Blog | Thursday June 9, 2022

Beyond Audits: Six Ways to Manage Human Rights Risks in Supply Chains

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According to the UN Guiding Principles on Business and Human Rights (UNGPs), companies are responsible for conducting human rights due diligence to manage the most salient human rights risks across their operations and supply chains. To assess workplace conditions like forced labor, child labor, low wages, discrimination, and harassment, for example, companies have historically relied on social audits from their Tier 1 suppliers. However, since the Tazreen Garment Factory and Rana Plaza tragedies in Bangladesh, social audits are increasingly scrutinized. Companies are now expected to go “beyond” auditing by adopting more robust approaches to address human rights violations in their supply chain.

Often treated as a “pass/fail” compliance exercise, traditional social audits aim to capture information within a limited timeframe and involve little effort to understand systemic issues or plans for ongoing supplier engagement. “Beyond audit” approaches, on the other hand, seek to engage suppliers through training and capacity building, integrating worker voices, strengthening management and governance systems, and driving greater transparency.

While many recognize the need for a systemic shift away from audits, there is no easy alternative. Below are six points for companies to consider when addressing human rights risks through a holistic approach: 

1. Investment in Governance Structure

Audits are typically managed by third parties, whereas “beyond” audits call for companies to invest in internal governance models to oversee human rights due diligence. An effective “beyond” audit governance structure involves coordination with the procurement team and the implementation of a Supplier Code of Conduct, which requires suppliers to execute their own human rights-related policies. It is essential to develop a strategy that is based on the company’s specific industry context and operations. One example of this is hiring regionally placed, in-market employees, who have a better understanding of local contexts, to oversee supplier relationships.

2. Collaborative Stakeholder Engagement

Partnering with suppliers to understand their challenges, identify solutions, and develop shared commitments has a longer-lasting impact than standalone audits. Forums and stakeholder engagement tools, such as mobile technologies that allow anonymous feedback from workers, can connect buyer companies, suppliers, workers, communities, and governments to increase visibility into supply chains. On-the-ground, direct engagement with suppliers through on-site visits helps companies identify risks and develop culturally and context-relevant programs in collaboration with suppliers. For example, companies can facilitate greater communication between supplier sites and proximal communities to help to foster trust and ongoing engagement.

3. Inclusion and Enforcement of Standards

Aligning human rights policies with international standards, integrating them into supply chain management, and holding suppliers accountable is critical. International human rights standards, such as freedom from slavery or servitude, the right to effective remedy, and the right to freedom of opinion and expression, should be fully embedded into procurement processes. Adherence to these standards should be incorporated into the evaluation of supplier performance and purchasing decisions. Concurrently, buying teams should be trained in responsible buying practices to mitigate the risks often caused from unrealistic deadlines and squeezed prices. Companies should determine the appropriate strategy for termination or remediation of suppliers based on their supplier base. For example, some companies may avoid terminating contracts when violations occur because of limited access to more suppliers, while others may focus instead on remediation and improvement programs.

4. Capacity Building and Incentives

Companies are increasingly investing in capacity building and supplier incentives. These initiatives facilitate knowledge exchange, provide access to tools, and empower suppliers to take ownership of systemic issues and challenges. 

Leading companies also recognize that the most effective remediation strategy includes in-person trainings and hands-on support to strengthen management systems. This approach, unfortunately, has not been possible of late due to the COVID-19 pandemic, driving companies to turn to online engagement and multilingual e-learning programs. The uptake of online trainings has been a hurdle, which is why targeted trainings and incentives, such as preferred contracting terms, are essential. 

5. Supplier Portals and Grievance Mechanisms

Supplier portals are online platforms that serve as a one-stop shop for suppliers to access codes of conduct, supplier documentation, grievance mechanisms, capacity building tools and trainings. Requiring business partners to register their supply sites on such a platform can improve adherence to human rights principles and streamline monitoring. 

These portals have also been where grievance mechanisms are offered to suppliers and their employees. Ensuring that workers in the supply chain have access to a confidential and anonymous grievance mechanism is essential to a “beyond” audit approach. However, many companies have shared that their grievance mechanisms are ineffective and not widely used. New models are being developed to address this gap, including on-site and supplier-led grievance mechanisms, as well as whistleblower technologies. 

6. Change Management and Methodology

New technologies are emerging to replace and augment traditional auditing mechanisms. These technologies can increase information flow to consumers, investors, and other stakeholders by employing tools to map supply chains, assess risks, trace products, and act as grievance mechanisms. Some examples include near field communication (NFC) devices, which enable peer-to-peer communication through secure forms of data exchange. Another is blockchain, which operates as a shared ledger to record transactions and track assets in a business network with a decentralized database. Testing these solutions in-house before expanding across the supply chain is best practice. These tools are promising, yet technology cannot address the root of human rights risks without change management at the leadership, buyer, and supplier levels.  

Managing human rights across supply chains continues to be an ongoing challenge for companies across all industries. While social audits are one way to gain insights into working conditions in supply chains; there is mounting evidence of their limitations. To ensure that social audits are effective and meaningful, companies must go beyond the traditional audit approach by embracing these best practices to achieve positive outcomes for workers and communities.

Blog | Wednesday June 8, 2022

How the SEC Can Mandate Climate-Related Disclosures and Drive Corporate Action

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The SEC's proposed rule on the Enhancement and Standardization of Climate-Related Disclosures for Investors is part of a global movement to improve and harmonize climate-related financial disclosures, which support informed investment decisions and incent ambitious action.

The European Union (EU) and other jurisdictions outside the United States (US) are mandating climate disclosure. Over 2600 companies have already committed to similar disclosures, and the world's largest asset managers are demanding them. By codifying a climate-related disclosure rule, the SEC joins a broad network of institutions formalizing the production and publication of the information investors need to make decisions.

This leadership from the world’s largest economy is significant and can help prevent a fractured disclosure landscape for US companies since many will be required to comply with climate reporting mandates in other jurisdictions.

BSR welcomes the proposed rule as a necessary (but not sufficient) feature of regulatory efforts to ensure urgent action by companies and investors to address the climate crisis.

In support of the SEC’s current efforts to react to market demand for comprehensive climate-related financial disclosures, BSR responded to the latest public consultation on climate-related disclosure and encouraged the Commission to publish a final rule that includes the following:

1. Disclosure requirements that are fundamental for effective climate-related decision-making

The final rule should be just as comprehensive as the proposed draft and require disclosure of key climate-related information in financial filings, including companies’ scope 1, 2, and 3 emissions, assurance for scope 1 and 2 emissions, and governance metrics, particularly those that show board-level involvement.

2. Balances prescriptiveness and flexibility that provides clear guidance to report preparers

Greater clarity in a final rule on elements that are currently open to interpretation—and relevant resources that may aid disclosure—will enable companies to comply more easily.

3. Provides additional accommodations for preparers

BSR supports accommodations for preparers included in the proposed rule. The Commission can also consider additional methods of flexibility, such as allowing an extended period of acceptable estimates for scope 3 emissions and clarifying expectations related to re-baselining of goals and targets in line with globally accepted methodologies.

4. Supports ambitious voluntary commitments

Certain provisions of the proposed rule may disincentivize new climate action and target-setting by requiring disclosure only if the company has a plan or target in place. Accordingly, the SEC should consider adopting a “comply or explain” approach for conditional disclosures (e.g., scope 3 emissions, climate-related goals, targets and transition plans, and the use of climate scenario analysis) where companies would either disclose their approach or explain why they do not have one.

We also emphasize the importance of providing companies with a strong liability shield or “safe harbor” for certain disclosures (e.g., climate scenarios analysis) where uncertainty is inherent in the information being reported and where the absence of these protections may have a chilling effect on disclosure.

5. Is harmonized with relevant global reporting standards and requirements from other jurisdictions

BSR supports the important step that the SEC has taken in building its proposed rule upon broadly accepted reporting frameworks. Accordingly, the SEC should allow the use of alternative reporting provisions that are harmonized with criteria developed by the International Sustainability Standards Board (ISSB) to ease the reporting burden on companies that will also be required to report against these provisions in other jurisdictions.

BSR strongly supports the SEC’s decision to require climate-related financial disclosure, acknowledges the merit behind the Commission’s efforts to create a comprehensive yet accommodating proposed rule, and encourages the SEC to issue a final rule that continues to drive alignment in the reporting landscape, leads to improved climate-related risk management and governance, and incentivizes credible climate action.

BSR will continue to engage on this issue, and in ESG reporting more broadly, through our Future of Reporting collaborative initiative. We encourage companies to get involved in the consultation process by showing support for the proposed rule and the SEC’s efforts to harmonize the reporting landscape and highlighting ways the Commission can strengthen the rule for the benefit of all stakeholders.

Blog | Thursday June 2, 2022

Human Rights in the Healthcare Sector: Current State of Play

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The COVID-19 pandemic has placed a spotlight on the pharmaceutical (pharma) industry and its ability to deliver global solutions at speed and in an equitable manner. Regulatory and stakeholder expectations on the corporate duty to respect and manage human rights impacts are rising—and scrutiny on the performance of the healthcare sector is likely to continue.

Healthcare companies have a huge opportunity to improve the health and well-being of individuals and entire societies. However, their activities can also cause harm to the human rights of patients, employees, supply chain workers, and local communities.

Under the UN Guiding Principles on Business and Human Rights (UNGPs), companies have a responsibility to prevent, mitigate, and remedy adverse impacts on people due to their business activities. As explored in previous BSR publications, salient human rights issues in the healthcare sector include ethical standards in research and development (R&D) and clinical trials, affordability, and accessibility of medicines and pharmaceuticals in the environment.

In the past 18 months, BSR has worked with leading healthcare companies to assess the state of play in human rights practices. Based on our analysis, we have developed a maturity curve to chart healthcare companies’ approach to human rights. We have identified four levels of maturity, from reactive compliance to public leadership on the business and human rights agenda.

From our research on the state of play of human rights due diligence in the pharma sector, we have concluded the following:

Healthcare Companies Are Making Progress

Leading pharma companies have made strides in recent years to meet human rights due diligence expectations in line with the UNGPs. Most companies assessed have a defined approach to human rights, with a basic due diligence process in place and dedicated functions working on human rights. Furthermore, it has become common practice for pharma companies to have made commitments to human rights, identify salient human rights issues, and report on their human rights due diligence.

Leading Pharma Companies Have Embedded Human Rights into Business Operations

Leaders in the field are demonstrating a strong level of integration of human rights into their business operations. Industry best practice includes conducting human rights assessments not just at a corporate level, but also a country level (either internally or with support from external consultants), by training internal auditors on human rights requirements to ensure they can support diligence processes and increased transparency on key challenges.

Insufficient Focus on Vulnerable Groups

A common challenge for healthcare companies is the integration of a vulnerable groups lens in their human rights due diligence. Most companies in the healthcare sector fail to identify vulnerable groups—including women, children, and people with disabilities—along with issues that may impact them more significantly. They also fail to identify or provide grievance mechanisms that are adapted to diverse groups.

Healthcare companies can go further to push the boundaries toward the business and human rights agenda. While a handful of companies are strongly aligned with the expectations of the UNGPs, there is scope for pharma companies to set the bar even higher on business and human rights. This includes through public leadership and proactive engagement on salient issues and increased transparency on human rights due diligence. Current and emerging issues for the pharma industry—including access to health, the nexus between climate and health, and bioethics challenges—demand robust human rights practices and industry collaboration.

Blog | Tuesday May 31, 2022

Inequality Has Become an Investor Priority—How Human Rights Advocates Can Respond

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When the European Union embraced the concept of double materiality in the Corporate Sustainability Reporting Directive, mandating that investors consider risks corporations externalize onto people, the business and human rights movement notched a significant win. Now the notion of double materiality is also taking shape in a different guise beyond Europe: in rising investor concerns around systemic risks, including inequality.

Systemic risks are risks that affect the economic system as a whole, creating “systematic portfolio risk” to an investor’s entire portfolio. Large institutional asset owners and asset managers, due to their size, own hundreds, even thousands of different assets. Their portfolios mimic the market and give rise to their status as “universal owners.” These financial players, who collectively own over 40 percent of the market, are less concerned with risks to individual companies than they are with systemic risks to the totality of their holdings. Extreme inequality is a systemic risk, along with climate change and the spread of authoritarianism.

Systems-level investing therefore means that for those who invest across the entire range of the global economic system, considering the impacts of climate or inequality only to the profits of a single company is insufficient to address total portfolio risk. More important are the risks the company poses to people and the planet that affect economic, social, and environmental (ESG) sustainability.

If a company’s operations promote global inequality—for example, by paying poverty wages, denying paid medical leave benefits, relying on zero-hour contracts, and avoiding taxes - they take away from the company’s ability to create value itself and for its investors.

To help investors and regulators address the problem of systemic inequality and its destabilizing economic impacts, a Task Force on Inequality-related Financial Disclosures (TIFD) is being developed , which builds upon existing standard-setting efforts. Inspired by the successful uptake of the Task Force on Climate-related Financial Disclosures (TCFD), TIFD is a systemic risk management framework created through a collaboration among investors, civil society, business, financial regulators, policy makers, and academics to help all market actors know how to reduce inequality created by the private sector. With an eye towards alignment with the Sustainable Development Goals (SDGs), TIFD aims to launch in 2025 with guidance targets, metrics and thresholds for companies and investors to measure and manage their impacts on inequality, as well as inequality’s impacts on company and investor performance. Stakeholders can use TIFD to evaluate the private sector’s performance and hold corporations to account.

While some types of investors may seek quick profits, their ultimate clients are often institutions with longer time horizons and broader goals. Universal owners like large pension funds and sovereign wealth funds, which collectively represent a whopping $33 trillion, tend to have a better eye on systemic risks than their asset managers do. TIFD is well-positioned to engage these ultimate investors at the top of the “capital markets value chain” – the asset owners and allocators – in assessing their long-term investment goals and evaluating how inequality impacts them.

When an asset manager contributes to inequality, or a universal owner like BlackRock or Vanguard is slow to recognize its self-interest in reducing inequality, the trustees of pension and sovereign wealth funds have an interest as fiduciaries for workers and citizens in holding them accountable. Asset owners can influence the behavior of asset managers and companies through engagement, asset allocation, investment structuring, negotiating terms, shareholder resolutions, and votes for board directors. With TIFD in place, asset owners will have the tools to integrate inequality into their goals, incentive structures, and KPIs for asset managers and companies.

Where does human rights fit in? Just as the human rights framework is an essential element to achieving the SDGs, international human rights sits at the core of the TIFD project. TIFD uses the UN Guiding Principles on Business and Human Rights (UNGPs) to define the normative thresholds of the targets and metrics that will be reported by companies so investors will know whether the business is operating within these limits. For example, a living wage indicator could serve as a threshold for inequality when measured over a period of years and paired with other indicators such as income inequality within the firm and union density and collective bargaining coverage.

The judges of whether or not company impacts have exceeded human rights thresholds are rightsholders themselves. When human rights are upheld and businesses operate with respect for social foundations and ecological boundaries, they create value for society and ultimately for investors.

This is why the TIFD process must engage with rightsholders. Most disclosure frameworks are devised by a select group of technocrats in the Global North, but technocrats are not well positioned to fully grasp inequality and its root causes. To be effective and legitimate, it is those who experience inequality who need to be at the table to define it. TIFD will convene thematic working groups in which this diverse coalition of stakeholders will synthesize empirical evidence about the root causes of inequality with existing corporate and investor disclosure and risk management frameworks, fill gaps, and draw upon that work to define metrics, targets, and thresholds.

“Inside-out” risks – the risks that companies pose to socio-economic equality and human rights—are a matter of investor interest. Even when looked at from the point of view of investor interest, therefore, double materiality is a no-brainer.

Written by Joanne Bauer and Paul Rissman, CoFounders of Rights CoLab. Rights CoLab is a member of the Interim Secretariat of TIFD, along with RACI (Argentina), Predistribution Initiative, and Southern Center for Inequality Studies (SCIS) at University of Witwatersrand. Originally published on the Business & Human Rights Resource Centre website.

Primers | Thursday May 26, 2022

10 Human Rights Priorities for the Industrial Manufacturing Sector

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Human rights are inherent to all human beings. They are defined and established in more than 80 international legal instruments and define the fundamental protections of human dignity, needs, and freedoms, such as food, housing, privacy, personal security, and democratic participation. Since the adoption of the Universal Declaration of Human Rights (UDHR) in 1948, the responsibility to protect human rights has primarily fallen on governments. Beginning in the early 2000s, however, it became increasingly clear that the freedoms enshrined in the framework could also be violated—and promoted—by the private sector.

In 2011, the UN Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights (UNGPs), the first international instrument to assign companies the responsibility to respect human rights.

The UNGPs state that companies must refrain from negatively impacting rights even when governments are failing to create or enforce necessary laws and that victims of corporate abuses must have access to effective remedy.

As part of this responsibility, the UNGPs require companies to actively identify and manage the negative human rights impacts that they may cause directly and those to which they contribute through their business practices and relationships. There are several key actions a company can take as part of this due diligence cycle:

• Conduct a human rights assessment to determine which potential human rights impacts are most salient to their business
• Develop a human rights policy to communicate expectations to stakeholders and business partners
• Ensure there is a robust stakeholder engagement process in place to support ongoing monitoring of potential or actual impacts and drive proactive action or remedy

The actions of businesses can affect people's enjoyment of their human rights both positively and negatively. However, it is important that the priority for any business is to avoid, mitigate, and remedy its contribution to potential negative impacts.

Blog | Wednesday May 25, 2022

Addressing Human Rights Risks in Renewable Energy Supply Chains

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The renewable energy sector faces a monumental task: power the transition to clean energy economies needed to stem the tide of climate change, while ensuring the move is just, inclusive, and protective of both people and planet.

Investment in renewable energy is rapidly accelerating, as companies compete to produce the technology needed to support the energy transition. There is a growing demand for the minerals that are needed to produce green energy technologies (EVs, solar panels, wind turbines, etc.). According to the World Bank, the production of minerals such as graphite, lithium, cobalt, and others, could increase by nearly 500 percent by 2050 to meet global demand.

The extraction of these minerals, however, is often associated with adverse human rights impacts, including land grabs, dangerous working conditions, and harm to Indigenous Peoples. In addition, public scrutiny of company social and environmental practices is growing, and stakeholders are increasingly holding companies accountable for adverse consequences of renewable energy projects. These impacts are likely to get worse given the rapid deployment of these projects to meet climate targets.

It is crucial for companies along the mineral supply chain to identify, prevent, and mitigate human rights risks. However, complex renewable energy supply chains mean companies have limited visibility into the impacts of mining, undermining their ability to prevent and mitigate harm and exposing them to operational, financial, and legal risks.

BSR’s work with energy and extractive companies—including a recent assessment of the human rights risks associated with minerals used in wind, solar, battery, and electrolyzer technology—has surfaced two key strategies for strengthening the management of human rights risks in transition mineral supply chains.

Adopt Comprehensive Human Rights Due Diligence (HRDD) Practices

Context-specific information around the human rights risks of specific minerals may be unavailable, hard to verify, and inconsistent. Further, a lack of data on some minerals poses significant challenges for human rights assessments. While research reports often surface critical information around certain issues (e.g. child labor in cobalt mining in the Democratic Republic of the Congo), they can also skew industry attention toward certain minerals and geographies when there may be other impacts that are just as severe but are simply less well known.

With this backdrop, the renewable energy sector can adopt comprehensive HRDD practices to further understand risks, and shape the human rights risk profile of each raw material and sourcing location, and advance research into less understood materials (e.g. vanadium and indium).

• Strengthening HRDD practices: Companies can carry out HRDD along their value chain, collaborating with business partners and local stakeholders to align expectations and to develop, implement, and verify proactive measures to prevent and mitigate human rights impacts.
• Partnering with mining companies: Companies can partner with their suppliers to drive respect for human rights. Mineral end-users are entering into supply agreements directly with mining companies, which not only serve a commercial benefit, but also increases the visibility and engagement with companies throughout the value chain to uphold sustainability expectations (e.g. Tesla entered nickel supply agreements with Talon Metals, BHP, and others to secure key metal sourcing, while promoting environmentally friendly sourcing).
• Engaging suppliers: End users can work closely with suppliers to strengthen due diligence efforts and improve capabilities to trace materials down the value chain by raising supplier awareness of social and environmental expectations, integrating sustainability metrics into supplier contracts, and asking mining companies to undertake sustainability audits to verify their practices (e.g. aligning with IRMA).
• Disclosing progress: End users can disclose information around who their suppliers are, material sourcing locations, and actions taken to mitigate risks.
• Understanding local contexts: No longer reliant on publicly available reporting, companies are taking more proactive approaches to understand impacts at the local level across their supply chains. Efforts include partnering with peers, civil society, and NGOs to implement independent studies to assess issues and impacts at key sourcing locations.
• Increasing traceability of mineral sourcing: Companies can increase the traceability of mineral sourcing across the value chain by using blockchain technology.

Invest in Circular Economy Solutions

Many companies are looking to invest in circular economy solutions to address the growing dependency on key minerals and alleviate the adverse impacts associated with their extraction, including:

• Promoting recycling: Companies are integrating circular thinking into their business strategies and encouraging mineral recycling to reduce primary sourcing and promote environmental stewardship and respect for human rights in the supply chain. Companies that decrease primary sourcing today will be better placed to meet future regulations that require the use of secondary sourced metals (e.g. emerging EU regulation around battery production).
• Exploring alternatives in sourcing: Companies are exploring alternative sourcing locations, including local and closed-loop supply chains, and innovative technology solutions when making sourcing decisions for their renewable energy technologies. Alternatives can decrease the need for primary sourced minerals and increase a company’s control over the supply chain. One example is the allocation of US$18 million by the US Department of Energy for projects to develop ways to extract rare earths and other minerals from coal waste and coal ash sites. This would bring job opportunities for struggling coal communities, while incentivizing circular initiatives for key minerals.

While recycling and circular production can reduce primary sourcing and alleviate the adverse impacts of mining, it is unlikely to be enough to sustain demand. Efforts to ensure safe and respectful mining practices should always form part of a company’s approach to preventing and mitigating human rights harm.

Addressing human rights risks requires systemic change, both in corporate practice and business operations. By strengthening a company’s human rights due diligence processes, widening the scope of engagement on human rights issues, and implementing innovative approaches to responsible sourcing, companies can gain greater insights into their human rights impacts, make informed decisions about how to prevent and mitigate harm, and effect real change to ensure that their participation in the energy transition is respectful of human rights. 

Special thanks to Roberta Pinamonti for her valuable feedback and dialogue on this blog.

Blog | Tuesday May 24, 2022

Inside BSR: Q&A with Cecilie Jørgensen

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Inside BSR is our monthly series featuring BSR team members from around the world.

This month, we connected with Cecilie Jørgensen, a Manager based in Copenhagen.

Tell us a bit about your background. Where are you from, and where are you based? What does a day in your life look like?

I am Danish and grew up in a city in Jutland, the Peninsula connected to Germany.

Last year, my partner and I decided, like so many others, to move out of the city. We bought a small house in a city outside of Copenhagen, in which we spend a lot of time renovating and raising our puppy, Nutella. In fact, Nutella is the BSR Copenhagen office dog, and her main responsibility is to get as many cuddles as possible. She is stellar in this kind of project work!

I have been fortunate enough to have good working-from-home flex options, so after moving out of Copenhagen, I work regularly from home 2-3 times a week. A typical day often consists of quality time with Nutella and my partner or colleagues and friends. I also enjoy playing basketball and exercising.

How did you first get involved in sustainable business? How long have you been at BSR? What is your current role, and what does that entail?

My family and friends know me as a tireless feminist. So, it did not come as a surprise to them when I chose to study Diversity and Change Management at Copenhagen Business School. I joined BSR in 2018 as an intern, and I was immediately brought into multiple projects, most of them with a focus on social impact.

It has been almost four years since I started at BSR, and I recently got promoted to a Manager role in our Equity, Inclusion and Justice (EIJ) team. Most of my work is centered around EIJ and social impact, but I do occasionally support projects in other areas of expertise, such as human rights and supply chains. I am currently working on developing a “glocal” economic empowerment strategy for a large global company. This is a particularly interesting project due to the many challenges that can arise when a global company must take cultural and legal contexts of different operating countries and allow for flexibility. Although I am working with companies across the world, I’m also often engaging with our Nordic members on EIJ issues specific to the region, which I truly enjoy as it feels like you become an extended part of their teams!

I like to say that I have “many hats” at BSR. Besides the project work on EIJ with our members, I also have the “hat” of being the Associate and Copenhagen Representative in our People Council. The People Council is one of BSR’s governing bodies with representation across geographies and cohorts: it makes people decisions related to processes and priorities impacting our global team.

I was appointed in February 2021 and have continued to build an Associate community within BSR, where open and honest communication are encouraged. I spend a lot of time connecting with our amazing Associates across all our offices to hear from them firsthand what they enjoy about their work and how we as BSR can improve as an organization. Creating a culture of belonging by ensuring people’s voices are heard—whether at BSR or through projects with members—is what really drives me in my work.

What are some interesting projects that you get to work on as part of your role at BSR? What do you enjoy about them?

One of my first projects at BSR was to support the Global Impact Sourcing Coalition (GISC). Since then, I have been closely involved with BSR’s work on social impact in the supply chains, and most recently I have been part of the project team on Keeping Workers in the Loop. Other than that, I work on a variety of projects closely connected to this topic, and EIJ in general, but often with a focus on gender.

I really enjoy engaging with members who are just as passionate about these topics as we are. Trying to help them navigate these challenging issues and ensuring they have the right conditions for creating the change needed internally is one of the best parts of my work.

What are you looking forward to in 2022?

I am truly looking forward to meeting my colleagues from around the world at our BSR All-Staff Retreat! Although I’ve worked at BSR for nearly four years, I still have not met many of my colleagues in person, even though we may work together on a daily basis (and I think we all agree by now that Zoom fatigue is real).

Lastly, I am getting married to my partner in May as well—and Nutella is of course attending the wedding!

Blog | Thursday May 19, 2022

Transform to Net Zero: The Case for Circular Chemistry

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The Intergovernmental Panel on Climate Change (IPCC)’s recent review of the latest climate science made for an uncomfortable and alarming read.

Despite national climate pledges, we still urgently need to limit the global temperature rise to 1.5°C. This requires an immediate peak in global greenhouse gas emissions and a reduction of 43 percent this decade.

The next few years are critical for the future of humanity. While a growing number of businesses have targets in place to reduce their energy dependence and switch to clean energy sources, there is a blind spot in the race to zero: embedded carbon.

A Hidden Cause of Climate Change

The chemical industry is one of the largest industrial energy users in the world. It is also the backbone of modern manufacturing; from clothing to technology to household products to construction, most businesses rely on chemical feedstocks in some form.

Even with a boom of supply of renewable energy to power its operations, the chemical industry is still heavily reliant on fossil feedstocks to make chemicals, with currently 85 percent derived from fossil resources. Global demand for products made with oil currently amounts to 450 megatons of embedded carbon per year, which will end up in the atmosphere as CO₂ in one way or another, either through incineration or (bio)degradation.

The Future is Circular Chemistry

As one of the world’s largest cleaning and laundry businesses and big user of chemicals, this is a major challenge at Unilever that we need to address. After we evaluated the full life cycle of our products, we found that 51 percent of life cycle emissions were related to the raw materials we use. That’s why we published our Clean Future strategy in 2020, in which we pledged to eliminate virgin fossil-derived chemicals from our formulations, a move which we estimate will reduce our product emissions—arguably the hardest to abate—by up to 20 percent.

Because chemicals are made of carbon, we can’t decarbonize our formulations completely. Instead, we must find alternative sources of carbon that are already available above the ground to keep it in circularity. We call this the Carbon Rainbow.

You can’t make cleaning products without chemicals, but you can make chemicals without fossil fuels. That’s exactly what Unilever is striving to do, as we work toward our goals of halving the full value chain emissions of our products per consumer use by 2030 and reaching net zero across our value chain by 2039.

The Road to a Cleaner Future for All

The transformation ahead is by no means small, but our recent launches show what can be done. Here are four key learnings from our journey so far:

1. Map the full life cycle of your emissions, not just up until point of sale. The end-of-life emissions, notably from the embedded carbon you have used, must be accounted for. Once you have the full analysis, you can determine the areas where you have control and can make changes (i.e., product development) and those where you need to work with your suppliers and others.
2. Integrate your sustainability and business strategies. It’s no longer just a moral objective—it’s essential to future-proof your business. Record-high crude oil and gas prices show we can no longer be so heavily reliant on the use of virgin fossil chemicals. Instead, we need to diversify non-fossil carbon feedstocks and create agile supply chains of the future.
3. Bring your consumers on the journey. A challenge we have faced is how we “sell” recycled carbon to consumers. It’s a marketing conundrum, particularly as many consumers don’t connect the use of fossil carbon with everyday goods. Our learning was to keep it simple and focus on what adds value to consumers life rather than pushing complex sustainability messages.  
4. Finally, as with any transformation, we must all work together—chemical users in driving the scale and demand, chemical producers in trialing alternative feedstocks, policy makers in creating an enabling environment, and consumers in making responsible purchasing choices.

Download Innovating Net Zero Products and Services, a Transform to Net Zero Transformation Guide, to learn more.

Blog | Tuesday May 17, 2022

Harnessing the Power of Data to Combat Human Trafficking

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Last week, Tech Against Trafficking (TAT) brought together technologists, nonprofits, academics, governments, and policy-makers from 60 countries in a virtual event to celebrate the close of its second Accelerator and discuss how tech advancements can be used to combat human trafficking.

Launched in 2019, the TAT Accelerator Program aims to identify promising uses of technology in the anti-trafficking field, harnessing the expertise and resources of member companies to advance and scale the work of organizations deploying technology that assists victims, law enforcement, business, and civil society.

“The gaps in partnerships are highlighted in many tech solutions. So many people talk about tech solutions for case management, for supply chains, but we’re not asking, ‘what have we done with what was developed yesterday? How can we build on each other’s invention?’ If we don’t figure out this partnership piece, we’re going to spend a lot of resources because tech solutions are not cheap.”

–Sophie Otiende, CEO, of the Global Fund to End Modern Slavery (GFEMS)

Tech Against Trafficking welcomed two new organizations to the program over the course of 2021-2022: The Lantern Project and Unseen UK.

The Lantern Project is dedicated to combating sex trafficking. Its online platform “Freedom Signal” enables anti-trafficking organizations that provide assistance to victims of trafficking to send targeted outreach to individuals who are advertised for sexual services online. In the Accelerator, TAT supported the Lantern Project to develop a go-to-market strategy for “Freedom Signal” and improve its victim identification process.

Unseen runs the Modern Slavery & Exploitation Helpline in the UK. TAT helped Unseen design a new data management platform that generates insights from case data, improved its process that matches cases to supply chain data, and developed a marketing strategy for its Business Portal, which helps businesses identify cases of human trafficking across their supply chains.

Making Sense of Human Trafficking Data

TAT supported both organizations in optimizing their data infrastructure and making sense of the human trafficking data they collect. In both cases, data was extracted and analyzed in a cloud environment hosted by Amazon Web Services. Leveraging technologies developed in the previous TAT Accelerator in partnership with the Counter-Trafficking Data Collaborative, the organizations created synthetic datasets from the human trafficking data they collect to share data responsibly and by preserving the privacy of victims. Dynamic graph technology developed by Microsoft Research was applied to these anonymized datasets, allowing the organizations identify patterns and generate insights. In turn, this will help the organizations improve operational efficiency and provide more effective services to reduce human trafficking.

“Unfortunately, there are still too many data silos, and the understanding of the issue is still limited. Data is powerful, but it’s only powerful if you do something useful with it, like the Lantern Project, like Unseen. We’ve been so delighted with the TAT Accelerator program to maximize the potential of our rich data, and all I can do is hope that others catch up with us in due course.”

–Justine Currell, Unseen UK

The Lantern Project’s “Freedom Signal” platform helps service providers identify potential victims of sex trafficking, by scraping online ads and making connections between these ads based on the phone numbers found in them. By applying dynamic graph technology, Freedom Signal can detect anomalies in the data that might represent automated spam, trafficking rings, and other schemes.

The image above shows a cluster of related phone numbers (yellow) connected by different ads (green) across many states (plum). A single email address (blue) is associated with most of these phone numbers. This cluster displayed anomalous behavior because of how the relationships between contact details (phone numbers, email addresses) and victim characteristics (state, age, orientation) vary over time. This means that these contact details are unlikely to represent individuals who might benefit from outreach. 

Unseen collects large amounts of data through their helpline that relates to specific cases of human trafficking. By applying dynamic graph technology, they can see how clusters of similar cases emerge over time (e.g., similar exploitation type, victim demographics, police force region). Understanding the different types of cases represented by these clusters allows for more informed decisions and targeted interventions.

The image above shows helpline cases (colored points) clustered by their connection to different case attributes over time. A single cluster of cases (cluster 333) is selected, with the attributes and time periods of cases in this cluster shown for reference. It is possible to see clear structure in the case data even though the attribute values themselves are anonymized.

“I’ve seen great initiatives that are utilizing data well but increasing the utility of data can bring risk if we’re not careful. During the process with TAT, at least half the time was spent working out how to interoperate with engineers, and how to implement safeguards on sharing data.”

–Phil Bennett, Technology Consultant

Looking Forward

As we conclude the second TAT Accelerator, we are excited to support the application of this work in the broader anti-trafficking field through collaboration with companies, civil society, law enforcement, academia, technologists, and survivors.

We are delighted to announce that TAT will launch its third Accelerator in September 2022 with a new cohort of participants. Anti-human trafficking organizations are invited to apply by filling out the application form until July 1, 2022.

TAT continues to recruit new members and partners to help provide greater support to anti-trafficking organizations and generate a wider impact in the anti-trafficking field. We invite all companies and anti-human trafficking organizations who are interested in being part of this to contact us to find out how to get involved.

Blog | Thursday May 12, 2022

Advancing Human Rights in the SaaS Sector

Preview

Cloud computing has revolutionized the IT industry over the last two decades. As the largest segment of the cloud computing market, software-as-a-service (SaaS) has played a large role in this transformation. Businesses can use packaged software to address a range of solutions, from customer relationship management and cross-team collaboration to industry-specific applications such as electronic record management systems for healthcare, production scheduling software for manufacturing, and learning management systems for schools.

The SaaS model enables easier access to software for businesses of all sizes. Small and medium enterprises that were previously unable to access or afford advanced technology can now benefit from the latest technological advancements.

However, the proliferation of such technologies comes with ethics considerations and human rights responsibilities. Cases such as internet infrastructure companies removing extremist websites like “The Daily Stormer” from their services or CRM providers facing accusations of facilitating human trafficking show how B2B companies are increasingly confronted with the possibility that their products, services, and platforms may be misused or abused in ways that lead to harm.

During 2021, BSR worked with a group of SaaS companies to develop an approach to responsible product use. While it was clear that SaaS providers have a responsibility to address the harms associated with their products and services, there was a need for a deeper understanding of how their services can impact human rights and the appropriate actions that they can take to address these impacts.

To further explore the human rights impacts, we have subsequently worked with a group of SaaS companies to conduct a sector-wide human rights assessment of the SaaS sector focused on the use of B2B services and are publishing the report today. This assessment identifies the SaaS sector’s salient human rights risks and outlines ways in which SaaS providers may impact human rights—as individual companies, as a group of companies, or as a sector.

The Challenge of Size and Variability

Undertaking a sector-wide human rights assessment of the SaaS sector proved challenging due to the size and variability of the sector. As of 2021, there were approximately 15,000 SaaS companies in the US alone, addressing an infinite number of business needs. As such, we did not attempt to assess the potential impacts of every single type of SaaS service. Instead, we identified several differentiating characteristics related to the functionality and deployment of SaaS services that may surface various human rights issues and provide different degrees of leverage to address them.

For example, the level of customizability of a SaaS service may surface different implications for human rights. Highly customizable SaaS services make potential harms less foreseeable by SaaS companies since customers can change the services’ functionality and outcomes, which may also result in less (or different) leverage available to the SaaS company to address the harm. Identifying these differentiating characteristics helped us unpack company, cumulative, and sector-level strategies to address adverse impacts.

Limited Insight into End-Use

The most important considerations in evaluating the potential human rights impact of SaaS services are who uses the service and how it is used. For example, a company may use 3D modeling software to create illegal weapons, or a team collaboration software may be deployed by a company to monitor their employees. However, a common theme that emerged during BSR’s engagement with SaaS providers was that they often have little insight into how customers use their services—for example, for reasons of privacy-posing challenges to identifying downstream human rights impacts.  

Appropriate Action to Address Human Rights Impacts

This assessment takes a first step in identifying the human rights impacts of SaaS providers–both individually and as a sector—and appropriate action to address these impacts. We hope it will help provide guidance for SaaS companies seeking to implement their human rights commitments.

SaaS providers can take action by defining what customers and users can and cannot do with their services, establishing technical limitations to service functionality, communicating the limitations or potential risks of the service, and collaborating with other companies to share insights and establish best practices.   

The SaaS model has leveled the playing field for businesses and enabled access to technological advancements at a previously unimaginable scale. B2B SaaS services have tremendous potential to assist the realization of human rights. However, SaaS companies may be connected to harms and have a responsibility to establish appropriate measures to address these harms.

BSR’s report explores how the SaaS sector can both address human rights risks and pursue opportunities that promote the realization, enjoyment, and fulfillment of human rights for their individual services and the sector as a whole.