Blog | Thursday October 20, 2022

Building Competent Boards: ESG Not about “Skills-Washing”

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In July 2022, I had the pleasure of interviewing Helle Bank Jorgensen, CEO and Founder of Competent Boards at BSR’s Future of Reporting Workshop. Helle and I previously spent a few years as advisory board members to Ethical Corp (now Reuters Sustainability) when she invited me to join her Competent Boards program during a Responsible Business awards ceremony in London in 2019.

Some years later, as part of our BSR Future of Reporting workshop on Boards and Regulation this past July, Helle shared with our 70+ members her experience since the founding of Competent Boards in 2019, with insights on who is seeking board training, what type of training, and what’s next for the evolution of boards.

Here are the key takeaways from our discussion:

1. ESG training is not about “skills-washing”—boards now have a duty of care in the new regulatory environment.
2. Where previously curious board directors sought training upon recognizing a skills gap, we’re now seeing entire company board cohorts looking to upskill on all issues across ESG.
3. “Luck favors those who come prepared.” There is a changed mindset from "why boards should care" to "how do we care about this." This means going beyond compliance to building long-term value creation
4. Boards need to have the right insights and foresight for resilience in governance.
5. Directors live their values—they must be stewarded and acted upon.

Helle, could you tell us more about Competent Boards?

Competent Boards provides designation and certification programs on ESG and climate for board members and senior business professionals. Boards need to be equipped with knowledge and frameworks that allow them to understand emerging ESG issues and make informed decisions that contribute to the well-being of companies and society. Competent Boards leverages the expertise of over 180 faculty members to equip boards with the knowledge and network needed to succeed.

You launched Competent Boards in 2019 at Davos with astounding success. How have profiles of those who are getting certified evolved over the years?

Before, it was just believers at a personal level who were curious or lifelong learners who joined the program. Now, it is much broader. Professionals today are recognizing their duty and acknowledging the skills gap. ESG training is not about “skills-washing." Directors joining the program want to feel confident that they have the necessary information to anticipate risks and opportunities to the business and how the company can create more value for shareholders and society at large. More and more companies today are therefore asking to work with their entire board instead of just a few individual members. This is a huge mindset shift.

What are boards finding most difficult today in terms of ESG? Is there any one aspect they are struggling with more?

Many board members and professionals today are aware of the climate challenge and need to act in this decisive decade. However, less known and explored–and yet still important in terms of duty of care and duty to act—is human rights. Boards have discovered that this is business too, strategic, often overlooked in terms of major risks, and invisible to hidden risks in supply chains and operations. In Europe, there is now the Corporate Sustainability Due Diligence Directive that changes the game and stipulates a board’s duty to act. Many boards today are not ready for this.

How are questions from board members changing?

The biggest change I’m seeing in terms of board mentality is “why boards should care” to “how can we care about this.” I recently said at a World Economic Forum meeting, “luck favors those who come prepared,” and I firmly stand by this. There is a changed mindset from compliance, to accountability, to long-term governance and value creation, versus passive oversight or delegation to other experts in the company. Boards can ensure that they have the right insights and foresight for resilience in governance, including an important baseline knowledge and understanding across E, S, HR, and G.

With today’s shifting regulatory framework and the new role of boards, what’s next?

More scrutiny from stakeholders as well as shareholders. Shareholders are getting sophisticated in their knowledge of ESG and the value drivers for the company. They’re sharp, and they ask far more targeted questions.

I also want to conclude by saying that there is a profound cultural change happening from the inside. Companies must internalize their core values, and this starts at the board level. Boards must live their values—and these values must be stewarded and acted upon. Otherwise, we’re back at where we started—“skills-washing” through ESG.

Helle, thank you for joining us and for a very provocative dialogue. Learn more about Competent Boards certification programs and BSR’s board offering.

Blog | Tuesday October 18, 2022

Building Trauma-Informed Workplaces: Recommendations for Business

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Modern slavery and human trafficking is on the rise. While the public and private sectors have largely focused on preventing and mitigating these risks, more can be done to address the root causes of labor exploitation.

Safe, sustainable employment is one of the most effective ways to support survivors in securing their livelihood. The private sector is uniquely positioned to provide vocational training, skills and confidence coaching, and entry-level jobs for survivors who seek financial stability.

The Global Business Coalition Against Human Trafficking (GBCAT) recently sat down with three organizations to learn about their programs to employ and empower survivors of human trafficking and their efforts to implement a trauma-informed workplace that enables all employees to thrive. We discussed how they had got started with survivor employment and empowerment, key challenges of adopting a trauma-informed approach, and lessons learned for business.

Here we share some key findings from these conversations to help more businesses implement their own trauma-informed practice.

Three Businesses Employing Survivors of Human Trafficking

While still too few and far between, a variety of organizations are showing leadership in employing survivors of human trafficking and other forms of exploitation. Our case studies highlight three successful examples:

1. The Market Project, a US-based nonprofit organization which builds businesses that offer stable work to survivors, launched Nguvu Dairy, a yogurt company in northern Uganda. They have employed hundreds of men and women, most of whom have experienced high levels of trauma. See the full conversation here.
2. Marriott International and GFEMS, a global hospitality company and an international fund working to end modern slavery, have created the Future in Training (FIT) Hospitality curriculum. FIT provides training and resources in the hospitality industry and supports survivors in navigating career paths. See the full conversation here.
3. Outland Denim, an Australian denim company, currently employs over 50 survivors of human trafficking and other forms of exploitation in Cambodia. Outland Denim has a holistic philosophy to employment, which includes a two-year training program, paying a living wage, and additional educational and professional development opportunities. See the full conversation here.

Three Key Takeaways for Business

1. Trauma-Informed Approaches Benefit Everyone

Poverty and a lack of economic opportunity are key drivers of human trafficking and other forms of exploitation. When individuals are not financially secure, they are more vulnerable to deceptive recruitment or employment practices.

Access to safe and stable employment not only reduces survivors’ own risk of exploitation but also that of dependents, like children or young adults. Three-quarters of employees at Outland Denim expressed feeling a reduced level of risk to exploitation after just six months of employment.

Moreover, education, vocational training, and other resources can benefit entire communities. 98 percent of surveyed employees at Outland Denim noted that they share the education provided by the company—such as personal finances—with their families and communities, extending their reach and impact.

All employees can benefit from a trauma-informed approach, which helps to build trust and employee motivation, strengthen relationships, and emphasizes diversity, equity, and inclusion.

2. Importance of a Long-Term Approach to Partnerships

Business cannot start out alone when building a survivor empowerment program. They should partner with immediate needs providers and vocational training organizations to help identify survivors as well as assess whether they are ready for employment and provide critical support services, like healthcare and legal aid.

Partnership should not stop once a survivor has been hired; business can continue to seek support of expert NGOs in the initial stages of the employment journey.

Marriott and GFEMS have worked together to develop the FIT curriculum and to address barriers—including transportation, childcare, and financial assistance—that would prevent survivors from accessing the curriculum.

3. Iterative Learning Supports Progress

The relative infancy of most survivor empowerment and employment programs—and the complexity of challenges faced—make monitoring, evaluation, and iterative learning core to their success. Each organization and program have developed a monitoring and evaluation framework. Incorporating the feedback of survivors is another integral element.

The Market Project conducts semi-annual impact evaluation surveys at Nguvu Dairy to assess and refine the company’s approach to survivor employment. The survey provides critical site-level information about employee experiences, feedback on how managers are implementing a trauma-informed workplace, and indications of employees who, save for the job, would be at potential risk of exploitation.

Business Benefits

Many workers have experienced varying degrees of trauma. Some may be survivors of modern slavery, while others may be survivors of domestic violence, drug or alcohol addiction, conflict, or war. An organization that acknowledges and respects the needs of trauma survivors and fosters an environment in which they feel safe, supported, and empowered will find that these benefits create a better place to work for everyone. 

Conversely, introducing survivors of modern slavery into a business that has not adopted a trauma-informed management style may inadvertently risk retraumatizing survivors by exposing them to power dynamics that mirror past experiences. 

GBCAT is proud to share the experiences of Marriott International, Outland Denim, and the Market Project, showing how companies that update their practices and policies to be trauma-informed can create an environment that is safe for all.

These three case studies accompany GBCAT’s Business Guide on Empowerment and Employment of Survivors of Human Trafficking and the newly released virtual Trauma-Informed Company Training, developed in partnership with Futures Without Violence, which provides additional guidance for business on how to design and establish a trauma-informed workplace. For more information on GBCAT and how to become a member, reach out to the team.

Blog | Thursday October 13, 2022

Tech Against Trafficking: Leveraging Innovation to Tackle Modern Slavery

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On September 27-28, Amazon and BSR hosted the first Tech Against Trafficking Summit in Seattle, Washington, USA. The summit brought together over 160 leaders from the anti-trafficking field, including businesses, survivors and activists, governments, investors, and civil society, to expand opportunities for collaboration and accelerate the impact of innovative technology solutions addressing human trafficking.

Throughout the summit, 10 organizations presented their innovative technology tools that help combat different forms of human trafficking: Polaris, Diginex, Winrock, Stop the Traffik, Pacific Links Foundation, Fundación Pasos Libres, Altana AI, Commit Global, Trilateral Research, and Quizzr. In addition to these organizations, TAT members provided examples of how their companies are supporting anti-trafficking efforts and preventing the misuse of their platforms.

Here are some key takeaways from the summit, which will inform the agenda in leveraging technology to combat human trafficking:

• We need to address the barriers that prevent effective deployment of technology. First, technology development is often siloed, and there is not enough dissemination across actors, which limits impact and leads to duplicated efforts. Second, technology is often developed in the global North, without sufficient awareness of the local context in which the solutions will be deployed. Finally, current financing models don’t address the needs of the field. Technology investments are seen as “overhead” costs for most civil society organizations, and anti-trafficking organizations struggle to find long-term funding to scale their efforts.
• It is critical that technologies are built with a survivor-first and trauma-informed approach. Most technology and anti-trafficking efforts today are led by professionals, not by survivors. Speakers at the summit repeatedly highlighted that technology development efforts should focus primarily on empowering survivors. For example, participatory technology tools that provide agency to impacted individuals have the potential to break existing power dynamics. When using and managing anti-trafficking data, we should not oversee the fact that data is about individuals’ lives and experiences. Similarly, funders should focus on supporting survivor-led organizations.

"How can we make data work for survivors of trafficking? We should leverage technology, but we should also leverage the experience of people who have been in it.”

Suamhirs Piraino-Guzman, Head of Programs, Survivor Alliance

• Data privacy is a concern, but privacy-preserving methods may offer a solution. Data privacy concerns underscored much of the discussion, as privacy often means safety for those impacted by human trafficking. These concerns often limit data sharing across organizations. However, privacy-preserving mechanisms such as synthetic datasets may offer a solution. TAT’s work in previous years has helped make this technology more accessible to the anti-trafficking community. 
• Technology is not a silver bullet; it must be complemented with policies and due diligence measures. Although the main theme of the summit was technology and innovation, most of the conversations focused on other factors that are crucial to make technology fully operational. Technology tools alone are not sufficient in addressing the crime; they must be complemented with policies and other due diligence measures for effective deployment and to ensure that technology tools themselves are not contributing to additional harms.

“Partnership has to be the core of everything we do, because of the intersection of this work with so many other important human rights that we need to address.”

Amy Rahe, Managing Director of Strategic Partnerships, Freedom Fund 

• Cross-sector collaboration is vital to deploy innovation effectively. Addressing human trafficking and modern slavery requires a variety of skills and expertise, from criminal justice experts to service providers and technologists. Without input from companies, civil society, those with lived experience, and meaningful cooperation with governments, efforts to scale effective technology solutions risk to go overlooked.

“We see the momentum and urgency of doing more to develop and enforce policies and tools to address human trafficking. Now is the time to come together to collaborate on these important issues. There is strength in our collective and respective expertise, wisdom, and work.”

Dr. Kari Johnstone, Acting Director and Principal Deputy Director of the United States Office to Monitor and Combat Trafficking in Persons

To continue facilitating collaboration in the anti-trafficking field, TAT kicked off the third round of the Tech Against Trafficking Accelerator at the summit. Throughout the next 12 months, TAT members and partners will work with Polaris’ Nonechka program and the Issara Institute to help accelerate the scale and impact of their technology solutions.

We’re excited to build on this momentum and continue efforts to collectively tackle modern slavery. All companies and anti-trafficking organizations are invited to contact us to find out how to get involved.

Blog | Wednesday October 12, 2022

The Supply Chain Risk You Didn’t Know About: Navigating Responsible Sourcing in AI

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Every Company Is a Technology Company

It’s no secret that Artificial Intelligence (AI) is transforming business, and it’s doing so well beyond the boundaries of traditional technology sector companies. Five years ago, 71 percent of Fortune 500 CEOs agreed that “these days, their company is a tech company,” and 81 percent identified AI and Machine Learning (ML) as an “important” technology for investment.

This trend has only grown, with corporate AI adoption further accelerated by the pandemic and more companies utilizing AI beyond the enablement of efficient business processes to fuel the creation of new business models, products, and services.

While the proliferation of AI creates significant opportunity for business and society, it also surfaces several social justice and human rights issues, which includes an often-overlooked but significant labor risk in the AI supply chain.

Protecting the Rights of the Invisible Workforce

Considering that AI often replaces and nearly always transforms tasks previously performed by humans, it’s often assumed that labor risks may be reduced or eliminated. However, Machine Learning (ML) depends on a large workforce performing essential tasks of data enrichment—including cleaning, labeling, and moderating the vast troves of unstructured data—that make ML and the plethora of products and services it enables technically and commercially viable.

While crucial to AI/ML development processes, data enrichment workers are an invisible workforce, most often crowdsourced via third-party platforms and contracted with few to no labor protections. They are likely to earn subminimum wages due to typical risks and costs of employment outsourced to the individual, and little to no ability to file a complaint and access the right support.

Regulatory and private-sector approaches—where they exist—are insufficient, geographically disparate, and haven’t kept pace with the rate at which the sector is expanding globally. While failure to pay closer attention to this growing workforce and their precarious work conditions could become the next big supply chain emergency, thoughtful and collaborative approaches can protect and even promote human rights for data enrichment workers.

Taking Individual Corporate Action

Recently, BSR and Partnership on AI (PAI) joined forces to identify opportunities for industry and sector collaboration on responsible sourcing for data enrichment.

Our key findings indicate that individual corporate awareness and good practice are still nascent and require action in the near term to establish a foundation for shared learning and ultimately scale up to effective collaborative efforts in the future.

Here are key steps companies can take to assess and address potential issues through individual action:

• Raise internal awareness. Human rights and responsible sourcing professionals should understand if and how their company sources data enrichment services. Engage with technologists in relevant business units and product teams to understand processes for sourcing enriched data, including whether teams are sourcing directly via platforms or through vendors. Determine risk and identify steps that may need to be taken in line with existing human rights and responsible sourcing approaches.
• Assess existing AI sourcing partnerships. Teams that source enriched data directly via platforms can familiarize themselves with the Fairwork Cloudwork Principles and check the Cloudwork ratings to learn how these platforms are performing. Companies that source enriched data via a third party and those that source enterprise AI as a service should ask their providers how they’re managing responsible sourcing for their data enrichment and affirm that this issue is important to you as a client.
• Aim to engage and improve conditions, not retreat. Digitally distributed work has created new economic opportunities, including for many who were previously excluded from traditional work opportunities due to discrimination, caregiving responsibilities, and geographic location, among other reasons. Companies should not seek to eliminate this type of work from their supply chain, but rather engage and partner with suppliers and the sector to ensure labor rights are respected and that working conditions enable data enrichment professionals to thrive and advance in the field they help to build.
• Help decision-makers take an informed approach. Teams that develop AI/ML internally are likely to source data enrichment services to support their models. They can leverage PAI’s whitepaper on Responsible Sourcing of Data Enrichment Services to understand and inform decisions they’re making throughout the sourcing process that impact working conditions.
• Pilot responsible approaches and share learnings. Given the field’s nascent stage in formalizing responsible sourcing practices, thoughtfully planned pilots will help put existing recommendations to the test. Sharing learnings from pilots can help prove the feasibility and value of adopting responsible sourcing practices. Companies interested in demonstrating leadership in piloting approaches laid out in PAI’s paper are invited to contact PAI directly.
• Track opportunities for collective action. We know that fully addressing these labor risks at scale will require industry or sector collaboration. As we learn more about what companies are well-placed to address through piloting and individual approaches, we will also learn more about where collaboration is necessary for meaningful impact.

We invite business to bring their insights and ideas from these experiences to BSR’s Collaboration IDEAS Process, where we incubate game-changing collaborations. 

Partnership on AI is a non-profit partnership of academic, civil society, industry, and media organizations creating solutions so that AI advances positive outcomes for people and society.

Blog | Thursday October 6, 2022

Inside BSR: Q&A with Cassie Collier

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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? What is your favorite hobby?

I grew up in Central Pennsylvania and now live in New York City.

At BSR, I support financial institutions—including banks, private equity firms, and venture capital firms—in integrating sustainable business practices into their investment processes. In a world where financial systems hold significant power, I find this work incredibly pressing and important. In my free time, I am an entrepreneur! I have my own custom board game business, Bundle, with my sister.

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?

When I was a college senior at Susquehanna University, the 2008 financial crisis hit. I remember watching financial news on TV—seeing executives receiving bailouts while everyday people were losing their homes. It didn’t seem right.

I packed my bags and moved to Nicaragua, where I was a Peace Corps Volunteer for two years. There, I witnessed a more ethical way of conducting business—micro-lenders that offered low-interest rates loan to new entrepreneurs, small restaurant owners that would consciously price their menu so community members could afford them, and farmers that formed co-operatives to equally share risk and profits.

When I returned from the Peace Corps, I enrolled at Harvard Kennedy School to understand how our own financial system could be repaired. My thesis analyzed Fortune 500 companies’ role—sometimes positive, sometimes negative—in upholding human rights.  

After an enlightening stint at Deutsche Bank, where I learned the technical aspects of finance—but even more importantly, what motivates people, how power structures are upheld, and how groupthink affects decision making—I joined BSR.

Here, I am a Manager on our Financial Services team, working alongside large banks, private equity firms, and venture capital firms to consider how financing can be done in a way that respects people and our climate.

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

What I really value about BSR is that we are given the agency to pursue what motivates us. About six months ago, I started to read about the housing crisis unfolding before us. In my research, I learned that housing is incredibly unaffordable due, in large part, to institutional investors rapidly buying up the housing stock across places like the US, Canada, and Spain. (Learn more in this blog post I co-authored.)

With the support of BSR colleagues, I have spent the last two months having conversations with people most negatively affected by this housing crisis—including tenants, members of tenant associations, and heads of fair housing centers—to better understand the challenges and potential solutions at hand. Now, BSR colleagues and I are planning to engage private equity members on this issue.

It is a systemic challenge, and I am looking forward to mobilizing stakeholders in collective action.

What issues are you passionate about and why? How does your work at BSR reflect that?

I grew up in a small coal mining town in Pennsylvania, where there is a history of miners getting severely injured or killed due to unsafe working conditions. So, from a young age, I became passionate about how everyday workers and communities are treated by those in power.

At BSR, I get to work with mission-driven people at financial institutions who also care about the same issues. Together, we’ve worked to establish living wage policies for workers, build Net Zero carbon emissions plans, and create human rights-focused due diligence practices. One project that was particularly special was working with Allbirds and a team of advisors to develop the Sustainability Principles and Objectives (SPO) Framework, a set of climate and human rights standards for companies about to go public.

What were the things that brought you joy amid the uncertainty and challenges of the past two years? What are you looking forward to in 2022 and beyond?

There have been many blessings in the last two years. First, due to flexible remote working, I was able to spend more time with my family in Central Pennsylvania. Second, I spent a lot of time hiking and even reached the highest peak in 12 US states—and counting. Third, I got the cutest Sheltie named Frisbee—we spend time at the dog park in Central Park, which is his (and my) happy place. 

Blog | Tuesday October 4, 2022

Navigating the ESG Ratings Landscape: Five Recommendations for Business

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ESG in general, and more specifically ESG ratings, have been in the line of fire recently. The critics have been loud, with strong accusations of a false and flawed system.  

While some critiques are justified, there is a lot of misunderstanding around ESG ratings, which continue to play an important role in benchmarking sustainability information and informing investment decisions. It is important to understand what ratings are, and equally what they are not, to avoid these misinterpretations.  

With a background in the responsible investment industry, I know ratings often raise questions and sometimes frustration among companies—recent headlines risk making matters even more confusing. I’ve received numerous questions from member companies trying to figure out how the rating system works and how to engage with rating agencies.  

With the right insights, companies can grasp the benefits of ESG ratings and how they can play a positive role in self-assessments, benchmarking against peers, and aligning business strategy with respect for social and environmental issues.  

With this backdrop, here are five common dilemmas with key recommendations for business:   

How much should I care about ratings? The short answer is—a lot. ESG ratings are now a mainstream tool in institutional investors practice, used as one of several factors to evaluate ESG performance and make buy or sell decisions. Ratings help benchmark a company against peers, identify leaders and laggards, and get a sense of the ESG landscape within a given sector. For example, they show up daily on Bloomberg terminals around the globe, and often companies are simply not in consideration for investment if they do not pass a certain barrier—so ratings are critical for issuers.  

It is a jungle out there and I don’t know what to focus on. The number of questionnaires can seem overwhelming and raise concerns about how to allocate already limited resources. A first step is to find out how your critical investors are using ESG ratings, identify which issues they believe are important, and what data they are looking for. MSCI and Sustainalytics are the most frequently used rating agencies. Ensure that you are directly engaging with your investors to understand their expectations. It is advisable to monitor for presence on any investment blacklists, as this can result in exclusion from ESG products. If your rating is poor, communicate to your investors how you plan to address the issue.  

I am disappointed with my rating but not sure how to contact the rater. I have heard many executives who are unhappy with their ESG scores, claiming it is based on incomplete research or a lack of contextual analysis. Reach out to the raters and build a dialogue, get feedback, and see what it takes to improve your rating. It is also in their interest to collaborate on gaps and be transparent around methodologies, so it should be a win-win. Look through the rating report shared with you—this should provide contact information for the analyst, and log in to their online platform where you can include additional information.

I have released a new report, but my rating has not improved. Ratings are updated annually, so perhaps your latest report has not been reviewed yet. A typical rating agency evaluates around 700 criteria for thousands of companies, which takes time. It is possible that the analyst simply missed information, which underlines the benefit of establishing a dialogue with the raters for verification purposes. Even when information is retrieved, many raters require this information to be made public. This is a way of pushing companies toward improved transparency and accountability.  

I have just become B Corp certified/signed up to SBTi, but still have a poor rating. External certifications matter less in this context, as ratings measure how a company approaches ESG from a risk management perspective, rather than from business impact. A company can have a product with positive environmental impacts, but if it does not manage labor-related risks or corporate governance, it will never receive a good rating. If you want to improve your score, focus on implementing solid ESG management systems and report transparently on it; this will positively impact your rating at the end of the day, as a mere side-effect.  

ESG ratings are not a silver bullet, but that does not mean they are not useful. They have played a key role in mainstreaming sustainable investing and educating the investor community on how sustainability issues are relevant to business. It is still a nascent industry lacking standard definitions, which is a valid part of the criticism, but it has never claimed to be an exact science. Investors are a powerful actor in the transition toward a more just and sustainable world, and ratings are an important part of their toolbox to get there.  

Blog | Thursday September 29, 2022

The New EU Forced Labor Product Ban: Recommendations for Business

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Modern Slavery Is on the Rise in the Private Sector

September 2022 has seen a string of anti-trafficking developments.  

The newly released global estimates by the International Labour Organization (ILO) show that modern slavery is on the rise, with 27.6 million people in forced labor in 2021—most of whom work in the private sector.

In parallel developments, the European Commission published its awaited proposal for a new trade instrument to ban products made with forced labor from being marketed, sold, or exported from the EU market, which is likely to enter into force in 2026. 

Forced labor bans exist in various forms across North America, including Section 307 of the 1930 Tariff Act (US), the Uyghur Forced Labor Prevention Act (US), and the Tariff Act (Canada). However, the draft regulation would create the first forced labor instrument at a regional level.

It casts a wide net targeting all products and by-products, independently from where they were sourced or produced. This requires business to strengthen evidentiary data and adopt a strong human rights risk-based assessment approach.

How will this new instrument impact business? Does it present a significant departure from existing forced labor import bans? And finally, how can companies prepare?

Here we share some early insights and steps to help business get started.

Three Things Business Need to Know

1. Scope

• The European Commission proposes to ban any product made with or transported using forced labor—at any stage of production, manufacture, harvest, or extraction—that are placed on the EU market or exported.
• Unlike the US Uyghur Forced Labor Prevention Act (UFLPA), which entered into force in June, the EU legislation will apply to imports from all regions and exports
• While all companies doing business in the EU may be impacted, the proposal recognizes that targeted support will be needed for small and medium-sized enterprises.

2. Enforcement and investigation

• High-risk sectors and geographies are likely to be the target of enforcement action, at least initially. Public authorities will follow a risk-based approach, prioritizing value chain steps where there is a higher risk of forced labor.
• Through a two-step approach, national authorities will determine whether forced labor has occurred and can order the withdrawal of products from the market.

3. Evidence

• Various sources of information will be used to determine the existence of forced labor, including submissions from civil society, reports, and an EU database of forced labor risks. 
• Companies will be required to provide information on the actions taken to mitigate, prevent, and bring an end to forced labor risks.

Recommendations for Business

1. Map supply chains and engage suppliers to determine areas of high risk of modern slavery

• Business can map their supply chains from raw materials to finished goods to better understand their origins.
• Efforts should be concentrated in sectors and geographies where modern slavery risks are high (e.g. manufacturing in Asia).
• The use of technology—such as blockchain, DNA tracing, and AI—is a viable means to automate processes and data analysis and, subsequently, identify where products are made and enhance visibility in complex supply chains.

2. Integrate modern slavery risks into broader human rights due diligence and management

• To better anticipate existing and emerging legislation, companies can adopt a holistic approach to managing human rights risks, which incorporates forced labor risks and is aligned with the UN Guiding Principles on Business and Human Rights (UNGPs).
• This includes adopting more stringent modern slavery prevention strategies, such as integrating human rights considerations at the supplier selection phase and engaging with stakeholders—including business partners—to better identify forced labor practices in the supply chain, such as the payment of recruitment fees via third party agencies. 

3. Document more comprehensive human rights due diligence

• Companies can ensure that their due diligence policies and procedures are sufficiently robust and documented to provide the information required under these types of acts, as recent trends would suggest such requirements will only become more commonplace.

With similar forthcoming regulations being debated in Canada, the UK, Australia, and Japan, this is the time for business to ramp up efforts to conduct human rights due diligence on their supply chains and strengthen their modern slavery policies. That way, business can become part of the solution as we continue to proactively anticipate and prepare for emerging legislation.

BSR’s anti-trafficking team advises business from across sectors on due diligence and management of forced labor risks. Please get in touch with any questions.

Blog | Tuesday September 27, 2022

BSR Climate Scenarios: A Tool to Drive Resilient Business Strategy

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The climate crisis is one of the most pressing challenges facing business today, creating significant new risks and opportunities. It requires both business strategies that are resilient to climate risk and disclosure of climate-related information that meets investor expectations, such as those prescribed by the Task Force on Climate-Related Financial Disclosures (TCFD).

Scenario analysis is a well-established methodology that is widely used in different sectors. It’s a powerful tool to explore multiple possibilities in conditions of uncertainty and ultimately helps develop resilient business strategies. The TCFD has embraced climate scenario analysis as an important tool enabling businesses to identify and disclose climate-related risks and opportunities under a wide range of plausible futures.

Companies looking to undertake climate scenario analysis can choose among several different climate scenarios, with various strengths and weaknesses. To date, most of these climate scenarios have not been purpose-built for corporate climate scenario analysis, and business has had to cobble together scenarios from various sets to assess both physical and transition risks. Furthermore, most of these scenarios have been narrowly focused on the physical impacts of climate change without providing any detail on how the broader sociopolitical context might change and impact business. 

To fill these gaps, BSR has developed three extended climate scenario narratives built upon the Network for Greening the Financial System (NGFS) climate scenarios and corresponding datasets. The three scenarios each present different emissions trajectories, which define their warming potential and associated transition and physical impact risks. They cover both physical and transition risks in a single, integrated scenario set, using the same assumptions and data. 

BSR has further enhanced the NGFS scenarios by building extended narratives using trend analysis and forecasting on how a range of business-relevant topics—such as technology and social impacts—could play out in the coming decades. This is important because climate impacts and risk are not happening in a vacuum. The operating environment for sustainable business is being radically transformed by diverse and complex interacting forces driven by the climate crisis and by other macro-level developments, such as geopolitical conflict and technological innovation. Understanding plausible ways in which system-wide changes might unfold is key to making more informed business decisions.

Using Scenarios for Strategic Conversations

A strategy that is predicated on only one projection of what the future will hold is highly vulnerable to unforeseen changes. Scenario planning is a way of considering a multiplicity of plausible future developments. It enables companies to stress test and refine their strategy to make it more likely to succeed across the full range of plausible futures.

The BSR climate scenarios support both a qualitative and quantitative approach to scenario analysis. The extended narratives on a range of business-relevant topics enable organizations to explore the cascading impacts of climate change on their business, their stakeholders, and society. At the same time, the scenarios are accompanied by climate impact data that companies can explore to quantify impacts relevant to their organization, sector, and economy.  

Of course, the most important insights are to be found when using climate scenarios to identify climate-related risks and opportunities specific to your own business and uncover any strategic moves to position your business to thrive across all scenarios. Be sure to give equal consideration to all three scenarios rather than trying to choose “the most likely” scenario. History is full of unlikely scenarios causing great disruption, and scenario analysis provides an important opportunity to ask “what if” questions.

​The Scenarios in Action

BSR is working with companies across sectors to undertake climate scenario analysis. Through workshops, cross-functional groups explore each scenario, identify climate-related risks and opportunities that arise from changing operating contexts, and discuss how to mitigate risks and build strategic resilience. In these conversations, companies also explore how market shifts can unlock business opportunities and gain competitive advantage. These insights can then be translated into action planning for the business and useful disclosures for investors and other stakeholders.

Member companies who are participating in climate scenario analysis are finding value in bringing together colleagues to discuss issues outside of their general scope of work, uncovering unforeseen potential impacts on their business, and identifying feasible business interventions to address climate risks and opportunities.

Read the Climate Scenarios

Reports | Thursday September 22, 2022

Human Rights Due Diligence of Meta’s Impacts in Israel and Palestine

Preview

This human rights due diligence exercise reviews the impact of Meta’s policies and activities during the May 2021 crisis in Israel and Palestine. The primary purpose is to provide Meta with prioritized, action-oriented, and decision-useful recommendations for policies and practices to fulfill Meta’s commitments under its Corporate Human Rights Policy and responsibilities under the United Nations Guiding Principles on Business and Human Rights (UNGPs).

Blog | Thursday September 22, 2022

Human Rights Due Diligence of Meta’s Impacts in Israel and Palestine in May 2021

Preview

In September 2021, Meta commissioned BSR to review the human rights impacts of the company’s policies and activities during the May 2021 crisis in Israel and Palestine. Today, we are publishing the results of BSR’s analysis in Arabic, English, and Hebrew.

BSR would like to thank everyone that participated in this review and provided their valuable time, insights, and perspectives.

The discussions we held with affected stakeholders to inform this review brought home to us how so many detailed decisions about social media policy, technology, and practice have fundamental impacts on the protection, realization, and fulfillment of human rights as a common standard of achievement for all peoples—especially in the context of highly complex social and historical dynamics. We hope this review informs actions that result in meaningful improvements in the daily lives of all people connected to Israel and Palestine.

The primary purpose of the human rights due diligence is to provide Meta with prioritized, action-oriented, decision-useful, and forward-looking recommendations for policies and practices. In doing so, this human rights due diligence helps fulfill Meta’s commitments under its Corporate Human Rights Policy and responsibilities under the United Nations Guiding Principles on Business and Human Rights (UNGPs).

Specifically, Principle 20 of the UNGPs states that companies should track the effectiveness of their response to human rights impacts by engaging with stakeholders, integrating findings into relevant processes, and driving continuous improvement. Principle 22 states that companies should provide for or cooperate in the remediation of adverse impacts, including seeking to guarantee non-repetition of prior harms.

This human rights due diligence also helps fulfill the recommendation of the Meta Oversight Board that Meta should engage an independent entity not associated with either side of the Israeli-Palestinian conflict to determine whether Meta’s content moderation in Arabic and Hebrew has been applied without bias.

BSR found that Meta took many appropriate actions during the May 2021 crisis, including establishing a special operations center and crisis response team, prioritizing risks of imminent offline harm, seeking an approach to content removal and visibility based on necessary and proportionate restrictions consistent with the International Covenant on Civil and Political Rights (ICCPR) Article 19(3), and overturning policy enforcement errors in response to user appeals. For this reason, some of BSR’s recommendations build upon important foundations for a human rights-based approach to content governance that have already been established by Meta.

However, BSR also identified a variety of adverse human rights impacts for Meta to address, including impacts on the rights of Palestinian users to freedom of expression and related rights, the prevalence of anti-Semitic content on Meta platforms, and instances of both over-enforcement (erroneously removed content and erroneous account penalties) and under-enforcement (failure to remove violating content and failure to apply penalties to offending accounts).  

BSR did not identify intentional bias at Meta, but did identify various instances of unintentional bias where Meta policy and practice (such as insufficient routing of Arabic content by dialect or regional expertise), combined with broader external dynamics (such as efforts to comply with US law), leads to different human rights impacts on Palestinian and Arabic-speaking users.

BSR has made 21 recommendations to Meta to address these adverse human rights impacts and bias.

Four recommendations relate to content policy, such as reviewing Meta’s policies relating to content that praises or glorifies violence, and specific elements of Meta’s Dangerous Individuals and Organizations policy.

Four recommendations relate to transparency, such as increasing the breadth, specificity, and granularity of information provided to users about Meta content policy enforcement, such as when action is taken on their content or accounts.

Ten recommendations relate to operations, such as determining the market composition (e.g., headcount, language, location) needed for rapid response capacities, the routing of potentially violating Arabic content to reviewers by dialect and region, improving classifiers (algorithms that assist with content moderation by identifying and sorting content that may violate Meta’s content policies), developing mechanisms to track hate speech based on type, and enhancing content moderation quality control processes to prevent large-scale errors.

Finally, three recommendations relate to systems change that goes beyond just Meta, such as how counterterrorism law applies to the social media industry and support for access to remedy.

The UNGPs lay out the expectation that Meta should avoid infringing on the human rights of others and should address adverse human rights impacts with which it is involved. In a conflict-affected context like Israel and Palestine, this includes understanding how ongoing conflict dynamics intersect with Meta’s platforms, how the online actions of a range of actors are possibly shaping offline events, and which groups are particularly vulnerable to adverse human rights impacts connected to Meta’s platforms given the conflict context.

We believe that BSR’s human rights due diligence will help Meta fulfill these expectations, and we look forward to Meta making progress reviewing and implementing our recommendations. We also hope that the insights we’ve shared today can inform the efforts of policy makers and other social media companies addressing complex challenges of content governance globally, especially in conflict-affected contexts.