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Blog | Tuesday March 30, 2021

Inside BSR: Q&A with Sethypong Sok

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March is always an exciting time, kicking off with International Women’s Day. Throughout the month, we celebrate BSR’s work to empower women, including HERproject, our collaborative initiative bringing together global brands, their suppliers, and local NGOs to deliver workplace-based programs to workers in global supply chains.

It made sense to us to feature Sethypong Sok, HERproject’s country representative in Cambodia, for this month’s Inside BSR interview. Sethypong works with global brands and factory management as well as multinational and local financial services providers to design and implement financial literacy programs for low-income factory workers, particularly women.

Read on to learn more about Sethypong, his work on HERproject, and his drive to lift fellow Cambodians out of poverty.

Tell us a bit about your background. Where are you from, where are you based, and how did you get into working on women’s empowerment and worker well-being?

I come from the Kingdom of Cambodia, or simply known as Cambodia, located in Southeast Asia. I was born in 1993, the same year when the United Nations Transitional Authority administered the first national elections for my country. In 2012, I graduated from high school with an outstanding degree. And despite the poverty trap my family encountered itself, I was persistent enough to pursue a bachelor's and master's degree at Pannasatra University of Cambodia with the faculty of Social Science and International Relations.

I meet and speak with people and workers who face countless hardships due to poverty. My feelings of powerlessness and pity actually strengthen my dedication to the goal of helping them have their voices heard and their rights fulfilled. By being part of driving HERproject in Cambodia, I feel I am a part of the solution.

I have more than seven years of experience working in non-profit organizations and in the development sector in various positions to serve local communities, vulnerable groups, or hard-to-reach populations, including children, women, survivors of labor and sexual exploitation, and low-income workers in Cambodia.

I started working in supply chains and worker well-being as a Trainer with Youth Employment Service Centre (YESC). At that time, I provided support services and training to factory managers, workers (particularly women workers), and young people aiming at enhancing employability, encouraging them to fulfill their potential, and increasing their economic opportunities.

Tell us about your work at HERproject. What is your current role and what does that entail? What are some interesting projects that you get to work on as part of your role?

I am currently serving as an in-country representative for BSR’s HERproject. I have been with HERproject for almost two years. I am responsible for managing HERproject program activities and leading other Women’s Empowerment projects in Cambodia. My main role is to liaison with the multinational financial services corporation, local financial services providers, brands, and factories management to design projects which aim at strengthening, implementing, and ethically enforcing internal procedures and policies in expanding the financial inclusion of low-income workers.

Currently, in Cambodia, we are piloting HERfinance Digital Wages. The project aims at ensuring the poor—particularly women—have the proper knowledge, skills, and attitudes toward financial services and enabling them to participate in the formal financial sector. I do enjoy working on this project because I am always excited to work on programs that aim to promote and enhance financial services in a timely manner through a sustainable financial system. This will help to bring these people—the unbanked—into formal financial services by supporting the development of an efficient and stable financial sector. At the same time, I also can gain extensive knowledge and skills on cooperating with social responsibility, union representatives, and financial service providers in global supply chains.

What issues are you passionate about and why? Does your work at HERproject reflect that?

My motivation to get involved and solve community problems started since I graduated from high school. I could not see myself being in another field not related to humanitarian work. I grew up in a country with a long history of the periodic humanitarian crisis, which undoubtedly affects the majority of the vulnerable population, particularly disrupting their welfare and education, security, the access to quality of public health service, and the shortage in skilled workers.

Another inspiration driving me to address the society complications was from my work experience, particularly from field work activities, where I meet and speak with people and workers who face countless hardships due to poverty. My feelings of powerlessness and pity actually strengthen my dedication to the goal of helping them have their voices heard and their rights fulfilled. By being part of driving HERproject in Cambodia, I feel I am a part of the solution.

2020 was undoubtedly a difficult year. What were the things that brought you joy amid lockdowns/quarantines? What are you most looking forward to when the pandemic is over?

Amid the challenges of 2020, I’m grateful that I can keep up with friends on social media platforms and connect with folks via videoconferencing, even if these aren’t really the same as seeing people in-person. I also enjoy this new normal that I never would have guessed how easy it is to do without so many modern conveniences.

I am looking forward to COVID-19 ending and not having to wear a mask and being able to give hugs to my friends and family again. I can’t wait to be able to high-five and shake hands with my friends, family, co-workers, and neighbors. I look forward to seeing all the smiling faces that have been hidden behind masks for years now.

Blog | Wednesday March 24, 2021

What Businesses Operating in Vietnam Can Do about Climate Risk

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All companies with business operations or supply chains in Vietnam need to know that the country is highly vulnerable to the impacts of climate change—and need to be aware of the ways they can build resilience.

Just last October, two mega-typhoons flooded communities, displaced families, and took lives in what is becoming an all too familiar pattern. In fact, Vietnam is one of the world's areas most affected by climate variability and extreme weather in the past two decades, according to The Global Climate Risk Index 2020.

The financial impacts from climate change are also severe in Vietnam. Infrastructure disruptions from climate change cost businesses in Vietnam an average of US$280 million each year.

Heavy rainfall can lead to flooding and landslides, shutting down roads and airports while damaging or destroying company facilities. Major storms like Typhoon Damrey in 2017 left an estimated US$1 billion in economic losses for Vietnam. In 2020, business interruptions from climate change affected thousands of local enterprises due to manpower shortages, scarce input material supplies, or damage to facilities. 

Climate projections indicate Vietnam will experience more intense extreme weather events in the future. By 2030, major cities such as Ho Chi Minh could experience an increased chance of extreme heatwaves, diminishing worker productivity in sectors from agriculture to construction to logistics.

Hanoi could experience heavier rainfall, straining urban wastewater systems and exposing coastal development to storm surges. The implications are wide-ranging, from increasing pest prevalence that limit crop yields to worsening the spread of vector-borne disease to deepening the economic hardship of at-risk communities.

How Businesses in Vietnam Can Prepare for Climate Risks

Fortunately, there are ways businesses in Vietnam can reduce their climate risk. To better prepare for the reality of climate change, businesses can build resilience: to anticipate, absorb, accommodate, and recover from relevant impacts. To do this, companies need to systematically explore where and how the business environment may change in the future. Scenario analysis is a commonly used process to explore different plausible futures. This tool allows companies to “stress-test” strategies and ensure adequate preparation for a range of potential outcomes.

For businesses in Vietnam, BSR has crafted three scenarios in English and in Vietnamese, describing plausible future business environments in 2030, that differ on climate severity and socioeconomic development. The physical impacts from climate change are inevitable and may vary in different scenarios. Layered on top of that, there will be interconnected impacts from a potential transition to a low-carbon economy as well as socioeconomic developments. These three scenarios uniquely explore different plausible futures:

• Inequitable Expansion: Vietnam and the global community have largely transitioned towards low-carbon economies, but societal development has lagged and seen greater urban inequity.
• Braving the Heat: Climate change is no longer debated globally, and the international community focuses on sustainable development. However, Vietnam sees comparatively limited progress.
• Acute Fragmentation: Intensifying climate change has worsened country relations, leading many states like Vietnam to emphasize energy security through extractive resource and protectionist policies.

How Climate Scenarios Help Business Prepare for the Future

These three scenarios are not predictions of the future in 2030. Rather, they are tools that can be used to explore critical uncertainties about the future, challenge assumptions, and identify blind spots related to disruptive change. They are meant for companies to use in internal workshop settings, where key participants from diverse business functions can actively discuss risks and opportunities that arise from climate change and prioritize core topics for appropriate action.

In this scenario analysis exercise, for example, workshop participants could imagine linkages between prolonged dry spells and food availability and the direct impact these may have, not just on the bottom line but also on employee well-being.

Or a business could explore the impact of supply chain disruptions due to submerged road networks and also consider blind spots from a resurgence of infectious diseases that thrives in warmer climates. After more than a year in the ‘black swan event’ that is COVID-19, companies cannot avoid discussions of preparing for shocks to the system.

From here, enterprises can decide how to leverage a range of risk interventions to address impacts from climate change and find new opportunities for business growth—from offering disaster risk reduction training to employees and enhancing employee health coverage, to investing in both green and gray infrastructure to climate-proof facilities, to offering new products or services that can help others build climate resilience.

Building Climate Resilience

It’s undeniable that climate change negatively impacts Vietnamese businesses. However, most companies are relatively optimistic about opportunities in the context of natural disaster risk and climate change, according to an Asia Foundation survey conducted in August 2020 of more than 10,000 enterprises across the country. They see opportunities for restructuring, overhauling production methods, and creating new markets for products and services. They are willing to invest in environmental compliance, good local labor quality, and vocational education for their workforce.

Actively enhancing climate resilience would meaningfully build off this energy and prepare businesses and the communities they operate in for addressing the complex challenges of climate change. To further help equip enterprises in Vietnam with business-relevant climate knowledge, BSR has also compiled a handbook of tools and resources in English and in Vietnamese. 

BSR conducted this project in collaboration with Winrock International’s Private Investment for Enhanced Resilience (PIER) project, which aims to increase the awareness and capability of the private sector in Vietnam to address the physical impacts of climate change across the value chain in the country.

Blog | Wednesday March 24, 2021

Transforming Business for Resilience

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We are living through extraordinary economic and social change where "transformation" has become our daily routine. And "resilience" is a term often used to signal the formula for the road ahead. And yet, what does this mean for businesses today?

I am absolutely thrilled to join BSR as Managing Director of Business Transformation. There has never been a more exciting or inspiring time to work for an organization dedicated to creating a just and sustainable world.

I come to BSR with over 20 years of experience working for multinational corporations in the tech sector, based mainly in Europe. I’ve grappled firsthand with the challenges of setting the right strategies to build and rebuild globally recognized brands following mergers and numerous acquisitions. And at a time when sustainability was seen "optional" for companies, I had the immense honor of working with European CEOs who saw the importance of creating leading sustainability frameworks as real business differentiators—ones that enabled transformational change across both the company and the communities where they were present.

What I have learned is that those successful and resilient businesses are the ones that are able to go beyond short-termism, to achieve long-term value for all stakeholders. They do not act in isolation. They work in active ways that are deliberately interconnected—through continuous proactive dialogue across the entire ecosystem, with leaders and experts alike. They challenge global assumptions, co-create new regional approaches, and bring along new stakeholders, while sharing the outcomes and future learnings with all: business, investors, public authorities, and civil society.

As I embark on my first months at BSR, here are three insights for how business can be more resilient:

1. Business transformation must be seen as a holistic company renewal effort across every activity.

At BSR, we call this "resilient business strategies." And for this resilience to happen, it must do three core things:

1. Anticipate material changes to the operating environment
2. Systematically develop and test strategic plans in the context of such changes
3. Allocate resources and create value in ways that enable success in multiple potential futures and collective action

Resilient business strategies are crucial not only for lasting business success, but also for a just and sustainable—and resilient—world, the importance of which we see more clearly than ever.

2. A resilient business strategy on its own is not enough.

Our world today is proving that resilient businesses can only thrive in resilient societies and economies. Neither can work without the other. And yet, societal resilience is being tested every single day—from environmental disruption to political dysfunction to income inequality to flaws in the social contract affecting economic and social mobility. For society and economies to thrive, they need an active partner in resilient businesses, ready to transform for the long term, and enabling systemic change. Both go hand in hand.

3. The deep and interconnected changes remaking our world demand collaborative action.

At BSR, we are inviting our members and all companies to partner with us to shape, test, and catalyze resilient business strategies that create long-term value in a rapidly transformed world. Shape by creating a shared understanding of what resilience means for both business and society, exploring both the building blocks for resilient business and what a 21^st-century social contract would look like; test resilience through futures scenarios; and catalyze action by bringing both business and societal leaders alike together in a dialogue for change through collaboration.

Resilient business strategies, founded on building blocks addressing elements such as governance, financial capital deployment, product and business model development, natural capital management, built environment, supply chains, people strategies, and public policy, can achieve strategic advantage in a way that anticipates long-term changes for business.

Through scenario planning, our Sustainable Futures Lab can help companies test resilience across our proposed building blocks while challenging leaders—from Boards to CEOs to the entire C-suite—to ask the right questions for long-term transformation.

Finally, we know resilient businesses are hard to achieve in fragile societies. This therefore calls for collective action, bringing representatives from business and society together in a dialogue of like-minded leaders to achieve systemic change. 

Mark Carney in his recent Financial Times article stated: “Building resilience means building buffers”—fiscal buffers, pandemic preparedness, digital connectivity for all to climate solutions. However, what draws us all to a common line is the deep conviction that we need to come together to enable a revolution of sustainable transformation: business, society, and the economy hand in hand.

When I joined BSR, I knew there was never a better moment to throw in my own hat to drive positive change for business with society, where ESG was at the core of a wider transformation in this Decisive Decade. And while I continue to learn each day of new challenges arising from our business members, I remain inspired by the active will across our membership and my colleagues at BSR to explore and co-create new solutions to create a just and sustainable world, through dialogue and constructive action.

It’s an extraordinary challenge—join us to drive resilient businesses today, hand in hand with society, to transform business and create a more just and sustainable world.

Reports | Tuesday March 23, 2021

Resilient Business Strategies: Decisive Action for a Transformed World

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A World Transformed

After the tumultuous events that erupted last year and continue to reshape our world, we need no reminder that we are living in an era of profound turbulence and historic change. 

The deep and interconnected changes remaking our world demand bold action. Simply aiming to integrate elements of sustainability into a business’ core strategy is no longer sufficient.

For business, the call to action could not be clearer: resilient business strategies are more urgent than ever today and are the key to achieving value for all stakeholders in the long term. They will lead to nimbler and more innovative companies.  

But it is not just about a process that drives company and stakeholder value. Resilient business strategies are an essential pathway to achieving a just world and an economy that delivers truly inclusive and sustainable prosperity.

Blog | Friday March 19, 2021

Forced Labor and Human Trafficking: Four Regulatory and Legislative Trends Business Should Watch

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Governments are increasingly scrutinizing human trafficking and forced labor abuses in private sector operations. In addition to the moral imperative to address these abuses, businesses should be on alert given the significant disruptions in supply chains that government regulation may cause, resulting in potential economic, legal, and/or reputational harm. Apparel, food and beverage, technology, and financial services companies in particular should closely monitor and prepare for global regulatory developments.  

1. Companies should expect more active involvement from civil society organizations in the U.S. Customs and Border Protection’s Withhold Release Order process.

The Situation

The U.S. Customs and Border Protection (CBP) has utilized Withhold Release Orders (WRO) to suspend the importation of goods at a U.S. port of entry when the agency has reasonable evidence of the use of forced labor in the manufacturing or production of a good entering the U.S. supply chain. The onus is then on the importer to demonstrate to the U.S. government that the good was not made with forced labor. In the last two years, the CBP has ramped up its use of this enforcement tool, issuing 13 WROs across multiple industries in 2020 alone.

While the CBP has welcomed the public to submit information on merchandise that could be considered for a WRO, there has been limited visibility on submissions until now. In February 2021, anti-trafficking organization Liberty Shared submitted two petitions to the CBP concerning the use of forced labor in the supply chains of the apparel industry in Leicester, UK and of Boohoo, PLC. 

What Business Can Do

Companies which have identified forced labor as a supply chain risk should be conducting ongoing human rights due diligence to identify, assess, and mitigate potential or actual risks of forced labor, engage in meaningful dialogue with rightsholders, and ensure their grievance mechanisms are working.

2. Companies should prepare for increased regulation and withholding of products sourced or manufactured in Xinjiang, China.

The Situation

Reports have described the mass internment and surveillance of over a million ethnic Muslim minorities in Xinjiang, China. News sources detail how Uyghurs and other minorities are being forced to work in factories that produce raw materials and goods which are shipped throughout China and around the world. Reports have also documented the capital provided to Chinese technology companies by financial institutions and private equity firms to support the mass surveillance of Muslim minorities. Industries implicated in these reports include food and beverage buyers, pharmaceutical companies, apparel brands, and technology and renewable energy companies.

In response to these findings, the U.S., Canada, and UK have all published advisories for companies doing business in or with links to Xinjiang. The U.S. has also passed a Uyghur Human Rights Policy Act, issued sanctions, and banned the entry of goods allegedly produced by forced labor in Xinjiang. The EU is considering implementing sanctions as well.   

What Business Can Do

Companies should map business activities and business relationships with suppliers, customers, and end users of products in China and conduct due diligence on business relationships to ensure that they are not working with entities that are involved in aiding human rights abuses. With business challenges related to Xinjiang unlikely to disappear in the short term, companies should work with third parties such as NGOs, industry associations, and business associations to better understand the human rights situation, and they should also craft and pilot traceability measures in collaboration with peers. See guidance from the CBP on best practices here.   

3. Companies should begin planning for more stringent modern slavery disclosure requirements

The Situation

In response to calls from business leaders, civil society, and legislators to strengthen the UK Modern Slavery Act, the UK government in September 2020 announced proposals that would require businesses to report against each of the six reporting areas and would make approval and sign-off requirements more stringent. In September 2020, the New South Wales government signaled its intent to enact a Modern Slavery Act (NSW MSA), which would include a provision to require more entities across Australia to submit a modern slavery statement by lowering the national reporting threshold from AU$100 million to AU$50 million. In addition, the NSW government indicated its position to levy financial penalties for breaches of the Act. A modern slavery disclosure bill was also introduced to Canada’s Senate in October 2020. While sharing similarities with Australia, California, and the UK’s disclosure legislation, Canada’s bill could be the first to allow personal liability for directors and officers for non-compliance.  

What Business Can Do

Businesses subjected to the UK Modern Slavery Act should be prepared to report against the proposed requirements. Companies that are not captured under an existing legislative scheme should at minimum understand where human trafficking risks may be present in their supply chain and proactively take prevention measures. As more governments enact modern slavery acts, more robust legislation on supply chain due diligence is on the horizon.  

4. Companies should be aware of heightened scrutiny of illicit financial flows linked to human trafficking.

The Situation

There have been some signals suggesting that companies with weak compliance systems to capture proceeds associated with human trafficking may be the subject of future attention by government authorities.

For example, in July 2020, Deutsche Bank was fined US$150 million by the New York State Department of Financial Services for failing to maintain an effective and compliant anti-money laundering program related to client Jeffrey Epstein, his sex trafficking enterprise, and correspondent banks. In September 2020, Australia’s financial intelligence agency, AUSTRAC, reached a AU$1.3 billion settlement agreement with Westpac Banking Corporation for facilitating transactions that enabled child exploitation in the Philippines.

What Business Can Do

Financial institutions should integrate indicators of human trafficking into their compliance systems to capture financial flows that may be connected to human trafficking. In addition to facing fines, financial institutions face potential criminal liability through the U.S. Trafficking Victims Protection Act and UK Criminal Finances Bill. Financial institutions should assess their links to human trafficking and forced labor holistically through their lending portfolios, core business operations, platform, and business relationships. Guidance from the FAST initiative and FinCEN on identifying and reporting human trafficking may be a good start.

To learn more about the Global Business Coalition Against Human Trafficking (GBCAT) and BSR’s work with business to address forced labor and other forms of modern slavery risks in global supply chains, please reach out to our team.

Blog | Thursday March 11, 2021

Leading with Equity: How Companies Can Promote Social Justice through DEI

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I have a very simple professional philosophy: No one voice should be louder than the other. No one hand should control every action. No one perspective encompasses everyone’s reality. No one body should take up all the space. We all add value, and we all belong. I am excited to bring this philosophy to BSR as Director of Diversity, Equity, and Inclusion (DEI) and to further our mission to build a more just world.

In my nearly 20-year career, I have had the honor and privilege of working with people from a wide array of backgrounds and experiences—ranging from the deepest of grassroots to the highest levels of government—across a wide spectrum of social justice issues as a funder, advocate, and strategist. Most recently, I have worked with companies to help reimagine their DEI strategies to center equity, a key component of social justice.

Companies are powerful stakeholders that have the ability to help shape a more inclusive world in which all people have fair access to opportunities and the ability to participate in activities to better their lives.

I believe that companies are in a unique position to drive broad impacts that extend well beyond their HR and supply chain operations. In fact, companies are powerful stakeholders that have the ability to help shape a more inclusive world in which all people have fair access to opportunities and the ability to participate in activities to better their lives. To achieve this, companies should keep the following four things in mind:

1. It’s not about outputs. It’s about impact.

To start, we need a radical shift in mindset and vision for how business can be levers for positive social change. This includes stretching beyond a focus on traditional KPIs and diversity metrics, which are normally shorter-term quantitative measures, and instead going deeper by looking at quality or effect of these efforts over a stretch of time. 

I like to think of it as the big ‘so what?’ question. This means that businesses should be more intentional about how they are setting DEI targets and see them not as mere transactions but as  opportunities to create meaningful transformation, both within the business and at the community level.

2. Companies are not independent actors. They are community stakeholders.

Setting and achieving big, bold, transformative DEI goals is not an insular endeavor; it creates ripple effects outside of a company’s day-to-day operations. The business sector must be willing to see itself as a co-conspirator in the pursuit of social justice and inclusion alongside other anchor institutions such as government, NGOs, and academia.

More importantly, companies need robust community engagement strategies that proactively seek to engage and build relationships with—not just include—the oft-forgotten voices of marginalized frontline communities. Such communities often lack power and influence but are rich with insight, ideas, and data steeped in lived experience. Their direct participation can provide businesses with information about issues relevant to their quality of life, help to identify and remove barriers to opportunity and accessing resources, and establish an added layer of external accountability.

BSR’s approach to helping businesses advance their understanding of DEI is one that will also inform how we engage with our member companies and partner agencies.

3. Aim to learn rather than to lead.

Becoming an equitable and inclusive business is an iterative process that requires a commitment to learning and a willingness to grapple with the uncertain. Unlike many other business operations, DEI is about shifting behaviors, which is an adaptive challenge where there are no one-size-fits-all approaches. Company leadership should dedicate time and resources to develop and refine a shared vision for action with stakeholders at all levels, test strategies to determine what works best given their unique set of circumstances, and understand that there are no quick fixes—changing a company’s culture takes time and requires constant experimentation.

Additionally, because it is about systems change, DEI is an area that requires collaboration over competition. Business leaders have an opportunity to establish a community of practice in which they can engage in peer-to-peer learning, have a safe environment for sharing challenges, and most importantly examine ways in which DEI can drive innovation for the sector.

4. DEI is not an add-on function. It’s a lens through which business operates.

Lastly, DEI is more than a set of aligned strategies within a company’s HR, supply chain, and corporate philanthropy departments. It is a philosophy that permeates throughout a company’s business operations and is a way to actualize its stated values.

A strong DEI plan enables a company to apply a critical lens to its policies, practices, and programs and to identify how it can be more inclusive and create opportunities for those who are systematically marginalized. It also means reimagining the power of business to drive systemic change and meet the needs of society’s most vulnerable.

The BSR approach

I am a strong adherent of modeling the behavior that we wish to see from others. BSR’s approach to helping businesses advance their understanding of DEI is one that will also inform how we engage with our member companies and partner agencies.

We see ourselves as part of a larger ecosystem of actors seeking to create a world in which everyone—regardless of identity or background—is afforded the opportunity to equal participation in all aspects of life, has fair access to resources, and can be assured that systems are operating in ways that improve the quality of life for all, and not a select few.

BSR believes that to achieve this, we must prioritize the needs and voices of those who have been and continue to be subject to marginalization and exclusion. Anchored by this belief, our DEI offerings will take on an “equity-first” approach that embodies all the above-mentioned precepts.

I will admit that this vision for BSR’s DEI work is ambitious and will at time feel fraught with discomfort and chaos. But DEI is a tool for disruption, and it is in the commotion that magic emerges. I look forward to pushing us beyond our comfort zones and tapping into that most radical part of our collective imagination—the part that sees a ‘just world’ as more than a mere aspiration, but as a reality that BSR is shaping.

Blog | Tuesday March 9, 2021

The Human Rights Impacts of Workplace Monitoring Technology

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The monitoring of employees by employers is not a new phenomenon, but it seems to be entering a distinctly new phase.

Today, it is increasingly common practice for large companies to implement employee monitoring, whether to increase productivity in warehouse distribution roles, maintain quality control in manufacturing, or bill accurately at consulting firms.

The COVID-19 pandemic has seen the sudden move of many millions of workers around the world to home-working—and this has accelerated the use of tools designed to monitor workers in new and even more invasive ways that respond to the unique conditions of a pandemic. Techniques such as screen capture, measuring keystrokes, webcam photos, and web monitoring are being used to “prove” employees at home are meeting employer expectations.

All workers face these risks with the rise in use of technology in the workplace. However, workers in low-income jobs, with insecure employment status, or irregular schedules are particularly vulnerable, and women and people of color make up a disproportionate share of these types of jobs.

Despite this widespread use of workplace monitoring already taking place, there is no internationally recognized framework governing how these tools can be deployed in a rights-respecting way. While the International Labour Organization (ILO) published a non-binding code of practice to provide guidance on the protection of workers’ personal data in 1997, there is no ILO convention or recommendation covering workplace data protection, privacy, and non-discrimination issues in a modern setting.

Employers need to consider several human rights impacts that may arise from workplace monitoring tools when implementing such technologies in the workplace:

• Erosion of privacy: There are legitimate reasons why employers need to understand what their staff are doing—such as legal obligations to ensure that sensitive data isn’t stolen or leaked. However, many emerging tools are far more intrusive and risk collecting, storing, and processing personal information that is not work related (such as movement) and use methods where employees may not be aware that monitoring is taking place (such as remote activation). The right to privacy should only be interfered with in ways that are lawful and non-arbitrary, meaning that any compromise has a legitimate purpose and is both necessary and proportionate for that purpose.
• Non-discrimination: New digital tools could accentuate existing workplace discrimination and increase risk for workers from vulnerable groups or marginalized populations. For example, monitoring how many times employees leave their desk during the workday could be paired with automated performance review processes and result in poor reviews, employees being passed over for promotions, or even termination. This disadvantages people who need to leave their desks for prayer or physical disabilities, among other things. The use of "affective technology"— purporting to identify individuals’ emotions by providing insights on an individual’s facial expressions or body language during hiring or performance reviews—present significant risks of discrimination based on gender, race, ethnicity, or other physical characteristics.

The right to privacy should only be interfered with in ways that are lawful and non-arbitrary, meaning that any compromise has a legitimate purpose and is both necessary and proportionate for that purpose.

• Informed consent: Informed consent is an essential concept in the digital sphere and is defined by both participation (i.e. the ability to participate in decisions) and empowerment (i.e. the ability to understand both risks and rights when consenting).
• Power imbalance: The severe economic downturn accompanying COVID-19 will alter the balance of power between employees and employers as unemployment rates rise—workers are much less likely to raise concerns about potentially intrusive surveillance being deployed or choose not to use it while they are concerned about the safety of their jobs.
• Human dignity and agency: The increasing use of digital tools to collect data and inform decisions raises novel issues around human dignity, autonomy, control, self-worth, and well-being, such as whether employees should reasonably expect to have their movements tracked as a metric to gauge productivity or whether insights into employee motivation, energy, and workplace satisfaction derived from psychological or sentiment analysis are a reasonable expectation of employment.
• Freedom of association: There are implications for the morale and motivation of a workforce that is being monitored as it is likely they will conclude that their employers don’t trust them. Some tools can also be used to effectively control what employees discuss, e.g. online content moderation tools that prohibit employees from using words such as “unionize” in online work chats. 

COVID-19 has turbocharged the trend of increased monitoring of employees at work. And post-COVID "back to work" planning has included monitoring of employees’ health, which is some of the most personal data employees have.

More work needs to be done to understand the impact of this kind of monitoring in different types of workplaces to lay the groundwork for the development of an international standard. BSR plans to lead this process, which must be centered on workers themselves: engaging with workers and the groups that represent them is essential. Our goal is to develop actionable guidance on how companies can implement workplace monitoring in a transparent and limited way that protects the rights of individuals and that this is developed through multi-stakeholder dialogue and engagement. We invite companies, donors, and industry and worker groups to join us in this process.

Blog | Thursday March 4, 2021

What Business Can Expect from China’s 14th Five-Year Plan

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The 19th Central Committee of the Communist Party of China (CPC) held its Fifth Plenary Sessions in Beijing in October 2020 to set the outline for the upcoming 14th Five-Year Plan (2021-2025) (14th FYP). The final version of the 14th FYP will be released at the National People's Congress in March 2021. What exactly is the 14th FYP? What are the key macro themes for the sustainability world to watch, and how will they impact business?

What is the 14th FYP and why is it particularly significant?

While every Five-Year Plan (FYP) is emblematic of its own time, the 14th FYP is particularly significant and noteworthy due to China’s impressive recovery from the pandemic, scientific and technological revolution during geopolitical tensions, and its rising profile in international affairs and role in global supply chains. Meanwhile, the time period of the 14th FYP (2021-2025) will be critical for China to lay foundation for many of its ambitious commitments, including but not limited to peaking carbon emissions by 2030 and doubling both current GDP and per capita GDP by 2035. There is no doubt that the 14th FYP will continue to steer the country’s development for the next five years.

Since 1953, four years after the founding of the People’s Republic of China, the FYPs have been the single most important guiding document. Over the last 10 years, the FYP has shifted from a political plan to policy direction for the country’s future economic and social development with strong implementation principles. And the impact of the FYP to business has become more relevant.

Published in 2016, the 13th FYP (2016-2020) put forward comprehensive and balanced development goals for the country and emphasized sustainable development through industrial upgrading, boosting domestic consumption, increasing urbanization rate, eliminating poverty, and improving environmental protection. This was the first time that China set clear sustainability goals and direction, which took root in the public as a simple phrase: "Clear water and green hills are gold and silver mountains."

Despite the U.S.- China trade war and the COVID-19 pandemic, most of the objectives outlined in the 13th FYP were achieved by the end of 2020, especially those regarding environmental protection including the “3-year Blue Sky Battle”, an action plan to improve air quality, which has shocked business operation. Other important achievements included:

• achieved economic growth and grew the middle-income population;
• accomplished environmental and ecological goals related to concentration of fine particles, carbon emissions, water quality, and the elimination of other chemical pollutants, in addition to committing to peak its emissions before 2030 and reach carbon neutrality before 2060;
• eliminated extreme poverty and lifted more than 55 million people out of penury during the period.

What sustainability themes should we expect in the 14th FYP?

The full and complete version of the 14th FYP will be launched at the National People's Congress this month. However, based on discussions in China and the documents from the Central Committee CPC’s Fifth Plenary Sessions, we know there are three major trends to watch:

1. Accelerating green economy and net-zero transition: The 14th FYP period will be the most critical time to steer the overall economic development toward China’s 2030 emission peak commitment and to lay the foundation for its green economy and 2060 net-zero goals. It is expected that environment and climate will be put firmly at the heart of the next FYP, and we also anticipate that many implementation principles and tools will be developed quickly in 2021 to steer the green transformation of key industries and push for clean energy market and solutions innovation at regional level.
   
   China will become an important market and key contributor for international businesses to achieve their climate goals, especially contributing to Scope 3 emissions reduction. This might also result in increasing collaboration opportunities between businesses and other stakeholders to build their renewable energy portfolios and Scope 3 emission reduction pathways. We expect the 14th FYP to include clear measures to guide business actions, especially regarding emission control, green energy strategy, waste management, and recycling. The sectors most likely to be affected include textile, manufacturing, transportation/logistics, agriculture, energy, and infrastructure.
    
2. Boosting domestic market through innovation and technology: In light of the challenging external macro environment and in order to continue to grow China’s national economy and personal income levels, the 14th FYP will focus on boosting the economy through strengthening "internal circulation" (domestic economic activities), accelerating industry upgrades with innovation and technology, and pushing for digitalization with increased provision of "new infrastructure" such as data centers, 5G networks, AI, and internet of things (IoT).
   
   To compete in the Chinese market, businesses will have to show a stronger commitment to innovation and digitalization. Consumer-facing brands will need to cope with and harness various digital channels for marketing, sales, consumer communication, and even product innovation. At the same time, they will need to prepare their manufacturing and research and development (R&D) for fast-changing consumer and policy demand. All of this is expected to take place in China faster than in other parts of the world.
   
   China’s overall goal is to build a well-developed nation with stronger economic power by 2035, and to do so while achieving its climate goals. In this regard, it calls for aggressive business actions to support transforming the country’s industry structure towards energy and resource efficiency. Business will need to take quick measures to transform their energy structure, embrace technology development, and marketing. This will call for business to develop a strategic plan to update their supply chain and plan for growth in tandem with this policy trend.
    
3. Improving well-being and health through enhancing social investment: On the social side, the 14th FYP will continue to improve people’s well-being and health through investing in education and healthcare, providing higher-quality employment and promoting the rural revitalization strategy. Implementation of the Healthy China 2030 vision, a plan to ensure all people in China have access to healthcare, will continue to reform the healthcare, pharmaceutical, and health insurance sectors to deliver quality products and services to people. Rural revitalization will serve as a key lever to strengthen China’s poverty relief efforts and to reduce income inequality through rural livelihood and industry development. That said, it will continue to be relevant for companies in China to enhance social investment in rural areas.
   
   China’s efforts to reduce relative poverty in order to improve overall population’s well-being through education, jobs, skill development, and better health conditions will have an impact on business. There will be opportunities across the agriculture, education, insurance, and public health sectors. Businesses in these sectors will need to develop clear strategies aligned with China’s overall innovation and technology development plan to steer business growth and impact.

All these trends are relevant and noteworthy, and businesses should pay attention over the next five years. However, the continuation of geopolitical conflicts and trade wars might jeopardize collaboration on related areas, especially stability of the supply chain when it's related to critical materials and output. It will require strong leadership from all sectors to steer these new opportunities and achieve win-win solutions for all. 

Watch this space for more as we unpack the changes, related risks, and opportunities that China’s 14th Five Year Plan will bring. BSR will continue to work on this with more in-depth research to each of the topics and their impacts on industries. Engage with us to inform your understanding and develop your China strategy.

Blog | Tuesday March 2, 2021

Beyond Former User @realdonaldtrump: A Human Rights-Based Approach to Content Governance

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The recent action taken by social media companies against former user @realDonaldTrump following the insurrection at the Capitol sparked a fierce debate.

For some, the decisions were a legitimate, necessary, and proportionate response to the obvious incitement of violence and insurrection: a new line had been crossed, and tough action was merited.

For others, this action came too late—the damage had already been done, and the lack of action against previous transgressions (such as quoting “when the looting starts, the shooting starts”) had allowed users to push the boundaries of online speech too far, for too long.

For others still, the decisions were a problematic infringement on the right to freedom of expression and a step too far for companies to take.

A debate raged on about whether and how democratically elected leaders should be treated differently online. For some, the public has a right to hear from their elected officials, no matter how objectionable the message; for others, elected officials should be afforded less freedom when incitement to violence is at stake, owing to the substantial influence that the speaker has with the audience and increased risk of harm.

These are real dilemmas with potentially conflicting rights at stake, such as freedom of expression, public safety, and the right to participate in government. There are no simple solutions (if you think there are, here is a reading list) and we have nothing but admiration for those inside social media companies genuinely seeking to take principled approaches to resolve these dilemmas. It is not an easy task, and it's one where no good deed goes unpunished.

BSR’s engagement in this dialogue has focused on how social media companies can apply a human rights-based approach to the challenge of online speech. In other words, how should a company’s responsibility to respect human rights according to the United Nations Guiding Principles on Business and Human Rights (UNGPs) manifest itself in the context of content governance?

With this objective in mind, we are publishing a short paper today setting out a four-part approach to human rights and content governance, based on a combination of the UNGPs and the various human rights principles, standards, and methodologies upon which the UNGPs were built. These four parts are as follows:

• Content policy—statements about what is and is not allowed on a social media platform should encompass all human rights, be founded upon human rights standards and instruments, and draw upon engagement with affected stakeholders.
• Content policy implementation—given the challenges of enormous scale and rapid speed, companies should prioritize implementation based on the severity of human rights risk (globally, not limited to the United States), understand the link between online content and offline harm in the relevant local context, and provide effective remedy when mistakes are made.
• Product development—the features, services, and functionalities of social media platforms are constantly evolving, and it is important that potential human rights impacts are assessed during the development and deployment process, especially for high-risk and conflict-affected markets.
• Tracking and transparency—companies should maintain quantitative and qualitative indicators of the effectiveness of their approach and be transparent about the rationale for important content decisions, with reference to relevant human rights considerations.

There are two important features to highlight about this approach.

First, these four parts constitute a robust framework of ongoing human rights due diligence that enable content decisions to be made thoughtfully, deliberately, and grounded in rights-based analysis, rather than “on the go” or according to the whim of the moment. They emphasize that the process matters as much as the decision itself—that while different people or companies may reach different decisions, these decisions should be intellectually consistent, defensible on human rights grounds, and conveyed transparently.

Second, these four parts encompass more than simply what content is and is not allowed on a platform. Our approach assumes that international human rights law and the UNGPs provide an overall framework for principled decision making and action, not a “copy and paste” set of content rules for companies to follow. The four parts are intended to be considered as a package and enable companies to adapt as the reality of social media use unfolds.

One of the concerns most frequently expressed over recent weeks has been the unease that companies have so much power—with some arguing that decisions about content should be a role for governments, not companies.

However, there are three reasons why we believe companies should play a role in content governance and thus why setting out a company-based human rights-based approach to content governance remains essential.

First, many of the most significant public policy proposals on content governance—such as the U.K. Online Harms White Paper, the EU Digital Services Act, and proposals to reform U.S. Section 230—envision a very important role for companies taking responsibility for harm associated with content on their platforms.

Second, these public policy proposals relate to specific jurisdictions, whereas the internet is global. Human rights-based approaches enable consistent approaches to be taken across international borders, including jurisdictions where laws and regulations conflict with international rights standards. Indeed, a global approach based upon international human rights standards provide a strong foundation to push back against governments seeking to suppress freedom of expression and other rights.

Third, the UNGPs state that companies have a responsibility to address the adverse human rights impacts with which they are involved. User-generated content clearly has a connection to adverse human rights impacts, and therefore a human rights-based approach to content governance is essential to meet the responsibility of companies to address this connection.

Indeed, the most promising near-term contribution to dilemmas relating to @realDonaldTrump won’t come from government, but from the independent Facebook Oversight Board, which is due to review the former user’s suspension from the platform.

We hope that this paper provides a useful contribution for how respecting human rights and implementing the UNGPs can provide a foundation for this infrastructure, and we welcome comments to amend, improve, and build on this approach.

Blog | Monday March 1, 2021

Three Ways to Improve Supply Chain Sustainability in the Decisive Decade

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2020 began with companies making new commitments to sustainability, looking to do their part to achieve the SDGs and the goals of the Paris Agreement over the course of the Decisive Decade. Then, we found ourselves in the throes of the COVID-19 pandemic, government lockdowns, and the resulting economic downturn.

Over the past year, business learned the hard way how vulnerable it is to unexpected crisis, particularly with regard to global supply chains. COVID-19 provided a wake-up call to companies about how opaque the global supply chain is.

It is now clearer than ever that we need a global supply chain model that is more transparent, more resilient, more responsible, and more sustainable. This is no longer just a strategy for companies to consider—it has become a business imperative.

Unfortunately, there are no obvious and easy solutions available. The existing commodity market has been designed to provide high-quality goods, but it has the downside of price volatility and a lack of transparency. Companies will need to experiment with creative and innovative approaches in order to find an alternative way to maintain business growth while obtaining the necessary transparency and becoming more resilient. Here are three fundamental steps for improving supply chain sustainability:

1. Set Goals and Create an Operational Roadmap

Over the years, we have witnessed an increasing number of entities make ambitious commitments to sustainability. This includes commitments related to climate and the environment (such as Science Based Targets, Net Zero Targets, Zero Deforestation, 100% of Recycled Plastic, and Science Based Targets for Nature) as well as those related to human rights and worker well-being (such as no child labor, no forced labor, and living wage).

It is not only the big brands making such commitments: Entities across all tiers of the supply chain, including retailers and fast-moving consumer goods (FMCGs) to upstream producers as well as intermediary processors and traders, are making these commitments as well. And yet only a few organizations are providing clear operational roadmaps and implementation frameworks to achieve their specific commitments.

Achieving long-term targets requires deep understanding of the issues, needs, and constraints in specific supply chains and across multiple tiers, as well as the ability to translate this assessment into operational actions that companies can take individually and collectively.

An operational roadmap would demonstrate that commitments and policies are taken seriously, based on ambitious but achievable targets. The operational roadmap should include short-, mid-, and long-term milestones and targets, as well as a strong and transparent monitoring process and regular reporting.

Goal-setting and developing an operational roadmap will start a process of creating a sustainable supply chain strategy that will both lead to secure long-term economic value and ensuring positive outcomes for the environment and people. There is always potential for failure when experimenting with how to operationalize a plan to achieve your sustainability goals; however, it’s important to remember that this will help to obtain more clarity on what does not work at the current stage, why, and then figuring out what needs to be improved.

2. Drive Collective Action

The global supply chain is a complex network involving a lot of players, tiers, regions, and issues. All players involved have a role to play and a voice to raise, their own constraints to deal with, and potential to be part of the solution.

A single entity—company, supplier, or manufacturer—on its own cannot impose its vision on the overall network anymore. Approaches like supply chain risk assessments, materiality assessments, due diligence, and supplier ranking systems must be addressed collectively and not imposed by one single player—with its own vision and definitions—upon others in the value chain.

In the effort to create supply chain sustainability and transparency, companies should ensure a common understanding of the issues and constraints, as well as the potential solutions any player at any tier can bring. To address specific issues linked to specific, individual supply chains and to be efficient and successful, all players involved at all tiers need to speak a common language.

As an example, BSR’s supply chain collaboration Action for Sustainable Derivatives (ASD) is designed to bring together value chain actors facing similar challenges to collectively drive change across the palm derivative supply chain. As a collaborative effort, ASD members can use the combined leverage of their procurement influence and spend to create meaningful action. New collaboration models are one of the key success factors of supply chain sustainability and long-term business resilience.

3. Revamp the Business Model

For any company to successfully achieve its high-level sustainability commitments, be it Science Based Targets, no deforestation, or no forced labor, it must move away from the model of the traditional commodity market. This existing model allows for the trade of commodities globally at the most efficient price, but most of the time, it comes at the cost of resilience.

Indeed, this commodity market brings a lot of opacity to global supply chains. This trading approach, where companies are unable to see beyond Tier One suppliers, makes it nearly impossible to obtain transparency on all the players involved in the supply chain and all the sourcing regions and; as such, gain accurate understanding of the risks.

This is why a new business model for our global commodity market must be developed and promoted, one that remains market driven while being fair, more transparent, and can provide more resilience. We need a business model that will help to create progress to address the critical issues that global supply chains are exposed to. However, it’s important to note that this business model can only be proposed, developed, piloted, and scaled through a collaborative approach involving representatives from all tiers of the value chain, including upstream producers or extractors, intermediary processors, FMCGs, retailers, consumers, traders, and financial institutions.

BSR works with our member companies and stakeholders across all tiers of the supply chain to support the implementation of these three imperatives in order to achieve climate, environment, and social commitments as well as broader supply chain resilience. To learn more about our work on supply chain sustainability, transparency, and resilience, please reach out to connect with the team.