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Blog | Thursday January 18, 2018

The Right to Privacy, 70 Years On

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This is the first in a series of blog posts where we and a BSR member company review how business respects individual articles in the Universal Declaration of Human Rights (UDHR), 70 years after its adoption in 1948. This series has the support of the Office of the High Commissioner on Human Rights (OHCHR), but any views expressed here should not be attributed to OHCHR. This particular post, co-authored with Telenor, explores what the right to privacy means for business.

Article 12 of the Universal Declaration of Human Rights: “No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honor and reputation. Everyone has the right to the protection of the law against such interference or attacks.”

When the Universal Declaration of Human Rights (UDHR) was adopted in 1948, there were around 10 million telephone lines in the world. At the time of writing this blog, there are more than 8.3 billion mobile connections (including “machine to machine” connections) and almost 5.1 billion unique mobile users. The emerging Internet of Things is expected to connect around 30 billion objects by 2020, while research group IDC estimates that the world creates 16 zettabytes (that’s 16 trillion gigabytes) of data a year today, and will increase ten-fold by 2025.

By any measure, the nature, scale, and complexity of the challenges companies face to respect the human right to privacy is growing substantially. They are also impacting all industries—there is not a single company in the world today untouched by the privacy challenge.

We believe there are five key elements to a business response to this challenge: distinguishing between different elements of the privacy agenda; appreciating the link between privacy and other human rights; understanding the severity of impact; adopting a privacy by design approach; and collaborating with a range of stakeholders.

First, it is important to distinguish between three related but different parts of the privacy agenda.

• Data security means having the right protections in place to protect against increasingly frequent, sophisticated, and malicious cyber-attacks, as well as guard against data breaches. This is primarily about defense.
• Consumer privacy relates to the desire to create value with the personal data shared with companies by users (such as tailored products and services), while being open and transparent about how personal data is collected and used, and providing user choice. This is primarily about policy choice, and increasingly about legal compliance as governments introduce new privacy regulations.
• Law enforcement relationships are primarily about company-to-government interactions. The interface between the business responsibility to respect human rights and the government duty to protect human rights informs how companies respond to government demands for personal data. While usually made to ensure the protection of human rights by governments, these demands in certain contexts can threaten the privacy rights of users or be made in a manner inconsistent with internationally recognized laws and standards.

Second, it is important to appreciate the link between privacy and other human rights—privacy is a gateway right in that it enables the realization of other rights. For example, if a human rights defender working in a high-risk country is a victim of hacking or has personal data wrongly shared with law enforcement agencies, then in turn this human rights defender faces far greater risks to life, liberty, and security of person (Article 3), the right to freedom of opinion and expression (Article 19), and the right to right to freedom of peaceful assembly and association (Article 20), among others.

Third, while privacy rights are held by everyone, some privacy violations have a more severe impact on human rights than others. For example, the privacy violation of the human rights defender in a high-risk country could have a far greater impact on human rights than, for example, a consumer receiving targeted adverts without their consent. Similarly, vulnerable populations, such as refugees, migrant labor, and children, could face far more severe consequences. While all privacy rights should be respected, a company’s human rights strategy should, in accordance with the UN Guiding Principles on Business and Human Rights, prioritize the most severe cases, and pay special attention to vulnerable populations.

Fourth, privacy by design should form an essential part of every company’s strategy to respect the human right to privacy. With privacy impacts arising through the use phase of products and services, it is essential that legal and privacy teams, research and design teams, and sales and marketing teams collaborate to fully integrate privacy during the design phase.

Fifth, multicompany and multistakeholder collaboration can substantially increase company leverage to protect the right to privacy. For example, in the information and communications technology (ICT) sector, the Global Network Initiative (GNI) brings together companies, investors, civil society organizations, and academics in a united effort to protect privacy when confronted with government demands, laws, or regulations that compromise privacy. Through shared principles, policy dialogue, and advocacy, the GNI has become an essential part of the private sector’s effort to respect the right to privacy in the ICT sector.

The nature, scale, and complexity of privacy risks have expanded greatly since 1948, and private-sector strategies for implementing respect for the human right to privacy has evolved during this time. We would like to leave readers with two key messages: first, that upheaval in a wide range of disruptive technologies—such as artificial intelligence, big data analytics, and the Internet of Things—is only going to accelerate, which means it is essential that companies adapt our business and human rights strategies to cope with this change; and second, that companies from all industries would be well served by both learning from the experience of the ICT sector so far, and by engaging proactively in a shared exploration of what is coming next.

You can read more about Telenor’s approach to privacy in its Sustainability Report and its Authority Requests Disclosure Report. Telenor’s approach is notable for the manner in which it covers both developed markets (such as Norway, Denmark, and Sweden) and emerging markets (such as Myanmar, Pakistan, and Bangladesh), as well as both the company’s own actions (such as privacy and security by design) and collaboration with other companies and stakeholders (such as the GNI).

Blog | Thursday January 11, 2018

Seven Things Every Company Should Know about Artificial Intelligence and Sustainable Business

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This is the first in a series of blog posts BSR will publish in 2018 exploring the intersection of disruptive technologies and sustainability.

Artificial intelligence (AI) is advancing rapidly, thanks to ever-more-powerful computing, massive growth in the availability of digital data, and increasingly sophisticated algorithms. The world’s largest technology firms are investing billions to develop their AI capabilities, and companies across industries, from travel to real estate to fashion, are racing to bring AI-enabled services to market.

AI has the potential to bring significant social benefits, including healthcare (via improved diagnostics), transportation (through self-driving vehicles), and law enforcement (with improved fraud detection). AI also brings new social risks, including to non-discrimination (from algorithmic bias), privacy (through the misuse of personal information), child rights (through lack of informed consent), and labor rights (because of the mass displacement of workers by machines).

While by no means exhaustive, we believe the following seven considerations are essential for our members to factor into their AI strategies.

1. AI is relevant for all industries, not just technology companies. The development of AI today is being driven by Silicon Valley, and it is understandable that private-sector participation in the dialogue about the social implications of AI has been dominated by technology companies. However, it is an urgent priority for companies in other sectors using AI—such as financial services, healthcare, infrastructure, public services, and retail—to understand how AI impacts their business models, employees, and customers.
2. The human rights and ethics impacts of AI are especially important. The UN Guiding Principles on Business and Human Rights were created to guide the integration of human rights into business decision-making, and should be deliberately applied to the development and deployment of AI. This means asking and addressing questions like “What are the most severe potential impacts?”, “Who are the most vulnerable groups?”, and “How can we ensure access to remedy?” Companies should take a human rights by design approach to AI.
3. Environmental issues are important, too. While significant attention has been paid to the ethical and human rights implications of AI, we have a tremendous opportunity to embed environmental learning into AI—as Google has done to radically improve the power use effectiveness of its data centers. AI can also be used as an environmental solution—as Microsoft’s AI for Earth commitment demonstrates. At the same time, it will be important that the data processing needs created by AI don’t substantially increase energy use.
4. Research, product development, and marketing teams are essential to engage on sustainability. In our 2017 annual survey of sustainable business leaders, we asked which functions were most important to achieve substantive progress on sustainability—and only 24 percent mentioned product development, 13 percent mentioned research and development, and 8 percent mentioned marketing. These functions will have a significant influence on the development and deployment of AI, so it is crucial that they participate actively in the conversation around AI and sustainability.
5. Companies will need to communicate the complexity of AI in accessible ways. AI is extremely complex, and only a very small number of people in the world—mostly concentrated inside companies—understand how it works. If AI is to fulfil its potential while mitigating accompanying risks, civil society, rights-holders, and vulnerable populations should have access to information about the issues at stake and channels to participate meaningfully in discussions about its application.
6. Ethics and principles for AI are being developed rapidly, but implementing them in practice will be challenging. It is noteworthy how rapidly the AI field has developed principles, with organizations such as the Institute of Electrical and Electronics Engineers, the Software and Information Industry Association, the Information Technology Industry Council, and the Future of Life Institute all publishing statements of ethics. Initiatives like Partnership on AI, the Ethics and Governance of AI Fund, and AI Now are embarking on substantial efforts to explore key dilemmas and facilitate dialogue on them. However, turning theory into practice will require thorough review of real-life cases.
7. The future of AI is uncertain, but decisions today can have long-term consequences. Taking responsible approaches to AI will require grappling with rapid change, uncertainty, and complexity. We can’t know exactly what path the development and deployment of AI will take, so we should be prepared for different versions of the future and think through the possible long-term implications of today’s decisions. Futures thinking, also known as strategic foresight, can provide structured ways to explore multiple possible futures and chart a path forward that considers the various possible outcomes that might unfurl.

In our recent report on the Future of Sustainable Business, we listed the intersection of technology, ethics, and human rights as one of the three big issue sets that we believe need to be front and center on the business agenda—not only for sustainability reasons, but because these questions will be increasingly central to business performance and strategy. We have much to lose if AI does not evolve in ways that support the public good, and we look forward to working with you to help ensure that it does.

Blog | Tuesday January 9, 2018

Pandemics: They’re Everyone’s Business

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The cover of the May 16, 2017, issue of TIME magazine featured a picture of one the scariest threats to the world. It was neither a picture of a mushroom cloud of an atomic bomb, nor the face of an infamously ruthless dictator. Rather, it was a picture of something rather invisible to the unaided human eye—the Ebola virus. The article, “The World Is Not Ready for the Next Pandemic,” (re)sounded the alarm for the scientific and international communities to take the increasing threat of pandemics more seriously and to incite action and collaboration among global health experts.

While the article points to the actions of government and civic society players, it fails to highlight the efforts of the private sector in preparing for and combatting emerging biothreats. Recently, the BSR Healthcare Working Group engaged several of its members, which represent many of the world’s leading biopharmaceutical companies, to elucidate their evolving and expanding role in pandemic preparedness. Global health security is everyone’s business, and examples from these companies demonstrate that collaborating and partnering is the only way forward.

Pandemics have the potential to bring national economies and international trade to a standstill. The World Bank estimates that the economies of Guinea, Liberia, and Sierra Leone lost US$2.2 billion in forgone economic growth in 2015 due to the Ebola crisis. According to the TIME article, the 2003 SARS epidemic, which killed fewer than 800 people, cost the global economy US$54 billion, much of it in lost trade, transportation disruption, and healthcare costs. The World Bank estimates that the toll from a severe flu pandemic could hit US$4 trillion.

When pandemics occur, local communities and national governments are not the only ones that are thrown into chaos and prompted to act quickly—vaccine producers shoulder the burden, too. For biopharmaceutical companies, vaccines have been traditionally developed and distributed under commercial frameworks that ensure profitability and economic sustainability. For diseases such as Ebola, Zika, and SARS, no real commercial market exists, yet it is expected that pharmaceutical companies will develop and produce solutions in record time, which comes with technical and regulatory challenges, vaccine development expenses, and opportunity cost from pausing other core vaccine programs.

Dr. Jean Lang, associate vice president of global R&D for Sanofi Pasteur, summarizes the challenge well: The system is not fit for purpose and needs to be rethought. As he explains, “It starts with changing the current mindset where the private sector is expected to develop vaccines at risk, without any visibility on a possible return on investment, which is utopian; we need to reach a point where private companies, governments, and health authorities become public health partners upstream to share the risks and benefits.” It’s about inventing a diversity of responses, he says, and “collectively deciding to step away from risk avoidance and move faster.”

GSK is tackling these challenges head on. When GSK got internal approval to move forward with Ebola vaccine development, they put hundreds of people on the project to condense a process that usually takes several years into a matter of months. In late 2016, GSK also opened a global R&D vaccines facility that has the capability to do full, end-to-end development and manufacturing, which is rare in the industry. Moreover, it is partnering with the U.S. government, PATH, and others to prepare for the next pandemic. According to Dr. Rip Ballou, vice president and head of GSK’s global vaccines R&D center in Rockville, Maryland, “GSK is working on a number of technology platforms that may speed up the process of vaccine discovery and manufacture, which could prove valuable during a health emergency. We are also in agreement that this requires collaboration between the public and private sectors, and we’re ready to play our part.”

Johnson & Johnson (J&J) understands this well. Dr. Alan Tennenberg, chief medical officer of global public health at J&J, works with government stakeholders and private-sector players to coordinate efforts around biopreparedness. Alongside the GE Foundation, J&J founded the Private Sector Roundtable for Global Health Security Agenda, which convenes 17 business players to work with governments and security networks to prepare for pandemics, epidemics, bioterrorism, and biosecurity. Furthermore, J&J co-leads the Global Pandemic Supply Chain Network, a public-private partnership that seeks to create a ready supply and network for response, prevention, and control. Private-sector players leverage their expertise in supply chain and logistics to enhance emergency response and avoid critical delays, waste of resources, and losses of lives. As Tennenberg elaborates, “Partnerships are essential. Success is not only private-private, but also private-public. It’s about openness, trust, and transparency.”

Another prime example of this type of collaboration is the Coalition for Epidemic Preparedness Innovations (CEPI), which raises funds and coordinates activities for vaccine development. The four companies we interviewed are all involved with CEPI, helping the coalition and its partners address the commercial challenge that biopreparedness presents and the increased legal liability of speedily testing vaccines on the market each time a biothreat emerges. Dr. Paula Annuziato, vice president and therapeutic area head of vaccines clinical research at Merck & Co., wants to change the perception that biopharmaceutical companies are investing in this area from profit-making motivation. According to Annuziato, “Misperceptions of industry’s intent and motivation can impede collaboration. It is more productive and effective to identify each coalition partner’s core capabilities and expertise and leverage them for the benefit of patients and health systems.”

The world may not yet be prepared for the next pandemic, but there is a growing coalition of private, public, and civil society partners working to change that and ensure that our increasingly interconnected global economy is safe and resilient. And while pharmaceutical companies have unique technical expertise to contribute to pandemic preparedness, every industry, from tech to energy, has a stake in contributing to strong and resilient health systems. Opportunities for partnership abound. We are all in it together.

Blog | Monday January 8, 2018

Surveying the Human Rights Landscape: How Businesses Are Managing Human Rights in 2018

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This is the final post from a three-part series featuring our human rights experts’ reflections on the evolving business and human rights landscape in 2017, as well as their perspectives on emerging issues we anticipate in 2018.

Aude Ucla, Associate, Human Rights (Paris)

While it's widely acknowledged that the quality of a product is essential for business performance, thinking about the human rights impacts of a product is still pretty cutting edge. Surprisingly, though, I saw a lot of innovative thinking on product design and human rights throughout my work with companies in 2017.

The ICT sector has been the most scrutinized, as their products can be (mis)used by government customers to violate privacy, crackdown on dissidents, and curb freedom of expression. But this year I saw a number of other sectors consider the human rights impacts of their products. These companies not only took measures to prevent product misuse and abuse, but also worked to raise customers’ awareness about human rights more generally. I expect that we will see companies continue using their voices to protect and advance human rights this year.

Jaewon Kim, Manager, Human Rights (Hong Kong)

Risk management is central to multinational companies. Every one of our member companies has dozens, sometimes hundreds, of staff members projecting how the world will change and testing scenarios for how their business can adapt. One of the most encouraging trends I saw last year was a shift in this risk management approach from the traditional method—the risk that human rights concerns pose to the company—to a more holistic understanding of how companies operate in societies—the risk that the business itself poses to rights-holders.

This may sound like a technical distinction, but it is fundamental to private sector sustainability. A company that takes the traditional approach will prioritize only the human rights issues that directly damage its bottom line or reputation—attention-grabbing violations like child labor or human trafficking. A company that takes the holistic approach, however, will consider a much broader range of issues, and will focus on the areas where its potential impacts are the greatest.

Roberta Pinamonti, Manager, Human Rights (Paris)

In 2017, I noticed an important shift in how companies are integrating human rights into management systems: Companies used to focus on one rights issue or one part of their business. Now, they are taking a more comprehensive approach. 

In the supply chain for instance, many companies used to focus their human rights efforts on the first tier, where impacts and violations are easiest to find. Now, I’m seeing companies shift their approach to focus on where the greatest impacts lie, throughout their supply chains. This increase in ambition level was apparent in a number of companies I worked with throughout the year.

Similarly, in the area of human rights impact assessments, I observed a distinct shift from focusing on a single operation or country to a full assessment across functions and responsibilities—everything from investment decisions to product marketing. This makes me hopeful that the next wave will focus on building inclusive governance on human rights issues throughout a company across functions and processes, incorporating human rights into day-to-day business.

Rosa Kusbiantoro, Manager, Human Rights (Hong Kong)

One of the encouraging signs I noticed last year was that companies are expanding human rights beyond their CSR departments. It might sound obvious to those of us who consider these issues every day, but it is a relatively new phenomenon to see companies formally recognizing that human rights are relevant to every single one of their departments and functions. I'm reminded of the companies that established "diversity departments" in the 1990s, only to disband them in the 2000s when they realized that inclusion was a company-wide goal, not the job of a few people in their own office. I hope we see a similar evolution in human rights.

Chris Fletcher, Associate, Human Rights (San Francisco)

The biggest challenge I saw companies face last year is related to the issue of remedy. Many companies tend to conflate a grievance mechanism with the delivery of a remedy, when in reality the former is just a tool that should be used to understand what’s needed for the latter.

The challenging paradox that companies need to confront is to become comfortable with the uncomfortable and to recognize that we live in an imperfect world in which human rights infractions by companies are sometimes inevitable. The goal by companies should therefore be to minimize their human rights violations (hence the importance of listening to stakeholders’ voices in finding problems, especially before they become crises), but also to provide access to effective remedy when violations do occur.

In the future, I’d love to see companies carry out three sets of actions: focus on new and creative ways to give workers, communities, and customers channels to raise grievances; deliver effective remedies when needed; and then start gathering data and publicly reporting on trends. Working to address violations when they arise and then tracking, measuring, and reporting on performance will allow companies to work toward continuous improvement. The end result will be shared learnings that can be used to address this crucial area of human rights impacts. 

Blog | Wednesday January 3, 2018

Children’s Rights Online: A Conversation with UNICEF

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Children’s rights often feature prominently when BSR assesses the human rights impacts of information and communications technology (ICT) companies. Over the past two years, UNICEF has developed significant new thinking about the protection of children’s rights online, which is increasingly important in the digital age. Dunstan Allison-Hope spoke to Brian Keeley, editor of UNICEF’s State of the World’s Children report, the latest edition of which examines the perils and possibilities of digital technology and connectivity for children, about UNICEF’s work on this issue.

Dunstan Allison-Hope: Children are spending more time online, and doing more online, than ever before. How is UNICEF addressing this trend?

Brian Keeley: As internet and digital literacy become a necessity for full social and economic participation, UNICEF wants to see as many children as possible go online—while simultaneously staying safe. The fact that The State of the World’s Children 2017 (SOWC), UNICEF’s flagship report, is dedicated to these issues is a testament to the organization’s commitment to ensuring children harness the opportunities and avoid the risks of life online.  

UNICEF is working on this in numerous ways, including by addressing children’s online safety, both globally and nationally. UNICEF is part of the WePROTECT Global Alliance to End Child Sexual Exploitation Online, which involves leading technology companies, international organizations, and 77 member countries. In addition, many UNICEF country offices run online safety campaigns and provide material support to national child safety and law enforcement agencies to keep children safe online. Across a range of areas, UNICEF’s Office of Innovation works to harness the power of technology and other innovations to best serve the interests of children. 

Allison-Hope: What does UNICEF recommend that companies do to address this issue?

Keeley: Businesses are involved in children’s lives in ways they weren’t in previous generations. An obvious example is the role that digital technology and social media now play in how children make friends and maintain friendships.

UNICEF believes businesses have a role to play in several areas. There are clear concerns over how businesses process and use children’s data, and UNICEF wants to see much more transparency in this area. It also wants businesses to take a more ethical approach to developing apps and software that meet children’s real needs. And it believes the private sector has a crucial role to play in supporting law enforcement efforts to combat online child sexual abuse.

UNICEF is working with companies to integrate children’s rights into their policies and processes, for example through the implementation of the Guidelines for Industry on Child Online Protection and by expanding the debate on key issues like the role of business in protecting and promoting children’s online privacy, freedom of expression, and online access and digital literacy. In early 2018, UNICEF will release an Industry Toolkit on Children’s Online Privacy and Freedom of Expression, which will offer a set of general principles for business, as well as a checklist for companies to assess their relevant policies and products with respect to child rights.

Allison-Hope: Many companies take action to protect children from harm and abuse online, but as you highlight, much less attention is given to empowering children as rights-holders online. What is meant by empowering children as rights-holders online?

Keeley: For children to exercise their rights online, we need to ensure they have the competencies, skills, and overall digital literacy to keep themselves safe, play and socialize, use online resources, and participate in their communities.

But there is only so much we can expect from children. They need to be supported by a full range of stakeholders, including governments, teachers, and parents. Given the role they now play in children’s lives, for example through social media, businesses must also carry a large part of this responsibility. For example, it is reasonable for companies to help build children’s digital literacy through the provision of training and support for education. Children will only feel free to speak up online—a key aspect of exercising their rights—if businesses play a full role in creating a safe environment, including stepping up efforts to safeguard children’s privacy and data. 

Allison-Hope: Online advertising enables many internet services to be provided for free. What are the implications of the massive growth of digital advertising for child rights online? 

Keeley: It’s a little misleading to describe these services as free. Users may not be handing over cash, but they are “paying” with their time and attention, which advertisers value highly. The SOWC highlights the ethical responsibility of businesses not to design apps and software with the sole intention of grabbing users’ valuable attention. 

There are other clear concerns over the impact of digital advertising on children. These include the potential impact of certain advertisements targeted broadly at children on sites they use heavily, such as ads promoting fast foods or other unhealthy products. More specifically in the digital world, there are real concerns that businesses are using children’s browsing histories and other online data to directly target behavioral advertising at them—a very unwelcome process that risks “commercializing” childhood. UNICEF will shortly be releasing a paper on this topic as part of its discussion paper series on Children’s Rights and Business in a Digital World, which we encourage you to read if you’d like to learn more.

Blog | Tuesday January 2, 2018

The First 2018 ‘Year in Review’

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Here is the very first “year in review” you will read for 2018.

Yes, 2018.

This is not exactly a forecast, and it is also not exactly a wish list. This is a view of a year that will see the business community make even greater progress toward the promise of 2015’s twin achievements of the SDGs and the Paris Agreement. It is my hope that, when we look back at this year, we are celebrating these accomplishments and others as key milestones in our pursuit of a more just and sustainable world.

• Collaboration: 2018 was a year when collaboration took center stage. Each of the leaps forward taken in 2018 reflected or created new collaborative initiatives to take impact to scale. Indeed, the year saw the rise of a new entrant in the C-suite, the Chief Collaboration Officer, a position that appeared at the top of the list of emerging corporate positions for the 2020s. In addition, we began to see more companies from Asia, Latin America, and Africa play leading roles in global collaborations, as their engagement continues to rise to meet their increasing global influence and stake in the outcomes.


• Human Rights: In connection with the 70th anniversary of the Universal Declaration of Human Rights, businesses have continued to deepen their commitment to the UN Guiding Principles; have brought a human rights lens to the development, marketing, and application of new technologies; and have used their voices to reinforce the private sector’s interest in protecting human rights and civil society, reversing those trends of opposition to human rights principles that caused the previous High Commissioner of Human Rights, Zeid Ra’ad al-Hussein, to decline a second term.


• Climate: Business continued to demonstrate strong momentum in the shift to an economy powered by clean energy. At the Global Climate Action Summit in San Francisco in September and COP24 in Poland in December, the number of businesses committed to science-based targets and 100 percent renewable energy continued to skyrocket, well beyond the numbers expected in the immediate aftermath of the Paris Agreement. This served to strengthen the resolve of national governments to raise ambition as we head toward 2020. Innovations in energy storage appear poised to accelerate the uptake of renewables even further. Meanwhile, while unfortunately extreme weather events have continued apace, this has mobilized public opinion and created a new business coalition to advance climate resilience, including in the U.S., where cities and states have stepped in to fill the void left by the federal government.


• Women’s Empowerment: In the wake of the wave of sexual misconduct revelations in the U.S. in 2017, sexual harassment rapidly became an urgent issue for corporate boards, with a growing movement on the part of boards to expand the representation of women to 50 percent by 2020. There were signs of the #MeToo movement going global, with women’s marches (attended also by large numbers of men holding #NeverMe signs) held internationally and an increasing number of women speaking truth to men in power around the world.


• Inclusive Economy: With ongoing debate over automation and the future of work, companies, experts, and trade unions created a Global Commission on the 21st Century Social Contract to develop a consensus on tools that policymakers, businesses, and educators could undertake to ensure people’s access to employment. Businesses called for a new social compact fit for the 21st century, with lifelong learning, transition assistance, and access to social protections designed for today's demographics, workforces, and economies. Indeed, there began a movement to establish SDG18: a commitment to a just transition for workers displaced by new technologies.


• Supply Chain: We saw new thinking about supply chain sustainability this year, with companies leveraging blockchain technologies and worker voice tools on an unprecedented scale. Indeed, responsible regional sourcing hubs have emerged as a best practice, with social and environmental responsibility built in from the ground up. Moreover, major companies have taken visible steps to meaningfully incorporate climate resilience throughout their supply chains.


• Governance: More and more companies adopted the recommendations of the Task Force on Climate-Related Financial Disclosure and went beyond them to consider more deeply how their future prospects are tied to resilient business strategies, including the full suite of factors previously considered to be “non-financial.” Investors, following the lead of pension funds and sovereign wealth funds, have fully embraced the credo “Long Term Thinking Is Our Fiduciary Duty.”

2018 will be remembered as a year when the contours of a new global economy began to come into sharper focus. Businesses, working with their partners throughout their value chains, in civil society, and in government, demonstrated both commitment and action.

All in all, 2018 was could be a great year.

Blog | Tuesday December 19, 2017

2017: The Year the C-Suite Got Woke?

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The final big sustainability event of 2017 wrapped up just last week: The One Planet Summit convened by French President Emmanuel Macron just outside Paris. It delivered some important commitments designed to make good on the promise of Paris (more on that below), and it inspired me to reflect on all that has transpired over the past 12 months. 2017 overall is a year that will be remembered for two things: political turmoil and a new voice from business.

The West continues to be shaken by the election of Donald Trump and Europe’s own challenges of Brexit, security, and migration. Globally, the space for civil society is shrinking in the face of crackdowns by numerous governments in all parts of the world. In just the last quarter of the year, the United States has been rocked by deeply troubling revelations of widespread sexual harassment, leading—one hopes—to a cultural shift that will render such misconduct a thing of the past.

It is easy to focus on these challenges (which are indeed very large), but 2017 was also a year when business leaders helped to assert a steady hand, contributing leadership where it is badly needed.

In the United States, the voice of business has been heard far more often than is usually the case. CEOs and other business leaders spoke swiftly and overwhelmingly in favor of America’s staying in the Paris Agreement; in opposition to the immigration ban established by the White House; and at many points in favor of fair treatment of women and the LGBTQI+ community. Notably, the business advisory councils established by the Trump administration collapsed in reaction to its apparent coddling of the extreme racism on display in the streets of Charlottesville, Virginia. 2017 may well be considered the year when the C-suite, to use the word we heard so much this year, got woke.

Words are important, and this year they have been more important than ever. But actions are what we really need.

This year brought many signs of important business action. Globally, business remains deeply committed to addressing climate change. At last week’s Summit, new commitments were made by AXA on divestment from coal and oil sands; two dozen companies joined the Powering Past Coal initiative led by Canada and the United Kingdom; and more than 230 organizations expressed their intention to adopt the recommendations of the Task Force on Climate-Related Financial Disclosures. As President Macron stated last Tuesday, the world is moving too slowly; nonetheless, there is a great deal of action, and it is accelerating.

Progress has been made on other fronts as well. In addition to what we sincerely hope will be a turning point on sexual harassment, new steps have been taken to empower women around the world. Several companies, including Johnson & Johnson, Google, Mars, Microsoft, and Unilever launched the Unstereotype Alliance in partnership with UN Women—a new global alliance set to banish stereotypical portrayals of gender in advertising and all brand-led content. And more than two dozen companies, including Levi Strauss & Co. and TD Ameritrade, have expressed their support for the protection of family planning services in the face of the potential loss of these rights in the United States through Planned Parenthood’s Business for Birth Control effort.

The UN Forum on Business and Human Rights showed record turnout this year, and many companies have expressed their intention to continue taking and communicating action on conflict minerals despite the withdrawal of regulations under the U.S. Dodd-Frank law. In other contexts, legal provisions on supply chain and modern slavery continue to expand.

This was also a year when new issues emerged and became more important, as we outlined in our report on The Future of Sustainable Business. More and more, the future of work, climate resilience, and the human rights impacts of new technologies are being discussed in board rooms. Solutions are not yet here, but we can see growing recognition that the profound changes are reshaping business as fundamentally as they are disrupting the “old economy.” For 2018, we hope that more decisive action will begin to flow from this awareness.

In a year with lots of unrest, there is much the business community did to speak out when needed and apply its resources to the world’s most pressing challenges. This is not to say that the private sector got it right all the time. Big issues remain, and corporate missteps occurred this year as they do every year. Even now, traditional business associations have continued to lend support for a deregulation agenda in the U.S. that undercuts the very sustainability commitments from the private sector that have become mainstream.   

Looking ahead, the massive shifts in our world will continue to define not only sustainability, not just business, but in fact everything, from our daily routines to the building blocks of the world’s economy. How business responds to—and better yet, shapes—these tectonic shifts will define the years and decades ahead.  We will turn to that, and what BSR will be doing to meet this moment, early in the new year.

For now, let us celebrate the leadership business exerted in 2017, and use that as a springboard for positive change in the year to come.

Blog | Monday December 18, 2017

Surveying the Human Rights Landscape: The Evolving External Environment

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This is the second of a three-part series featuring our human rights experts’ reflections on the evolving business and human rights landscape in 2017, as well as their perspectives on emerging issues we anticipate in 2018.

Margaret Jungk, Managing Director, Human Rights (San Francisco)

Climate change, corruption, and tax evasion aren't usually thought of as human rights issues by lawmakers or the public, much less companies. But increasingly, that is changing, and I think this is an important trend to reflect on.

The expanding application of human rights seems to be driven by two things. First, human rights language highlights the direct, individual, and, well, human impact of things like climate change and tax evasion. Global trends do not occur in some cloud over everyone's head. They have real consequences on very real, often very vulnerable people, and this new way of talking about global issues highlights those impacts. Second, human rights language generates more traction and attention. For years, people said that there was no way to make something like tax avoidance by companies 'sexy,' and global citizens would never protest in the streets or write to their congressperson to address it. This new language contradicts that view, and has allowed advocates to shine light on complicated, long-term, and technical issues that went unnoticed for far too long.

Peter Nestor, Associate Director (San Francisco)

My key observation from the past year is the pace at which binding legal instruments now require companies to understand and manage their impact on human rights. More governments around the world are imposing legal requirements for human rights due diligence, reporting requirements, and responsibilities for human rights management in the supply chain.

In-house legal counsel are taking a fresh look at their human rights obligations, from a legal compliance standpoint as well as from a human rights perspective. The scope of responsibility is becoming clearer, and leading companies are testing new bounds of what's possible when companies manage, report, and proactively improve their human rights performance. BSR works increasingly with in-house counsel and outside law firms like White & Case to ensure that their lawyers are properly trained in advising corporate clients on human rights. My prediction for next year is that we'll see more lawyers embrace their expanded role as human rights advisors within companies.

Alison Taylor, Director, Sustainability Management (New York)

In 2017, we saw supply chain oversight come of age—particularly as a result of the U.K. Modern Slavery Act. The Act itself isn't perfect, but it is built on the presumption that companies are responsible for managing not just risks to operations, but also the impacts of those operations. Even where the Act falls short on enforcement, companies have received the message, loud and clear, that more laws like this are in the pipeline, and they have started seriously grappling with the impact of their external relationships. The human rights field’s focus on impact presents a core challenge to attempts to incorporate human rights into current compliance approaches. Practitioners will need to work hard to ensure companies maintain this focus, as it requires new thinking and frameworks.  

This new landscape is extremely challenging for companies to navigate. At the moment, there is no standard good practice approach, and companies are also grappling with tradeoffs between transparency and liability when they try to openly acknowledge their challenges. But the expansion of corporate responsibility to issues like prostitution and victims' rights, even at the domestic level, sets a precedent that can be expanded.

Farid Baddache, Managing Director (Paris)

I found it very encouraging that over the past few years, we've seen so many organizations strengthen human rights into existing regulatory and business frameworks. Things like the IFC Sustainability Framework and Performance Standards, OECD Guidelines on Multinational Enterprises, ISO26000, Bilateral Investment Treaties, and stock exchange listing requirements may not earn headlines when they are updated or their requirements are tightened. Yet in 2017, these frameworks constitute the invisible architecture within which companies operate, and thus, the private sector takes them increasingly seriously. All of these structures are increasingly recognizing, and requiring, human rights protections. 

It's something businesses are watching very closely, especially as they look to 2018 and more legislative developments on the way. In 2018, a company with more than 500 employees based under the EU Non-Financial Reporting Directive will have to report on human rights (this will be true for companies with more than 250 employees in some countries). Companies impacted by the U.K. Modern Slavery Act across the value chain will have to report on risks and mitigation plan for the second year—supplemented by a similar initiative from Australia in 2018. The largest German companies are expected to report to government on their human rights due diligence efforts in compliance with Germany’s UN Guiding Principles on Business and Human Rights Action Plan. French companies will have to disclose detailed due diligence reports in response to the 2017 Duty of Vigilance Law.

Soft law and hard law are converging to build an operating environment that asks companies to conduct robust documented due diligence, act upon the findings, and build trust in their capacity to mitigate risks by doing good business with respect to their human rights duties.

Roger McElrath, Associate Director (San Francisco)

The issue of living wages continues to gain momentum in policy discussions and corporate approaches to managing human rights. An adequate standard of living is a core element of human rights, and thus the concept of living wages is well established in the foundational instruments that set the parameters of international human rights.

Multinational corporations have come under increasing stakeholder pressure to address the issue of the adequacy of wage levels for their own employees as well as workers in their supply chains. There are challenges for companies in implementing living wage programs for their own employees, and the issues and complexity are equally significant when considering how to support living wages for workers in supply chains by exerting influence over their suppliers’ wage setting processes and/or host country laws and regulations.

In 2017, BSR has been actively involved in the implementation of living wage programs for a growing number of companies across a range of industries and locations spanning more than 100 countries, and our work includes establishing the scope of a program, creating internal management frameworks, calculating living wages, and engaging with country offices and external stakeholders. As the world of work continues to evolve as a result of old drivers, like global competition, and new drivers, like artificial intelligence, the issue of the adequacy of incomes and standards of living will bring even more attention to companies and the question of whether or not they and their suppliers are paying living wages.

Blog | Friday December 15, 2017

In Case You Missed It: Noteworthy BSR Insights of 2017

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As the year draws to a close, we are taking a moment to reflect on the turbulent year that has been 2017. In addition to the top blogs and reports of the year, we wanted to share with you some of our favorite series and stories that you may have missed.

Our first series of 2017 was on shared solutions to global challenges. It explored outcomes and impacts of our work with partners and through our Collaborative Initiatives. As part of this series, we launched two new efforts—Building Responsibly and the Future of Reporting initiative.

We also ran a series on the business case for climate action, in partnership with We Mean Business, that dove deep into corporate energy management trends, business resilience in the face of extreme weather, and the influence of global value chains on climate action from business.

During Climate Week NYC, we brought these two themes together in a series on climate and collaboration, with our thoughts on new climate leadership to realize the Paris vision; the need for radical collaboration, inside and outside of companies; and company examples of collaborating to achieve climate leadership. In short, we are seeing collaboration on a massive scale across all sectors, including and especially from business, to achieve the objectives articulated in the Paris Agreement.

We also sat down with the practice leads from each of our areas of expertise—climate, human rights, inclusive economy, supply chain sustainability, sustainability management, and women’s empowerment—to talk about the future of sustainable business in a Q&A series. Their thoughts also helped inform our report on The Future of Sustainable Business, which we released in October.

We published quite a few insights outside these series that are worth revisiting, too. Here are some of my favorites:

• To feel inspired by successful pilots to promote women’s health and empowerment, read Dorje Mundle’s Innovative Financing for Sustainability at Scale.
• To give your brain a workout by thinking through the human rights implications of artificial intelligence, and specifically what remedy should look like for decisions made by machines, see Remedy against the Machine from Dunstan Allison-Hope.
• To remind yourself why you bring your values to your day job, and why business leadership on diversity and inclusion is more important now than ever, read Now Is the Time to Examine (and Re-Examine) Your Commitment to Diversity and Inclusion from Aditi Mohapatra.
• To learn about (and then explore!) a tool to help you empower women in your business, check out A New Tool to Help Close the Gender Gap by Lauren Shields.
• To get excited about the transportation innovations that will revolutionize the way we get from point A to point B, as well as their sustainability implications, enjoy Sustainability on the Move: Transportation Innovation by John Hodges.

What was your favorite BSR content from the past year? Connect with us on Twitter @BSRnews to share.

Blog | Thursday December 14, 2017

The Top BSR Insights of 2017

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To close out the year, we looked through our archives to see what insights from our sustainability experts you most enjoyed reading. Common themes appear throughout: a focus on futures thinking, increasing consumer demand for sustainability, new expectations for ethical and sustainable business, and the importance of continuing work to empower women.

Here are the most-read BSR blogs and reports of 2017.

Top Five Blogs of 2017

1. HERproject at 10: Celebrating HERsuccess, Inspiring HERfuture
   By Christine Svarer, HERproject Director 
   On International Women’s Day this year, we took a moment to think about what we have achieved with HERproject over the past 10 years and what we have left to do.
    
2. Introducing the Sustainable Futures Lab
   By Jacob Park, Sustainable Futures Lab Director 
   In September, BSR launched the new Sustainable Futures Lab, a new practice that will conduct research on horizon scanning and big data and offer consulting on scenario planning and “future-proofing,” all to meet the increasing needs for futures thinking.
    
3. Investors, Consumers, and Markets Demand Climate Action: Four Trends for Your Business to Know
   By Emilie Prattico, Former Manager
   Here are four business-driver trends that you should know as you explore how to implement climate strategies that support a low-carbon economy.
    
4. The State of Sustainable Business in 2017: Results from the Ninth Annual BSR/GlobeScan Survey
   By Laura Gitman, Senior Vice President
   Data from this year’s State of Sustainable Business Survey indicate that there is no question if business will lead on climate change, inclusive growth, human rights, and other sustainability priorities. Now we must answer how.
    
5. When the Business Case and Shared Value Aren’t Enough
   By Laura Gitman, Senior Vice President
   Yes, businesses have to earn profits and provide a return to their investors, but has the focus on a business case for everything undermined what it means to be a good corporate citizen?

Top Five Reports of 2017

1. Big Brands, Big Impact: A Marketer’s Guide to Behavior Change
   By Elisa Niemtzow, Managing Director; Edwina McKechnie, Manager
   In this report, we explore how companies can trigger simple behavioral shifts that enable more sustainable lifestyles, grow demand for more sustainable products, and create business value. It also offers insights on how sustainability teams can more readily engage with internal marketing colleagues.
    
2. The Five Levels of an Ethical Culture
   By Alison Taylor, Sustainability Management Director
   This working paper highlights the five levels at which business can build an ethical culture: at the individual, interpersonal, group, intergroup, and inter-organizational level.
    
3. The Future of Sustainable Business
   By Aron Cramer, President and CEO; Jacob Park, Sustainable Futures Lab Director; Eric Olson, Senior Vice President; Elisabeth Best, Communications and Marketing Manager
   The time is here for a new approach to sustainable business. Business as usual won’t get the job done—and sustainability as usual won’t suffice. This paper offers our thinking on where to go next and kicks off the conversation for 2018 and beyond.
    
4. Empowering Female Workers in the Apparel Industry: Three Areas for Business Action
   By Christine Svarer, HERproject Director; Racheal Meiers, Former Director; Berkley Rothmeier, Manager
   This business brief proposes three areas where apparel companies can build from a strong foundation to better drive improvements in outcomes for women workers and promote women’s economic empowerment around the world.
    
5. The Supply Chain Leadership Ladder
   By Tara Norton, Managing Director; Meghan Ryan, Manager; Jeremy Prepscius, Asia-Pacific Vice President
   This working paper introduces the Supply Chain Leadership Ladder, a maturity model for supply chain sustainability programs that companies can use to develop their program toward deeper impact.