tuesday February 27, 2018

Next-Generation Private-Sector Collaboration for Sustainable Development: Q&A with Gavi

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This blog is part of a series of interviews on how the private sector contributes to sustainable development through collaboration. It is adapted from an interview with Moz Siddiqui, manager of global operational partnerships and health innovation at Gavi, as research for Private-Sector Collaboration for Sustainable Development, a new report from BSR and The Rockefeller Foundation.

BSR: What is Gavi, and why was it established?

Moz Siddiqui: Gavi, the Vaccine Alliance, is an alliance of UNICEF, the WHO, the World Bank, donors, recipient countries, civil society, the pharmaceutical industry, and other private-sector companies. It was established in 2000 to address declining coverage rates of vaccines and the huge disparity in access to vaccines for preventable diseases in the world’s poorest countries.

In 1998, the WHO, the WEF, UNICEF, health ministers, and the pharmaceutical industry convened to understand why children were still dying from basic preventable diseases. They realized that the key issue was affordability. At the time, sovereign donors supported states directly, and there was no coordination around vaccines. It became clear that solving the issue of vaccine affordability and access would require collaboration between the private and public sectors. In 1999, challenged by Bill and Melinda Gates, key UN agencies, leaders of the vaccine industry, representatives of bilateral aid agencies, and major foundations agreed to work together through a new partnership: Gavi was seeded.

BSR: How does Gavi work, and what have been your key achievements?

Siddiqui: Gavi believes that through vaccinations, one can build healthy societies and economies. Our model is to address the disparity in access to vaccines by aggregating and pooling the collective demand for vaccines in almost 70 countries. Gavi purchases vaccines and thus provides long-term, predictable demand for them. It ensures the appropriate supply of quality vaccines by minimizing their cost and ensuring that the highest quality requirements are met.

To date, thanks to its purchasing power, Gavi has been able to reduce the price for 10 essential vaccines (such as Hepatitis B and Measles) from US$950 to US$35. We’ve enabled vaccinations for 680 million children worldwide, and we’ve reached US$80 to US$100 million in economic savings through Gavi’s purchasing power, resulting in a knock-on effect of US$350 billion of economic savings.

BSR: How has Gavi evolved along the way?

Siddiqui: Over the years, Gavi has been able to scale and grow. But more essentially, Gavi has become a market creator and a market shaper. It is one thing to ensure an appropriate supply of vaccines in a country, but it is another to make sure that appropriate institutions and systems are in place to allow for products to be redistributed and reach the point of care. Gavi does that.

The Alliance has evolved into a collaboration that goes beyond ensuring the supply of affordable vaccines in developing countries to one that strengthens healthcare systems. This was enabled by understanding the role that the healthcare system plays in health. Very early on, Gavi realized that it was not enough to ensure access to products and “hand them over the fence,” but that there were systemic challenges for healthcare systems in low-income countries.

BSR: What are Gavi’s key success factors?

Siddiqui: First, it’s about governance and collective decision-making: Multistakeholder collaboration is in Gavi’s DNA, with very different actors coming together and engaging in collective decision-making. Second, it’s about acknowledging each organization’s core competencies: Gavi is a curious mix of public-sector, civil society, private-sector, and sovereign donors. The fact that the alliance has existed since 2000 is a testament to how well they acknowledge and leverage each other’s core strengths.

Third, it’s about creating shared value: Gavi is really good at aligning the incentives of different actors and providing market-based solutions. Recipient countries are the primary drivers of the collaboration. They pay a share of the cost of their Gavi-supported vaccines, and as a country’s income grows, its co-financing payments gradually increase to cover the full cost of its vaccines.

Predictable, long-term donor support is another cornerstone of our model. It provides the security for countries to adopt vaccine programs. It also makes it possible for manufacturers to make new investments in production capacity. As we purchase for 60 percent of the world’s birth cohort, Gavi has shaped the vaccine market for wider societal gain, too.

BSR: What would be the ultimate success for Gavi?

Siddiqui: Our vision is to immunize one billion children by 2020, saving millions of lives from preventable deaths. In order to do this, we need to build resilient heath systems and markets. So that we can continue focusing our efforts on the very poorest countries, it is our goal to transition 20 countries that have passed the benchmark of US$1,580 GNI per capita out of Gavi’s support and have them fully fund their vaccine purchases themselves by 2020.

To ensure vaccines are distributed to areas where they are needed the most, health systems strengthening is required. Therefore, as an Alliance, we need create resilient health systems by addressing not only pricing, but also public health infrastructure, and we must continue to empower partner countries to accelerate their work.

Case Studies | Tuesday February 27, 2018

The Maritime Anti-Corruption Network: Argentina Collective Action

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The Maritime Anti-Corruption Network (MACN) is a global business network working toward the vision of a maritime industry free of corruption that enables fair trade to the benefit of society at large. The network promotes good corporate practices through the MACN Anti-Corruption Principles and collaboration with key stakeholders, including governments and international organizations, to identify and mitigate the root causes of corruption.

As one of its efforts, MACN pursued a collective action in Argentina, which resulted last year in the successful adoption of a new regulatory framework for dry bulk shipping that reduces corruption risks for the industry and elevates the country’s culture of integrity.

The Challenge

In 2014, MACN recognized through its anonymous incident reporting mechanism frequent recurring reports of financial demands made during the vessel clearance process in Argentina.

Every cargo ship entering Argentine waters must pass certain inspections, including those carried out by the Servicio Nacional de Sanidad y Calidad Agroalimentaria (SENASA), the government agency that guarantees the quality and healthiness of Argentine agricultural products. SENASA performs an important regulatory function. However, several problematic incentives converged to undermine the integrity of the system:

1. Inspections were at the discretion of the inspectors and not objective, as the criteria for rejecting a hold were unspecified and unclear.
2. Failing an inspection was costly, since it meant ships were considered off-hire. Depending on market conditions, port costs and commercial delays accrued from each extra day in port could amount to more than US$50,000 per day.
3. Inspections were recorded with paper records, which made data aggregation difficult or impossible.
4. The system lacked a reliable appeal or reporting mechanism to allow companies to seek redress for alleged non-compliance.

Together, these conditions facilitated bribery (where ships in bad condition would pay to obtain clearance) and commercial extortion (where officials would not provide clearance to ships in good condition without a facilitation payment). 

Our Strategy

To address this challenge, MACN sought to understand the root causes and devise solutions with a coalition of champions. MACN and local partner Governance Latam, in collaboration with other industry stakeholders, catalyzed a collective action program to investigate the root causes of the problem and support SENASA in reforming its procedures to tackle systemic corruption.

MACN and Governance Latam first interviewed more than 40 ship owners (MACN members), port agents, private surveyors, public inspectors, maritime lawyers, maritime insurance officials, representatives of grain houses, and public officials from the maritime sector. These interviews established that a mid-level public-private network of individuals was responding to a corruption-drive incentive structure. As a result of this dialogue, MACN defined the objective of the project as the modernization of the inspections system to be less discretionary, more transparent, and more accountable.

MACN and Governance Latam developed a broad coalition to develop and agree on the key points for a new system that would be both integrity-oriented and feasible, balancing the commercial interests of multiple stakeholders in the context of a process that remains critical to Argentina’s foreign trade.

In parallel, we also prepared for the implementation phase, seeking funding to support training and the development of communication materials to inform stakeholders of the new practices.

Our Outcomes and Impact

Following a series of public consultations on the new regulation, MACN’s collective action resulted in a new regulatory framework in Argentina that reduces discretion in the inspection of holds and tanks, establishes a system of cross-checks to increase integrity, provides an escalation process when disputes occur, and creates an e-governance system to underpin the framework. Inspections will be conducted by registered private surveyors, and, in case of conflict, bulk carriers will be able to request supervision of these inspectors from SENASA.

Moving to a system of inspections primarily conducted by private surveyors has great potential to reduce solicitation and extortion, as incidents may be resolved in an expedited fashion. Facing an improper demand from a private surveyor, a vessel’s master or its local agent can simply call the surveyor’s office, report the incident, and request intervention by SENASA, making the private inspector and its employer subject to sanctions and even disbarment.

MACN believes that these changes will increase the efficiency, integrity, and transparency of inspections, reducing the possibility of ship delays for unclear or unfounded reasons and facilitating the smooth passage of vessels to the benefit of frontline crew, global trade, and the Argentine economy.

Since implementation of the new system, MACN has provided information to industry, inspectors, and other stakeholders explaining the changes, including hotline contact details. Thanks to funding from the A/S D/S Orient's Fond, Governance Latam has also provided training to more than 400 local industry, private-sector, and public-sector stakeholders, and the course has become official government training material for SENASA staff.

Lessons Learned

To effectively address corruption from country to country, we have learned that it is critical to recognize different interests and drive ownership for sustainable change. The following lessons in particular stand out:

• Understand how corruption works in specific instances by answering questions like these:
  • Who is actually getting the illegal payments, and for doing what?
  • What are the economic drivers of the corruption scheme?
  • How do incentives work for each stakeholder?
  • Why has the corrupt scheme endured?
• Understand the good-faith commercial interests of each group of stakeholders, as well as the operational and practical limitations to regulatory change.
  • Commercial incentives and operational practices may be as or even more important than legal risks in determining the stakeholders’ behaviors.
  • The pursued reform should therefore be business-driven as well as integrity-driven: It should make sense in the context of business, either by making it easier or less costly for the stakeholders involved to do business.

Further, once the above facts are established, a successful anti-corruption initiative requires a coalition of the willing and local ownership from government, civil society, and local business networks. Companies are just one part of a larger system, and the entire system needs to be engaged in the process for change—raising the bar on efficiency, integrity, and good governance.

Finally, while local ownership is critical for implementation, support from international headquarters is essential to ensure that all business partners are aligned on expected integrity practices, from the maritime companies, port agents, and inspectors to the cargo owners whose products are being shipped around the world.

MACN’s work in Argentina is a model example of how stakeholders can work together to successfully combat corruption for the benefit of society at large.

Blog | Wednesday February 21, 2018

Collaboration for Impact: A Conversation

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This blog is the first in a series of interviews on how the private sector contributes to sustainable development through collaboration. It is adapted from a roundtable conversation conducted as research for Private-Sector Collaboration for Sustainable Development, a new report from BSR and The Rockefeller Foundation. 

Dominic Kotas: What is important for you when you consider joining a sustainability collaboration?

Chiel Seinen: For me, it is important that there is clarity. I can only sell it to the top of the house if there is a clear purpose, objective, and timeframe. I need to know when it would be a success, and I need a mandate; otherwise, failure is guaranteed, if you ask me. A clear vision, mission, timeframe, and objectives are 99 percent of the battle.

Moira Oliver: I think you also need to have some clear deliverables in the short, medium, and long term, otherwise people will just see it as a nice idea but with no real practical impact. Is it worth their time and investment if it is not going to deliver some actual impact for their business?

Seinen: I agree. You can of course have an open-ended working group, so to speak, but then at least you need to know what will be delivered, and whether there is a moment to evaluate and potentially exit or disband the collaboration.

Kotas: And what makes collaboration work over time?

Eric Anderson: When I look at potential collaborations, I like to think: Are we covering the ‘why,’ the ‘what,’ and the ‘how’ of this issue? It feels like the ‘why’ is covered if you have a clear purpose, as you mentioned. When it comes to the ‘how,’ as Moira said earlier, the governance is probably the most critical part in ensuring that we can work together.

In terms of the timeframe, I think that the ‘why’ gets you to the starting blocks, and the ‘what’ might get you into the first year. But actually delivering successful outcomes is all down to the ‘how.’

Yukako Kinoshita: The governance is important, I totally agree with what you have said, because I think there is also the issue of competition to resolve. At the end of the day, you will be working with your competitors, and good governance is what resolves that tension; it makes us feel safe working together.

Oliver: In addition, if you do not have a stakeholder in there who everyone regards as key, that can have a real dampening effect. So it depends a little on who you have within that group of early adopters.

Kotas: How does that evolve? Do you want to see a collaboration grow the number of members?

Kinoshita: I think there is a risk that as you gain more members, you lose the action and impact, and the collaboration becomes more of an information exchange platform. When you have a very small group, you have a specific purpose and you can make an impact.

Anderson: Yes, completely. As I mentioned earlier, if you have an emerging issue that you want to lead on and really drive, my belief is that you can have more impact by convening a smaller group that moves independently to a certain point. Then, when you are ready to scale, you will have a strong business case to share.

Oliver: For me there is also growth in terms of the agenda and maturity. Even if an initiative has been running for a long time, what I really want to see is that it adapts and moves on to another level; that it does not just stay static in terms of its agenda.

Kotas: And what are your views on the future of private-sector collaboration?

Kinoshita: I am quite positive because of the SDGs—everybody is talking about them, and you feel like you can collaborate.

Anderson: I think there will be more collaboration in the future, but I think it might be more bespoke, issue-focused collaboration.

Seinen: My vision is that collaboration will be fully integrated into the way we run projects and the way we run business. And I think that while we will collaborate across geographies, not everything needs to be solved at a global level.

Anderson: I agree. We’ll need global perspectives, but the action will be increasingly tailored to local contexts.

To learn more about this topic and the upcoming report, please register for our Sustainability Matters webinar on February 28.

Blog | Tuesday February 20, 2018

Assessing Suppliers: Inclusive Business or Business as Usual?

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Many companies are beginning to evaluate their suppliers based on their social and environmental impacts, both positive and negative. Particularly when assessing suppliers’ claims to have a social impact through employment, it can be difficult to determine whether a supplier is an inclusive business, or just doing business as usual.

In January, the Global Impact Sourcing Coalition (GISC) visited one of our members’ operations in Kingston, Jamaica to learn from its approach to inclusive employment. Sutherland is a process transformation company whose services include contact center management. Like other members of the GISC, Sutherland has grown its operations through intentionally hiring and providing career development opportunities to people who otherwise have limited prospects for formal employment, thus reducing social inequality and contributing to the Sustainable Development Goals to provide employment and decent work for all.
 

Graduates from Sutherland Global Services’ Community Technology Centre in Kingston, Jamaica. Photo credit: Sutherland Global Services.

Our tour of Sutherland’s investments in inclusive employment in Jamaica demonstrated how inclusive suppliers are distinguished by three traits.

1. Intentionality: Inclusive businesses do more than just hire people from disadvantaged backgrounds. They do it with intent, assessing what barriers vulnerable populations have in securing employment and deliberately removing those barriers through their application and onboarding processes. They assess how they might best source new workers from their communities and set goals to improve their diversity and inclusion.
   
   For example, Sutherland supports a network of Community Technology Centers (CTC) in Jamaica to train young adults in at-risk communities in the hard and soft skills they need to secure their first job in a modern workplace. When the company evaluated how to improve the impacts of the program, it decided to make a commitment to ensure that at least 10 percent of CTC graduates find employment. As a result of this pledge, participation in the program spiked, and the company now benefits from a new pipeline of qualified, enthusiastic employees who would not otherwise have had the academic credentials for employment there. Sutherland Jamaica has also set internal goals to increase the number of youth it trains and sources from the CTC program.
    
2. Social impact focus: An inclusive business seeks to understand, measure, and continuously grow the social impact that it is having in its workplace and communities. It goes further than traditional workforce engagement to understand and provide for the needs of its employees and ensure that they are equipped with the training, resources, and life skills that they need to succeed and grow. It aims for continuous improvement to ensure a positive impact on employees, communities, and the business.
   
   When Sutherland launched the 'Earn While You Learn’ program for university students to work part-time to pay their way through college, its focus was not only on producing a qualified workforce, but also on increasing graduation rates at local universities, which had seen graduation rates plummet as students struggled to afford recently introduced tuition fees. The company partnered with the university to set up contact centers on campus grounds, created flexible part-time work schedules that enabled students to attend classes on a full-time basis, and assessed academic achievement in employee performance reviews to determine if they need more time off to attend to their studies. More than 400 people have found employment with Sutherland on campus, many of them unlikely to have been able to afford higher education otherwise.
    
3. Partnerships and collaboration: Finally, an inclusive business does not attempt to do it all on its own. It works in close partnership with other experts to identify areas of need, provide expertise, develop targeted services and interventions, and ensure that impacts are shared with the wider community.         

For example, Sutherland’s CTC program runs on partnerships with clients, governments, universities, youth training programs, churches, community centers, and civil society organizations to reach and train at-risk youth. On our trip, we heard stories from youth of the many actors in their communities—the pastors, community leaders, teachers, friends, and family members—who reached out to them to encourage them to participate in the program, and who share an equal role in their success. 

Of all of the company’s investments in inclusive employment, Country Head and Associate Vice President for Sutherland Jamaica, Odetta Rockhead-Kerr emphasizes, “Our clients are some of the most important partners. If they didn’t give us the business, they wouldn’t be able to impact lives. It’s their opportunity to be socially responsible.”

By participating in the GISC, client companies are able to identify and partner with suppliers that have made real commitments to inclusive employment, contributing to the sustainability and social development of the communities they source from. Visit http://gisc.bsr.org to learn more about how your company can start an Impact Sourcing program.

Blog | Thursday February 15, 2018

Why We Need a Loud (and Consistent) Business Voice on Policy Issues

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In our recent report, Redefining Sustainable Business: Management for a Rapidly Changing World, we outlined new directions for companies as they manage sustainability through their business strategies, with ever greater impact.

Our “Act, Enable, Influence” framework represents a comprehensive approach from business, in which it is not merely an actor implementing rules and regulations, but instead an active participant in shaping its operating environment. 

As my colleague Alison Taylor put it when we released the report, “Companies should influence the policy and legal environment via vocal support for sustainable business. Silence on key policy issues is no longer an acceptable stance: The public—and your employees—wants to see more concrete evidence of business values and want business to take a more active role in shaping policy for the long term.”

The World Economic Forum in Davos last month provided one opportunity for business to engage with government leaders. Interestingly, conversations there about how to achieve the Sustainable Development Goals (SDGs) focused heavily on all-important Goal 17, which calls for partnerships across all sectors of society. 

In discussions on how to realize the vision of the Paris Agreement, companies called for policy frameworks that create the right kind of incentives. With more than 70 heads of state and heads of government present at Davos, it was sometimes hard to tell who was who: The CEOs just as often called for policy solutions to pressing global challenges as the political figures did.

Why is this crucial, and why now?

The world is changing ever more rapidly around us, and business—the source of many of the innovations that are generating many of these changes—has expertise on a number of key topics that tomorrow’s policy frameworks will need to address. Because global companies have an essential appreciation of the international business implications of things like free trade agreements, privacy and data protection laws, and materials disclosure requirements, it is crucial that their expertise and perspective inform smart regulatory frameworks. Businesses are well placed to speak, for example, to the listing rules that promote short-term decisions at the expense of investments in employees and climate-resilient infrastructure. They are also essential to involve in conversations about the human rights implications of new technologies.

In an era when leadership is badly needed and trust is in short supply, business leaders should work to ensure that the incentives created by governments align with high levels of ethical, environmental, economic, and social ambition. It is clear that the lowest-common-denominator approaches that have been the default position of traditional business associations in the past are no longer fit for purpose: Business must be part of the solution to our shared challenges.

Moreover, in a hyper-transparent world, discrepancies between the arguments companies make in hushed tones in the offices of their representatives and the aspirations they express in the colorful pages of their sustainability reports are not, to put it lightly, sustainable.

There is also an important incentive for business to promote effective and consistent frameworks. In recent years, we have seen a welter of frameworks develop on reporting and transparency, supply chain due diligence, and other topics. Companies operating globally do not benefit from an inconsistent set of rules and regulations; such a system incentivizes compliance, rather than creativity. It is therefore valuable for companies to support consistent policy frameworks across jurisdictions. Otherwise, the core objectives of advocacy—business certainty and predictability—are unlikely to be realized.

There is often a high degree of skepticism about where corporate interests lie, so this model only works if there is both transparency in how business engages and alignment in the public and private interests companies address. 

This is a point to be heeded. But it should be reason to participate in public policy the right way, not a reason to stay away from it altogether. Just as in past years it became untenable for companies to ignore labor conditions in their supply chains or the impacts of their products and services on the environment, we are at a time when any company aspiring to sustainability leadership will be judged not only on its performance, but also on how it shapes the rules of the game.

Ultimately, businesses press for policy changes on all sorts of issues: Why should sustainability be any different?  

Reports | Wednesday February 14, 2018

New Models for Sustainable Procurement

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While the first two decades of the sustainable procurement field focused on codes of conduct, supplier compliance, and auditing, procurement professionals in the vanguard today are looking to do much more with their sustainable procurement efforts, as major forces of change—such as climate change and automation—are poised to impact supply chains in uncertain and possibly unprecedented ways.

This paper captures three key developments that BSR's Procurement Leadership Group tracked, explored, and discussed in 2017: supply chain transparency, supplier engagement, and responses to shifts in trade and globalization.

Blog | Monday February 12, 2018

Event Summary: Ethics, Human Rights, and Artificial Intelligence

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