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Blog | Thursday August 13, 2020

Building Strategic Resilience Using BSR’s COVID-19 Scenarios

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The COVID-19 pandemic—and resulting economic, political, and social crisis—is the most profound global disruption in decades. And how we respond to it will remake the world. Already many are calling for a “great reset.”

While it is impossible to predict what this will look like over the coming years, to help our members, partners, and community navigate this uncertain time, BSR is publishing a set of three scenarios, each depicting a different possible future in 2025.

These are not predictions for what the future will hold; rather, they are hypothetical constructs that describe what the future could look like as shaped by the current global pandemic. None of these scenarios will transpire exactly as written. However, taken together as a set, they provide an important tool to challenge our assumptions about the future, stress test our strategies and plans, and identify opportunities to future-proof our organizations. Above all, they should inspire thinking about how, within the constraints of the possible, we can create a more just and sustainable future.

​BSR’s COVID-19 scenarios describe three possible versions of what the next five years might plausibly hold and what this would mean for sustainable business. They are structured around two overarching critical uncertainties: the success of efforts to contain the virus and what the socioeconomic policy response will look like.

The Success of Containment Efforts

Our success in containing the virus will not only determine the toll of the pandemic on human life and health, but it will also reshape social and economic life. Efforts to contain the virus will depend on multiple factors, including characteristics of the virus, epidemiological interventions, and the development of drug therapies and vaccines.

The Nature of the Socioeconomic Policy Response

The policy response to the COVID-19 crisis is unleashing trillions of dollars in spending and causing governments and other stakeholders to rethink existing priorities. The movement for racial justice in the U.S. and elsewhere has amplified the urgency and scope of these considerations. How governments respond to this moment has the potential to rewrite the social contract and reorder economic priorities. Alternatively, it could further entrench inequality and exacerbate polarization.

BSR’s COVID-19 Scenarios

Below are summaries of the three COVID-19 scenarios our Sustainable Futures Lab has developed. The complete scenario descriptions are available to download.

Scenario 1

Winners and Losers

The ongoing crisis has intensified polarization and inequality. Although vaccines have been developed, they confer only limited immunity, and a well-coordinated public health effort is still required to achieve containment. While Asia has largely recovered, ongoing COVID-19 restrictions continue to hinder business, travel, and trade in other parts of the world. Businesses are consolidated and highly automated. The wealthy have insulated themselves from risk, while “essential workers,” largely in Black, Indigenous, and People of Color communities, are hit hard. Intergenerational tensions are running high. Capitalism and democracy have lost their sheen, while China proffers a vision of health, stability, and prosperity.

Scenario 2

Community Safety Nets

Although some countries made progress on containing the pandemic in 2020, this proved difficult to sustain over time. Communities, businesses, and individuals have had to adapt to heightened risk in creative ways. Cities have made major changes to the built environment to allow more of life to be lived outdoors. Working hours and locations are more flexible, and businesses and governments invest in childcare to enable working parents to work from home. There is a stronger sense of place and community solidarity, and a bevy of visionary young political leaders have entered local government. Although most people face economic challenges and elevated health risks, communities have come together to provide support and well-being.

Scenario 3

Building Back Better

After a catastrophic 2020, the world started to get back on its feet thanks to international collaboration on vaccine development and distribution. The nationalist leaders who presided over the worst responses were ushered from office. The movement for racial justice catalyzed action on systemic inequality while a large portion of public stimulus spending aimed for a green recovery. Governments are increasingly focused on income equality and well-being, and social safety nets have been strengthened. Businesses are investing in supply chain resilience by diversifying their supply chains, mandating labor protections for workers, deepening partnerships with strategic suppliers, and building more circular economic models. Many challenges remain, but the new spirit of global solidarity that has emerged has created hope for a better future.

Using the Scenarios to Build Strategic Resilience

Scenarios are a flexible tool that can be used to stress test and future-proof nearly any sort of strategy or plan. They are best deployed in a workshop setting with a diverse set of internal stakeholders. No individual or function has a comprehensive view of the future, and the more diversity in the room the more robust will be the insights generated. Once you have your scenarios team assembled, follow these steps:

• Consider each of the three scenarios in turn. Which scenario most closely describes the world you are preparing for? Do any of these scenarios describe futures you are ignoring but shouldn’t be?
• For each scenario, what risks and opportunities would be presented for your company as it currently operates?
• What actions might you take to mitigate the risks and seize the opportunities that would work across most or all of the scenarios? Are any of the risks or opportunities so significant that even if they only occur in one scenario, you should develop a contingency plan for them?

Finally, remember that the future is not predetermined. While these scenarios describe plausible future possibilities that organizations should prepare for, it is up to each of us to shape what actually happens. Taking these scenarios as a starting point, then, the scenario team should imagine what a better—a more just and sustainable—future might look like, and what the organization can do to bring that world into being.

BSR looks forward to connecting with our members and partners on leveraging these COVID-19 scenarios to develop resilient business strategies. To learn more about these scenarios, please join our webinar on September 9, 2020. To explore ways we can work together or learn more about our work, please don’t hesitate to contact us.

Blog | Thursday July 30, 2020

A New Social Contract That Enables Social Justice

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For too long, structural inequities and short-term thinking have threatened our vision of a just and sustainable world. As we face the urgent challenges of COVID-19 and calls for increased accountability for racial injustice, now is the time to radically reimagine how business can contribute towards removing obstacles which are impeding social justice.

Our recent publication, The Business Role in Creating a 21st-Century Social Contract, details how the private sector can support economic prosperity and social mobility, and recent political, social and economic upheavals reinforce the urgency of creating a new social contract based on more inclusive models and practices.

To address deep disparities and systemic challenges, BSR believes companies need to examine failures of whole systems, identify tangible opportunities to improve their own diversity efforts, and rebuild equitable structures at both the individual and system level. This will take new approaches that move beyond diversity, equity, and inclusion (DEI) as primarily compliance-driven efforts and transform these tools into strategic drivers to achieve social justice.

A new social contract carries much potential to reform many of the social structures and policies which compound systemic inequities; business has a critical role to play in supporting new policies which advance economic prosperity and social mobility for all.

Our paper identifies five principles to guide business action to shape a new role for business in society, and each requires a deliberate and ambitious focus on DEI to succeed:

The first principle is stakeholder capitalism and the reorientation of business strategies to focus on long-term value creation for all stakeholders. To achieve this, companies need to diversify the board of directors and executive leadership team to address long-standing insufficient participation by women and Black, Indigenous, and People of Color (BIPOC) and report publicly on their efforts to do so. This will also require implementing a comprehensive DEI strategy that values differences and is embedded across all aspects of business operations. For example, eliminating gender and racial pay gaps, sourcing from women-owned, BIPOC-owned businesses, and aligning policy advocacy and participation in industry associations with a company’s DEI commitments.

The second principle is skill development and career pathways and in particular enabling all workers to achieve sustainable livelihoods. Here, it is essential that companies focus on DEI in hiring, training, and advancement. Companies can advance these efforts by eliminating bias in hiring, including those introduced by hiring algorithms, applying a diversity lens to employment decisions, including layoffs and furloughs, and creating career progression programs that build pathways to leadership for women, BIPOC, and LGBTI people.

The third principle is economic security and mobility, especially by strengthening and modernizing the social safety net. Here, companies can support public policies that provide meaningful benefits, including unemployment insurance, paid family and medical leave, and health care coverage for all. Companies also can advocate for minimum wage levels that support the ability of BIPOC, who are often in more vulnerable forms of unemployment, to achieve an adequate standard of living, and expanded access to education and communications technologies for underserved communities. In addition, companies can advocate for COVID-19 relief efforts and economic recovery plans that prioritize racial justice and women’s empowerment.

The fourth principle is a just transition to net-zero GHG emissions, creating high-quality green jobs and supporting workers and communities that are displaced in the transition to a net-zero economy. To realize this principle, companies are encouraged to create a transition plan to seize the employment-generating opportunities of the low-carbon economy and to consider how these opportunities can address structural inequalities and impacts on vulnerable communities. In addition, companies can ensure that their just transition plans support communities of color through social dialogue and stakeholder engagement.

The fifth principle is worker data protection, which aims to ensure that the implementation of new technologies is aligned with international human rights standards and protects the privacy and nondiscrimination rights of workers. To act on this principle, businesses can undertake forward-looking assessments that identify the DEI and human rights impacts of disruptive technologies. In addition, companies can use digital tools and data analytics in ways that support, rather than undermine, nondiscrimination and DEI objectives in hiring, performance reviews, and promotions.

For DEI efforts to be successful and sustainable, companies and institutions can and must take individual and collective action.

Each of these principles embeds DEI efforts as crucial tools in ensuring that a new social contract enables everyone to participate in and benefit from economic activity. For many companies, this represents an unprecedented opportunity to demonstrate bold leadership and bring novel approaches and innovative thinking to their DEI efforts, and their employees, stakeholders, and shareholders are paying close attention.

A new social contract carries much potential to reform many of the social structures and policies which compound systemic inequities; business has a critical role to play in supporting new policies which advance economic prosperity and social mobility for all. For DEI efforts to be successful and sustainable, companies and institutions can and must take individual and collective action.

BSR looks forward to working with our members, donors, and partners to create actions and opportunities that meet the urgency of this critical moment and work towards a new social contract that reaches its full potential of supporting social justice.

Blog | Friday July 24, 2020

When It Comes to Racial Justice, the Business and Human Rights Community Can Do More

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It has been almost two months since the tragic killing of George Floyd at the hands of four police officers in the United States. The public outcry has sparked an unprecedented wave of support for Black Lives Matter (BLM) from all facets of society, including business. A movement still touted as an organization of domestic terrorism by some voices from the political right in the United States is now gaining momentum globally as people coalesce around the call for an end to racial injustice.     

This is not just a domestic issue confined to the United States. This is a global human rights imperative.         

I am a Jamaican woman who is painfully aware of history and the connection between business and human rights. Businesses profited from the transatlantic slave trade and over 400 years of slavery that stole lives and decimated Black families and communities in the Americas. It is one of the sentinel business and human rights cases, and the enduring legacy of slavery sheds light on the racism and prejudice that existed then and now, albeit in more subtle forms.  

Representation in the Business and Human Rights (BHR) Movement 

As a Black professional in the business and human rights community who has worked in the US, UK, Kenya and now in Hong Kong, I take this moment to reflect on the role of the business and human rights community in tackling racism and discrimination. Why have we not engaged on these issues in a more robust and meaningful way? I ask this question particularly of BHR organizations based in countries in the Americas and Europe still dealing with the legacy of Atlantic slavery. 

Are we doing enough to break down barriers, raise voices of the most vulnerable and marginalized, and tackle diversity and inclusion issues, not just in our work with business but in our own organizations?

In a field that works very hard to hold businesses accountable for their most pressing human rights violations, I’ve noted some hesitation in addressing racial injustice as a BHR issue. The response has often been: "Race is a sensitive issue," "There are more important issues in the world to focus on," or "These issues are only confined to the United States." My colleagues have been predominantly white and middle class, and this becomes deeply personal for people of colour, who should be heard and have their experiences validated. This leads me to ask: Are we doing enough to break down barriers, raise voices of the most vulnerable and marginalized, and tackle diversity and inclusion issues, not just in our work with business but in our own organizations?

Are we doing enough as a field to be self-reflective and have those uncomfortable conversations about race and privilege that are often avoided? 

Tackling Racism Head-on in Our Work

Take the example of the progress that the BHR community has made over the past few years on taking action to highlight and address human rights issues in mega-sporting events. The plight of migrant workers in the Gulf who often risk their lives and live in deplorable conditions to construct stadiums has rightly brought many stakeholders to the table to tackle this and many other serious issues. But there is a noticeable absence within the BHR community when it comes to addressing the issue of racism in football and in sports writ large. Sport is after all a big business in which Black people are well represented but often lack any real power or influence. There are very few Black football managers, and the boardrooms of most national football leagues and even UEFA itself are almost exclusively white men. In the wake of George Floyd’s murder, the NFL reversed its controversial ban on players “taking the knee” during the national anthem—a stance first popularized by Colin Kaepernick in protest to the conditions Black Americans experience across the US—issuing a public apology and offering public support. Yet it seems to be all too convenient as the world faces its reckoning with race relations. 

We rightly focus on the labor practices of people in the developing world who make the clothes for people in the developed markets, but there is limited focus on Black people working in essential services and on the frontline who also need advocates making strong calls to action. 

Another cogent example would be the disproportionate impacts of the COVID-19 pandemic on Black people in the US and UK. The pandemic is exposing the systemic racial inequalities and disparities in health, education, and employment. Many Black people are dying in shockingly high numbers as they occupy a high proportion of frontline and essential worker positions increasing the risk of exposure to the disease and job losses. This is exacerbated by co-morbidity factors including obesity, hypertension, and diabetes, further creating complications and leading to poorer health outcomes.  

Why is the BHR community largely silent on these issues? 

We rightly focus on the labor practices of people in the developing world who make the clothes for people in the developed markets, but there is limited focus on Black people working in essential services and on the frontline who also need advocates making strong calls to action. Acknowledging that these too are BHR issues while working with business to address the unique circumstances and needs of vulnerable communities disproportionally impacted by COVID-19 will help to address the ingrained disparities that prevent many from realizing their basic human rights. 

Tackling Racism Head-on in Our Organizations

While it is positive to see some organizations within this space issue public statements and show support for Black Lives Matter, this cannot be reduced to a hashtag or public relations opportunity. I know that there are no overnight solutions but not being racist is not enough. The real work starts with being anti-racist—a conscious lifelong dedication to fight and dismantle oppressive systems. 

Proof will be in the actions, so what should be done? 

Taking action can be reflected in not only embedding diversity and inclusion in our own organizations but also diversifying our own perspectives, research, and thought leadership. The BHR community should work harder to tackle the systems and structures that reinforce racism—which is as much an issue of governance as it is of ownership and power.

Here are a few ways in which we can help in our own work where possible: 

1. Look beyond the obvious to acknowledge "the unspoken," such as unconscious bias, implicit bias, and microaggressions in the workplace.
2. Call for more board and leadership diversity in our own organizations and within the business community.
3. Apply more scrutiny to lobbying efforts made in businesses that are antithetical to diversity. 
4. Call attention to products and services that reinforce racial stereotypes and bias, including the development and use of artificial intelligence.
5. Scrutinize investment decisions made by companies and shareholders in systems that disproportionately impact vulnerable groups such as investments in private prisons that contribute to the problem of the mass incarceration of Black people, for example. 
6. Work towards incorporating diversity, equity, and inclusion in corporate benchmarks to assess and improve company performance on how they are tackling racial injustice by integrating the voices of rightsholders.

The BHR community should work harder to tackle the systems and structures that reinforce racism—which is as much an issue of governance as it is of ownership and power.

It is the responsibility of the business and human rights community to listen, learn, reflect, and act. As we begin to think of ways we can tackle racial injustice, spark dialogue, and ensure that we are not being complicit and part of the problem, I’d like to see a BHR field with less silence and apathy and more anti-racist action. Standing against racism starts with acknowledging the problem and working together to correct historical injustices as a first step. Stating unequivocally that Black Lives Matter while creating spaces for uncomfortable conversations and amplifying voices of the most vulnerable will be another critical step in the right direction.

We do not want more performance activism and tokenism—fostering authentic dialogue is the key to creating real change.

Originally appeared on IHRB. 

Blog | Tuesday July 21, 2020

Key Ways Business Can Still Support Women’s Reproductive Rights Following SCOTUS Decisions

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The U.S. Supreme Court (SCOTUS) ruled on two recent cases with potentially important long-term implications for employee access to comprehensive reproductive healthcare.  

In June Medical Services v. Russo, the Court struck down a Louisiana law that sought to severely restrict the ability of physicians to provide abortion services. In Trump v. Pennsylvania, the Court held that the Trump Administration had the authority to issue rules regarding the contraceptive insurance coverage guaranteed by the Affordable Care Act. 

June Medical is a win for proponents of abortion access—but a narrow one, decided on the basis of precedent. Trump v. Pennsylvania, however, may open the door for virtually any employer to discontinue providing insurance coverage for contraception. It is clear from both decisions that we cannot rely on this Supreme Court to protect women’s access to reproductive healthcare.  

The decades-long erosion of access to reproductive healthcare, coupled with underinvestment in resources devoted to maternal health care, is a net loss for American businesses whose female workers, prior to the pandemic, comprised a slight majority of the workforce. But it is a reversible one. Corporate policies could provide a bulwark against this erosion, helping to protect and strengthen the new social contract between business and society that the 21st century demands. 

As explored in the Rhia Ventures report Hidden Value: The Business Case for Reproductive Health, at least five drivers should compel corporations to invest in their employees’ reproductive health care including, for example, maximizing the available talent pool as many women consider the policy environment in career decisions: a majority of college-educated women (56 percent) say they would not apply to a job in a state that has recently banned abortion. Other drivers include employee morale and retention as many women state that controlling if and when to have children has been important to their careers, meeting their diversity, equity, and inclusion goals by recognizing reproductive healthcare coverage as a critical component of an equitable workplace, realizing cost savings when employees can control when and if they become pregnant, and staying ahead of growing scrutiny and stakeholder interest in this area. 

Commenting on the report’s release in January, BSR President and CEO Aron Cramer said, “Business holds significant, untapped potential to contribute to women’s advancement and stands to benefit tremendously by ensuring women are empowered. Access to reproductive healthcare is fundamental to women having the agency they need to shape their future.”  

How Companies Can Take Action 

1. Companies can start by conducting an internal audit to ensure that their health insurance for contraception not only meets but exceeds the requirements of the Affordable Care Act, covers abortion without restriction, and guarantees that contracted healthcare providers can meet all of their employees’ reproductive healthcare needs. They can also cover travel costs for employees who need access to reproductive health care outside of their home states due to legislative restrictions on abortion care.  
   
   One company interviewed for the report told the authors: “We support employees in accessing centers of excellence for other medical issues, and we treat access to abortion the same way.”  
    
2. When assessing their business footprints, including sites and conferences, companies may also wish to assess state laws pertaining to access to reproductive healthcare and identify opportunities to inform or influence such policies. Companies should also examine their political contributions to determine if they are inadvertently supporting those who are undermining women’s healthcare. 
    
3. A supportive culture around reproductive health benefits can be created by sharing clear information about coverage and finding ways to reduce stigma around comprehensive reproductive health in conversations about benefits. Research conducted for the report found that companies are often unaware of the benefits they provide for reproductive health and often may unintentionally limit contraceptive options and restrict coverage for abortion. The report’s authors also found that 69 percent of women with health insurance currently do not know whether their coverage includes abortion. 

The COVID-19 pandemic has intensified the urgency for corporate awareness and action. A recent survey of 2,000 women of reproductive age by the Guttmacher Institute found that 34 percent want to delay pregnancy or have fewer children because of the pandemic. The same proportion reported having to delay or cancel visiting a provider for sexual or reproductive healthcare or having had trouble obtaining contraception. Barriers to care are more pronounced for Black, Latinx, low-income and LGBTI women. These findings are supported by another concurrent survey of 2,200 adults undertaken by the National Family Planning & Reproductive Health Association, which found that 65 percent of adults think that it is a bad time to get pregnant and that 57 percent of women think that it is “more essential” for individuals to have access to birth control measures.  

Just as the coronavirus pandemic has shined a harsh light on myriad weaknesses and vulnerabilities in our healthcare system, the recent SCOTUS rulings reflect on the precariousness of reproductive autonomy in the United States. While the door has been opened for companies to opt out of insuring contraception, some doors are better left untraversed. With consistent majorities of Americans supporting access to abortion and contraception, the business community is best served by standing firm by women and their families. 

Blog | Thursday July 9, 2020

Why Worker Data Protection Should Be Central to a 21st-Century Social Contract

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Last month, we published a proposal to overhaul the relationship between government, business, employees, and people with a new social contract fit for the 21st century. Our proposal is based upon five principles, with the fifth principle being centered on worker data protection—specifically, that the use of new technologies in the workplace should be aligned with international human rights standards and protect the privacy and nondiscrimination rights of workers.

Data protection is rarely discussed during dialogue about the need for a new social contract, but we included it for two simple reasons: firstly, the existing social contract was developed in the pre-digital world, not today’s data-rich environment; secondly, a modern social contract must address a whole host of new risks and opportunities arising from how employee data are collected, shared, and used. The COVID-19 pandemic is shining an even brighter light on this challenge by both increasing the significance of worker health data and obscuring the distinction between the home and the workplace.

We believe that a 21st-century social contract needs to address three main concerns:

• Privacy: Monitoring and surveillance may be considered acceptable to protect worker and customer health, safety, and security, but the use of digital tools to track the productivity, wellness, or emotional state of an employee raises important questions about reasonable expectations of privacy in the workplace—and at home for those working remotely.
• Non-discrimination: New digital tools could accentuate existing workplace discrimination and increase risks for workers from vulnerable groups. For example, monitoring how many times employees leave their workstation during a workday could discriminate on the basis of religion, disability, or pregnancy status, while the use of sentiment analysis to provide insights into an individual’s facial expressions or body language during hiring risks discrimination based on gender, race, ethnicity, or other physical characteristics.
• Human dignity: The use of digital tools to collect data, analyze signals, and inform decisions raises novel issues around human dignity, autonomy, control, self-worth, and well-being—for example, whether employees should reasonably expect to have their movements tracked as a metric to gauge productivity or whether insights into employee motivation and workplace satisfaction derived from psychological or sentiment analysis are a reasonable expectation of employment.

Furthermore, we note that violation of rights to privacy and non-discrimination impacts other rights too, such as freedom of expression, freedom of assembly, freedom of religion, and the right to favorable conditions of work.

A diverse range of workplaces—warehouses, factories, offices, call centers, mines, entertainment venues, restaurants, transit centers, and homes—will increasingly deploy digital tools, and this both increases the significance of worker data protection and makes it more challenging to realize in practice. We need to consider three key concepts as we endeavor to strengthen 21st-century social contracts in relation to worker data protection.

• Informed consent. Informed consent is defined by both participation (i.e. the ability to participate in decisions) and empowerment (i.e. the ability to understand both risks and rights when consenting). It will be essential that workers are able to provide informed consent for how their data are collected, processed, and used by employers. The formal contracting process that underpins the employer/worker relationship provides a well-defined pathway for providing informed consent, but this may not exist for informal workers.
• Power and vulnerability. There are power dynamics in all employer/worker relationships, and the data-driven digital economy alters this dynamic in significant ways. While the employer has access to an increasing array of data, the most vulnerable workers—those without real options to “walk away”—have the fewest choices open to them and are less able to understand their rights and risks when consenting. Beyond informed consent, this disparity needs to be addressed with clear rules governing what employers are simply not allowed to do.
• Addressing different worksites. The data protection risk-and-opportunities profile will vary significantly across different industries, job types, and workplace environments, including workplaces in the context of new business models, such as gig workers, online sellers, and other novel forms of income generation. These need to be understood individually, for example via assessments into the social, economic inclusion, and the potential human rights impacts of disruptive technologies.

One of the most revealing elements of our research to inform the 21st-century social contract was the lack of international norms for workplace data protection in the context of a data-rich world.  For example, while the International Labour Organization (ILO) published a code of practice providing guidance on the protection of workers’ personal data in 1997, there is no ILO convention or recommendation covering workplace data protection, privacy, and non-discrimination issues in a modern setting.

As the use of workplace technologies evolves, new norms, laws, and regulations will be needed to manage the way disruptive technologies are deployed in the workplace. Technology providers, employers, labor organizations, governments, and civil society organizations all have an important role to play in the dialogue around what these new norms can and should be. As workplace monitoring and surveillance become increasingly commonplace, it will be important for employers to collaborate with labor organizations to define clear boundaries and a social consensus for data protection in the modern workplace.

This piece is the first in a series of blogs exploring The Business Role in Creating a 21st Century Social Contract. Click here to read the full report, to explore the other four principles, and to learn more about how your company can act, enable, and influence to create a social contract fit for purpose.

Blog | Wednesday July 1, 2020

Why Modern Slavery Risks Should Be Top of Mind for Businesses during COVID-19

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Businesses today are facing tough decisions on how to protect their financial viability, serve rapidly changing customer needs, and protect their workforce. The COVID-19 pandemic continues to alter the landscape of the global workforce, forcing millions of vulnerable workers out of work and requiring businesses to make quick and difficult decisions on retaining their workforce and supporting their supply chains through the crisis.

When exploring cost-cutting measures, businesses may unwittingly overlook the human rights impacts of their quick decisions, especially on the most vulnerable workers deep in their supply chain. Through our work addressing modern slavery across supply chains, we have observed an alarming uptick in business actions during this time that may lead to more individuals being forced into conditions of modern slavery, or on the brink thereof. In a joint statement, the Global Business Coalition against Human Trafficking (GBCAT) has urged companies to protect workforces against modern slavery risks when responding to COVID-19.

Below are three key areas in which BSR has noted increased risks of modern slavery:

1. Essential businesses may be inadvertently exposing workers to conditions of forced labor.

Workers who have been able to maintain their jobs with essential businesses may face increased risk of exploitative labor conditions as they experience heightened pressure to work long hours in response to the global demand for goods or to maintain productivity levels despite a reduced workforce. For example, technology companies supporting governments to build digital infrastructure related to COVID-19 or companies producing goods in response to global demand may in their haste subject their own workers and supply chain workers to long hours with little or no overtime pay, which in severe circumstances may amount to forced labor. The use of forced labor has already been well-documented in the production of healthcare products, from masks to surgical instruments, hospital textiles, and rubber gloves.

2. Canceling or delaying purchasing orders may result in supply chain workers losing their livelihoods and accepting precarious work.

Mass order cancellations, non-payment of orders, workforce cuts, and factory shutdowns pose serious repercussions for supply chain workers, many of whom already live below the poverty line. For example, in Bangladesh’s textile industry alone, one million workers already have lost their jobs. Unpaid wages and job losses, particularly in the developing world, make individuals desperate for alternative means of income and more likely to accept precarious and even exploitative work. Women, who represent the majority of low wage workers, are more likely to be unemployed and are particularly susceptible to sexual exploitation or sex trafficking. Migrant workers also may face a heightened risk of debt bondage since many are unable to pay off loans they took out in order to secure a job abroad. Forced into mandatory quarantine once they return home and now unemployed, workers may be forced to take on new debt to cover basic necessities for themselves and their families. Some may continue to borrow, digging deeper in debt, while others may even have family members or children working to pay off their loan.     

3. As the economy recovers, rush orders can create or exacerbate situations of modern slavery in supply chains.

As COVID-19 restrictions ease and businesses recover, business should be attuned to how practices such as tight production windows, last-minute orders and short-term contracts can create or contribute to abusive labor practices that may lead to forms of modern slavery. For example, meeting quick turnaround times or filling last minute orders for a client keen to kickstart financial recovery may subject supply chain workers to excessive working hours and unpaid overtime. In addition, if orders are too difficult to fulfill with the current workforce, suppliers may enlist local temporary workers to support, providing them with short-term contracts which offer little labor protection and limited remedy for abusive working conditions. As immigration restrictions are lifted, suppliers also may rely on labor brokers to provide migrant labor. In many cases, migrant workers are subjected to excessive and illegal recruitment fees, placing these new workers in situations of debt bondage. In all cases, extreme competition for jobs will make workers less likely to report abuses and accept working conditions, even the most exploitative.

Recommendations for Business

As businesses continue to respond and adapt to COVID-19 realities, they should continue to take a human rights-based approach to their decisions. Below are three key actions which businesses should take during and after COVID-19:  

1. Conduct a hot-spot analysis of your operations and supply chain for modern slavery risks.

Businesses should conduct a modern slavery risk assessment to understand the parts of their operations and supply chains which may be most susceptible to modern slavery because of geographic or sector-related risks or because of factors that increase the vulnerability of workers (e.g. use of temporary or migrant workers), especially in light of COVID-19.

BSR has developed a Rapid Human Rights Due Diligence tool to help businesses assess potential and actual negative impacts of their business decisions. GBCAT’s new resource for business, entitled Addressing Forced Labor and Other Modern Slavery Risks: A Toolkit for Small and Medium-Sized Suppliers, enables suppliers to quickly identify areas of their business which carry the highest risk of modern slavery and formulate a plan to prevent and address identified risks.

2. Support suppliers in protecting their workers. 

Businesses should honor existing contracts and consider extending payment and offering credit to vulnerable suppliers and exploring longer-term contracts to protect the financial viability of their suppliers. As work resumes, businesses should engage closely with suppliers and industry associations to discuss realistic timelines and pricing for the delivery of goods and services. Supporting the continuity of suppliers’ operations helps protect its workforce. 

Businesses should also help suppliers to protect their own workforce directly if suppliers are financially unable to do so. This can include providing personal protective equipment (PPE) to supply chain workers and emphasizing the importance of implementing hygiene best practices and safe working conditions (e.g. modifying shifts and limiting workplace traffic). Some other avenues of support include offering to pay sick leave when not provided by the government, compensating workers who have been laid off, and offering emergency funds to workers. Businesses should also collaborate with industry associations or business associations to pool resources if practicable.

3. Provide channels for workers to raise concerns as they go back to work.   

All workers should have access to an anonymous channel to raise concerns to their employer. This is of greater importance now, as some workers have expressed concerns that their employers have not provided them with appropriate PPE. Although travel restrictions inhibit a business’s ability to conduct on-site supplier assessments, businesses can ascertain the working conditions of supply chain workers through an anonymous hotline, direct virtual meetings with supply chain workers, or through online discussion boards where supply chain workers can report concerns and obtain information on their rights. If none of these channels currently exist and it is not practicable to implement them, a business should consider extending its own grievance channel to its supply chain workers.

Fostering open and regular communication with workers both internally and across the supply chain can help your business better understand emerging risks and explore ways to support the most vulnerable workers. Please join GBCAT members in condemning any and all forms of modern slavery and using your influence to help protect those that are most vulnerable during these challenging times.

Blog | Wednesday June 24, 2020

The Business Role in Creating a 21st-Century Social Contract

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Long before the urgent challenges of the COVID-19 pandemic and the long overdue focus on racial justice, diversity, equity, and inclusion changed history, it was clear that our social contracts—the relationship between individuals and institutions—were no longer fit for purpose.  

For much of the second half of the 20th century, the roles and responsibilities of business, government, civil society, and people remained relatively constant and provided vital protections to support healthy and productive lives. But today, people are relying on strained protection systems that fail to keep up with our 21st-century realities. And criticism is on the rise over the value of capitalism and the purpose of business, with the desire to build an economic system that delivers truly shared prosperity while preserving the natural environment.   

BSR launched our contribution to the essential work of modernizing social contracts in 2018. We are committed to taking this work forward, and today we are pleased to present our new report, The Business Role in Creating a 21st-Century Social Contract. 

We are at a hinge point in history where transformation is both possible and necessary. 

In addition to the profound structural changes already remaking our world, 2020 has delivered truly epochal change. At the time of the publication of this blog, COVID-19 has left a global death toll that currently stands at nearly 475,000 people, remade public finances, and threatens to eliminate the equivalent of 195 million jobs around the world. And the tragic murder of George Floyd—and far too many others—is a powerful reminder of the deep structural racism not only in the U.S., but also globally, in addition to other forms of discrimination that continue to plague all societies globally.  

2020 has demonstrated powerfully the importance of a fully functioning social safety net, public health systems, and global collaboration. We see more clearly that the world remains too focused on short-term thinking, leaving us extraordinarily susceptible to shocks that create wide social and economic destruction, with the greatest impacts on the most marginalized groups. In the United States, recent powerful examples of how systemic and institutional racism continues to plague the country, and Black Americans in particular, reinforce the urgency of ensuring a social contract based on more inclusive models and practices.   

We are at a hinge point in history where transformation is both possible and necessary. Reforms to the social contract are clearly needed to protect public health, economic security, and the right of all people to participate fully in society.  

Without a truly modern social contract, the ability of business to innovate and thrive will be compromised.  

There is also a powerful case for business to embrace and contribute to this effort, We believe this work is essential to lay the foundation for business success through increased trust, workforce development fit for the changing needs of business, stable economic conditions, and social consensus on the development and implementation of new technologies and business models. Without a truly modern social contract, the ability of business to innovate and thrive will be compromised.  

Achieving this ambition will require unprecedented collaboration among leaders from all sectors of society: business, government, philanthropy, and civil society, with a goal to define and align on a vision for a post-virus world grounded in equity and inclusion, what the new social contract must deliver, and the roles of each sector in translating that vision into reality. The world is looking for leadership in a time of profound change. Business can and should fully embrace and fulfill its appropriate role by asserting leadership and innovation in its own practices, collaborating with business partners and other stakeholders, and using its voice to call for the public policy solutions that are so badly needed. 

The paper we are publishing today is a first step toward this vision. It speaks both to the underlying structural issues that prompted this effort as well as the new context brought by the pandemic and the renewed call for diversity, equity, and inclusion, not least concerning racial justice. We hope it serves as a foundation for further discussion with companies and other partners about how to make progress. Working together will be critical to achieve these crucial objectives and to turn our current crisis into an opportunity to create models that enable more resilient, fair, and sustainable economic and human development.  

The time is right to pursue a grand bargain that can create a more inclusive economy that enables people to thrive in dignity, preserves the natural world on which we rely, and creates more just and humane institutions that respect the rights of all. With this effort, we can truly meet the moment, and build the future. 

Reports | Wednesday June 24, 2020

The Business Role in Creating a 21st-Century Social Contract

Preview

About This Report

The social contract—the relationship between individuals and institutions—needs an overhaul.

Well before the urgent challenges of the COVID-19 pandemic and the long overdue focus on racial justice, diversity, equity, and inclusion changed history, it was clear that our social contracts were not fit for purpose.

For much of the second half of the 20^th century, the roles and responsibilities of business, government, civil society, and people remained relatively constant and provided vital protections to support healthy and productive lives. But today, people are relying on strained protection systems that fail to keep up with our 21^st-century realities. And there is increasing attention on the need to align the purpose of business with essential societal needs, such as the transition to a net-zero economy; a digital economy that sustains jobs, livelihoods, and economic fairness; and the advancement of diversity, equity, and inclusion.

Blog | Tuesday June 23, 2020

Access to Grievance Mechanisms and Remedy during the COVID-19 Crisis

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Providing remedy for individuals harmed as a consequence of company decisions and actions in response to the COVID-19 pandemic is a critical avenue for addressing not just this moment, but also the deeper inequalities that make our society vulnerable to crisis and for building resilience in the future.

COVID-19 has aggravated existing inequalities, with rapidly changing business operating environments requiring fast decision-making based on often imperfect information. There is little doubt that some company decisions will have caused harm to employees, local residents, or customers. Companies will be held to account and asked to rectify these harms and to fulfill their duties to provide access to remedy, a fundamental pillar of the UN Guiding Principles on Business and Human Rights (UNGPs).

The UNGPs outline the duty of the state, which is to protect human rights, and the responsibility of business, which is to respect human rights. The third pillar of the UNGPs is the requirement to provide individuals whose rights are harmed by business with access to remedy. Effective remedy has five recognized forms of reparation, which include a broad range of measures aimed at repairing the harm caused to survivors and victims: restitution, compensation, rehabilitation, satisfaction, and guarantees of non-repetition.

Access to remedy is the least developed and least well-understood and practiced pillar of the UNGPs and one that deserves more attention in general and should not be forgotten or overlooked during the COVID-19 pandemic, especially now as we move into new phases in our response to the pandemic. To ensure access to remedy during all phases of the COVID-19 crisis, companies should:

• Continue to ensure access to appropriate, independent, and effective grievance mechanisms, including dedicated hotlines, email addresses, instant messaging systems or applications, and letters and other written communication, to the extent possible, during all phases of the pandemic. Some companies will have to think creatively about how to ensure access to legitimate grievance mechanisms, with an understanding that many of the good practices that require face-to-face contact will have to be modified during this time. For all companies, it is important to ensure access to grievance mechanisms to enable reporting of non-compliance with safety measures and guidelines which have been adopted to protect people from COVID-19, not only for isolated communities and marginalized groups, but also for employees and contractors.
• For companies with large footprints, special considerations are needed for those located in isolated or remote communities. Communities with limited access to communications channels, communities which may be economically marginalized or have lower levels of literacy, or indigenous communities often have a greater dependence on person-to-person engagements to lodge complaints or submit grievances. Companies will have to think creatively about how to ensure access to legitimate grievance mechanisms during the global pandemic, with an understanding that many of the good practices that require face-to-face contact will have to be modified during this time and for some time in the future. It may be necessary, for example, to partner with trusted local organizations, like grocery stores and their suppliers, who have legitimate access to communities to gather and deliver grievances.
• Companies that rely on human moderators to review online content flagged for violating human rights and company policies should continue to prioritize reported content that has the greatest potential to harm when dealing with limited content moderator capacity while also ensuring that the data are preserved for future analysis with appropriate privacy controls in place.  These companies should also increase their investment in mental health support and resources for their content moderators, both to ensure their well-being and to adapt to the increased burden of harmful content that may result as a consequence of this global crisis.  
• Companies can avoid causing potential human rights-related grievances through their response to COVID-19 by conducting rapid human rights assessments and other due diligence before making decisions that could negatively impact human rights. This is especially important when rapid decisions are being made in the midst of a crisis, especially one like COVID-19 with potential human rights impacts. For example, companies can ensure responsible disengagement from supplier contracts during the pandemic by conducting rapid human rights assessments. If cancellation of supplier contracts is legal and absolutely necessary (after evaluating all possible options for alternatives), start by formulating a responsible exit strategy in consultation with potentially impacted rightsholders. For instance, ensure that workers and suppliers receive ongoing compensation for the duration of the unemployment or offer trainings and financial capacity building (microcredit) to mitigate loss of employment for workers and other people living in surrounding communities.
• As much as possible, continue with any efforts underway to remediate past harms that the company has caused or contributed to before the pandemic. If appropriate, use company’s leverage to push business partners to do the same.
• As the COVID-19 situation improves, conduct a post-crisis assessment to ensure that all grievances are lodged and assess if and how people have been impacted by company action (or inaction) during the pandemic. Companies will and should be held to account for their actions during the pandemic. Responsible companies will acknowledge harms and provide remedy.

While many restrictions remain in place and extreme caution is still needed, this is a moment when companies should start examining their approaches, both past and current, and ensure they are accountable for their actions. Failure to remedy past harms is not just counter to international standards outlined in the UNGPs—it can also destabilize the business environment whether due to social unrest or increased vulnerability to crisis.

Blog | Wednesday June 17, 2020

Blockchain through the Whole Supply Chain: Traceability Builds Business Resilience

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Over the past year, The Estée Lauder Companies and Aveda have been working with LMR Naturals by IFF, BSR, and Envisible to establish a blockchain-enabled traceable supply chain that identifies opportunities to deliver sustainability benefits to all the actors in the supply chain. This post is the third in a series documenting the journey of this innovative partnership and follows up on a first blog (published in July 2019) and a second blog (published in December 2019). 

COVID-19 has caused shockwaves across global industries as most of us throughout the world experience firsthand the challenges of supply chain resiliency and transparency. From sudden shortages of certain food and household staples to questions about the safety or future availability of certain items based on their source of manufacturing, we are all realizing that we live in an extremely interconnected but paradoxically opaque world.  

At first these shortages could be dismissed as simply a rush of demand that outstrips supply (i.e. panic and hoarding), but as we explore deeper, we can find curious anomalies about the way many supply chains function. A realization begins to emerge that many supply chains are only designed to function within the framework of a globalized society with its multitude of interdependent systems that can be relied upon to predictably function all the time, exactly as expected. And then...the unexpected happens, and it becomes painfully clear that traceability, transparency, and resilience are the only way to ensure a lasting and sustainable business model. 

When we begin to emerge from the shock of the current worldwide health crisis and its impact on the global economy, smart businesses will take this opportunity to reevaluate their supply chains in order to reduce the unknowns that erode resiliency when unanticipated changes occur. This means having a granular understanding of not only your suppliers, but the suppliers of your suppliers and the associated risks to which you are exposed, so that in the future businesses can better anticipate both direct and indirect concerns. 

By taking steps to ensure greater visibility into supply chains before times of crisis, companies gain greater awareness of potential critical disruptions, or other unexpected business concerns, that might arise in the future.

Over the past nine months, LMR Naturals, BSR, and Envisible have been working with The Estée Lauder Companies and Aveda to better understand these issues in a supply chain that starts on a bumpy road in rural Madagascar and ultimately crosses three continents to deliver the vanilla that is an essential component to the many of Aveda’s fragrances and formulas. Our work began long before COVID-19 and involved laying the track for a fully digitized supply chain, with transactions at each point in the chain of custody being immutably recorded on a blockchain using Wholechain. It started as an exercise—a compulsory first step—to facilitate sustainable and responsible sourcing all the way back to a co-op of smallholder farmers.  

This product has enabled The Estée Lauder Companies and Aveda, along with its natural ingredients partners LMR and the local cooperative Biovanilla, to achieve full traceability and greater visibility into the vanilla supply chain in real time. This will enable it to move forward on a path toward obtaining fully sustainably sourced vanilla in Madagascar—a win for the companies and for the cooperative and the farmers with whom it works. 

Now in light of COVID-19, this important work reveals a broader opportunity to evaluate the systems that enterprises have in place to monitor the myriad indirect yet consequential concerns that arise in our interconnected world. 

By taking steps to ensure greater visibility into supply chains before times of crisis, companies gain greater awareness of potential critical disruptions, or other unexpected business concerns, that might arise in the future. So, what are some supply chain lessons we can take away from this work, especially in light of COVID-19? 

• Full supply chain awareness is critical. Businesses need to monitor not only their suppliers but their suppliers’ suppliers in order to truly anticipate risks that might arise. There are solutions even for the most complex supply chains, even for companies with relatively small procurement leverage. 
• Digital verification is increasingly important. Businesses have become all too accustomed to hopping on planes in order to understand issues on the ground. COVID-19 has not only made this impossible for a time, but it has raised our awareness of the risks involved with depending solely on local, physical verification of sourcing locations. 
• There is no reason not to start now. The rise of digital tools and solutions to monitor and analyze certain supply chains could significantly improve transparency and resilience in anticipation of the next global crisis. This will better enable business leaders to understand risk exposure, position themselves to respond to disruptions, and promote sustainability collectively along their supply chains.

The common and appropriate management refrain is to "never let a good crisis go to waste." COVID-19 has been a wake-up call on many levels in our globalized world, exposing economic and social blind spots that will demand collective innovation. If there is a positive result that can emerge from this crisis for businesses, it will be a lesson in resilience: use this opportunity to become better prepared for future unexpected disruptions. A transparent supply chain is one element that business can tackle now.