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Case Studies | Monday June 1, 2009

Sino Gold Implements Action Plan for Community Development in China

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The Challenge

Sino Gold's Jinfeng Mine is an Australian-operated joint venture with the Chinese government that entered production in May 2007. Sino Gold sought guidance on how to build its "social license to operate" by promoting long-term community development in the five remote villages surrounding the mine in the mountains of southern China. Sino Gold contacted BSR for advice on the design of a community development strategy that would go beyond traditional public relations or social marketing efforts to promote real, tangible improvements in people's quality of life.

Our Strategy

We responded to this challenge with a two-stage approach. First, BSR staff from our Energy and Mining team in San Francisco and our Guangzhou, China, office conducted a stakeholder mapping session with mine staff in China, as well as a series of in-person interviews with more than 100 community members and government officials in the area around the mine. By listening to people’s hopes and fears regarding the mine’s impact on their daily lives, we developed a short list of stakeholders’ key “issues of concern.” For example, community members were eager to work at the mine or develop small businesses supplying the operation, but did not always have the necessary education or skills to do so. Government officials were looking for increased opportunities to dialogue with the mine and explore options for collaboration in promoting local community development.

Based on these key issues, we next set out to identify and evaluate international development agencies and other domestic nonprofits as candidates to partner with the mine in the design and implementation of a community development program. Relying on its network, BSR conducted in-person and phone interviews with potential partners and then recommended a short list of domestic and international candidates that would be good development partners for Sino Gold.

Impact

Sino Gold is taking action on the recommendations we presented both in China and at company headquarters in Sydney. Sino Gold plans to establish a multi-year budget commitment for community development at Jinfeng and has begun a dialogue with the recommended development agencies to develop a long-term partnership agreement. Development work in the five communities around the mine is expected to be underway by the end of 2008.

Case Studies | Monday June 1, 2009

Shenzhen’s ICT Sector Strives for Social and Environmental Leadership

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The Challenge

The Foreign Investment Advisory Service (FIAS), a joint initiative of the World Bank and the International Finance Corporation, sought to build the capacity of the Information and Communications Technology (ICT) sector in Shenzhen, China, to meet international social and environmental requirements and improve the "soft" competitiveness of the industry. This in turn necessitated an innovative multi-stakeholder project approach that included a wide range of industry and public sector players.

Our Strategy

Working with FIAS, we designed the project as a multi-stakeholder, cross-sector partnership including the Municipal Government of Shenzhen, the Shenzhen Electronics Industries Association, the Electronic Industry Citizenship Coalition (including HP, Microsoft and Intel), and the Global eSustainability Initiative (including Vodafone, Nokia, Motorola and BT). BSR performed field research and a diagnostic assessment including a root cause and cost-benefit analysis. This research included interviews with a range of suppliers, customers, NGOs and government representatives. BSR and FIAS then held a workshop in Shenzhen and published a detailed report in both English and Chinese that included the key findings and recommendations. The strategy includes specific actions that each stakeholder can implement, such as the need for public-private coordination of Chinese supply chain monitoring, and ICT industry collaboration with the government and civil society on capability building. A second-phase pilot project is being developed to test strategies and activities in the two areas most important to the stakeholder groups: worker engagement and management systems.

Our Impact

The recommendations and capacity-building strategy were specifically designed to be relevant and useful for a wide set of stakeholders. Each group now has the underlying information needed to change their own practices and increase the ability of the sector to improve social and environmental conditions in China. The strategy initially focused on Shenzhen because it is a popular sourcing destination for the sector and the city has already taken steps to improve its CSR practices; but the FIAS project will potentially be expanded to other regions once its effectiveness is tested. The report has been widely distributed and received positive feedback from each group of stakeholders, including customers, government, suppliers, and NGOs. The participation of more than 80 stakeholder representatives at the Shenzhen workshop is a testament to the unprecedented level of commitment and collaboration achieved by the FIAS project.

Case Studies | Monday June 1, 2009

Shell Wind: Community Engagement in a New Era of Energy

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The Challenge

Shell Wind Energy is involved in 11 wind-generating facilities across the United States and Europe, with 550 megawatts of owned generating capacity—saving around 1 million tons of carbon dioxide per year compared to conventional energy sources. Shell recognizes that wind projects can have a range of impacts that require community engagement, and that community engagement is central to positive outcomes. For example, while wind developments in rural areas can support the regional economy, important public services also need to be readied for managing revenues, safety, and communications regarding planned construction and operating activities. Shell asked BSR to support community engagement with wind projects in several locations, including New Mexico and Texas.

Our Strategy

BSR worked with the Shell Wind Energy team to identify a range of stakeholders associated with each of these projects, including community leaders, NGOs, government officials, and local residents. BSR then designed a series of discussion questions and deployed a team to conduct interviews (with anonymity) and obtain feedback on specific concerns, observations, and recommendations regarding the project, the local community, and Shell's track record. Each project typically involved more than 40 interviews and covered topics related to economic development, environmental impact, and community dynamics. While the interviews revealed excitement about harnessing renewable energy, investing in local infrastructure, and reinvigorating business developments, interviewees expressed concerns about how the turbines would impact the natural landscape and affect longer-term community development.

Based on this feedback, BSR crafted a range of recommendations that focused on:

• Expanding direct communications with local residents through newsletters, town halls, and other gatherings.
• Supporting strategic community projects that would match Shell competencies with local infrastructure needs.
• Helping community leaders identify gaps in needed public services and civic planning activities.

Our Impact

While the wind projects themselves are still in various stages of development, Shell has incorporated many of BSR's recommendations in its community relations strategy—in order to maximize benefits both for the projects and the impacted communities. With BSR's assistance, Shell is developing a stakeholder engagement plan to identify the various community stakeholder concerns throughout its development process. One of the most important anticipated outcomes is the development of awareness and capacity at the community level to support effective planning and management of local emergency, housing, water supply, and education services.

Case Studies | Monday June 1, 2009

Promoting Business Engagement in Enhancing Effective Public Governance

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The Challenge

Companies are increasingly finding that the boundaries between public and private responsibilities are unclear. Many CSR challenges flow directly from weak or poor governance, or from a lack of clarity about how to address questions of global significance. Appropriate business efforts to address topics ranging from climate change and labor standards to bribery and corruption are more likely to be successful where effective public governance is present. Indeed, true sustainable economic growth is more likely where governance mechanisms function effectively.

Our Strategy

We have worked with the World Economic Forum (WEF) and numerous companies to generate increased business attention to this dilemma. BSR and WEF have collaborated with 15 companies participating in WEF's Global Corporate Citizenship Initiative to develop support for private sector action on this topic. This initiative aims to raise awareness of the dimensions of this issue and its critical link to sustainable economic development, its importance to business, and examples of action steps business can take to contribute to more effective public governance. Through global dialogues and publications, BSR and WEF have generated support for further business action in 2008 and beyond. This initiative is evidence that our research and development activities are effective in illuminating emerging issues and solutions for the business community.

Our Impact

This effort is intended to increase business awareness of public governance as well as promote business efforts to work alone and in partnership to improve governance. Our goal in this work is to help create conditions in which companies’ CSR efforts can be more effective. It is our sense, and that of WEF, that these efforts can strengthen conditions for economic growth, create opportunities to increase public-private partnerships that build systematic solutions to sustainability challenges, and clarify how multi-stakeholder initiatives can maximize their potential through accountable governance structures.

Case Studies | Monday June 1, 2009

Novartis Pays Social Dividends with Wages

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The Challenge

Novartis needed help meeting its commitment to pay competitive and fair wages—which clearly exceed what is needed to cover basic living needs—and to provide employees with time for family, social activities and leisure. To achieve this standard established in its Corporate Citizenship policy, Novartis must pay wages that cover the market price of a basket of goods and services representing the necessities for an average worker in the countries where Novartis operates. This basket should include reasonable housing, transportation, health care, clothing, nutrition, and education for dependent children in accordance with local standards.

Our Strategy

Since 2003, we have worked with Novartis to calculate the basic needs wages for every country where the company has significant operations. These wages are then used in Novartis' Corporate Citizenship reporting process. Beyond calculating wages, BSR has also researched and implemented improvements to the calculation methodology, reached out to Novartis personnel in many different countries to check the veracity and practicality of the wages, and interviewed academics and other organizations that work on these issues.

Our Impact

Novartis is one of a handful of companies that has committed to paying a living wage to all of its direct employees around the world and that has taken the next, more difficult step of actually establishing a system for assuring that it meets this commitment. Since 2004, Novartis has adjusted the salaries of employees in various countries in line with BSR's living wage figures, positively impacting the lives of many workers and their families. As the living wage program evolves, it will further engage external stakeholders and other companies to not only improve its methodology and implementation, but also to raise the bar for other companies' social policy efforts.

Case Studies | Monday June 1, 2009

Ghana Responsible Mining Alliance

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The Challenge

Ghana is the second largest gold producing country in Africa, and the majority of its population suffers from basic developmental needs. There is a history of conflict around the mining sector in the country and a perception that local communities receive fewer benefits than they should. Two major gold mining companies and USAID/Ghana collaborated to create a tri-partite Global Development Alliance (GDA) aimed at improving the lives of Ghanaians in mining communities. Together they sought the help of BSR professionals to assess the internal capacity of alliance partners and to define key focus areas for Alliance activities.

Our Strategy

A team of two BSR consultants traveled to Ghana to engage with more than 30 stakeholders, including development NGOs, government representatives, local community representatives, the Chamber of Mines, and the Wassa Association of Communities Affected by Mining (WACAM), as well as the three members of the Alliance. The BSR team gathered input, completed additional research, and then developed recommendations for the respective Alliance partner's roles and for three key activity areas:

• Capacity building for local government structures and civil society
• Local economic development through enhanced community livelihood programs
• Development of Ghanaian best practice guidelines for social engagement and management of social issues associated with the mining industry

Our Impact

BSR's input was critical in finalizing the strategy for the Alliance framework and in defining the scope of activities to be undertaken by the Alliance partners. A key outcome of our involvement was alignment of Alliance objectives with local development needs and priorities.

"There was a lot of enthusiasm from the local community," a former participant notes, "and the Ghana Responsible Mining Alliance will be seen as a leading example of innovative and large scale partnerships."

The GDA is currently planned to have a duration of four years and will direct US$10 million from the three partners toward economic development and capacity-building programs in the gold mining regions of Ghana.

Case Studies | Monday June 1, 2009

GE’s Citizenship Report Sets the Bar High

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The Challenge

GE decided to create a reporting strategy that would communicate a global, companywide approach while also encompassing its diverse business lines: GE Money, Commercial Finance, NBC Universal, Infrastructure, Industrial, and Healthcare.

Our Strategy

BSR partnered with GE to create three Citizenship reports (2005, 2006, and 2007) that present for stakeholders the areas in which GE could make the most significant contributions to sustainable development. Key aspects of this strategy included:

• Understanding that GE can make a contribution to sustainable development not just from managing its own operations but, more significantly, by understanding the way in which its products and services can address social and environmental needs such as healthcare, climate change, and the need for clean water
• Implementing materiality assessments for some GE businesses to understand which issues presented the greatest risks and opportunities, and where each business could make the greatest contribution through its products and services
• Identifying key areas for improvement (such as human rights policy) and establishing forward-looking commitments
• Identifying key performance indicators and highlighting new metrics (such as waste and water use) that needed to be tracked

Our Impact

GE is consistently ranked as one of the world's most admired companies. By taking a leadership approach to its reporting, GE is demonstrating how business models can be built so that they create value for both society and shareholders. The GE report is also frequently cited as a best practice benchmark by other companies eager to adopt leading approaches to CSR.

Case Studies | Monday June 1, 2009

IBM Supports Small Businesses in Emerging Economies

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The Challenge

IBM wanted to develop a virtual business incubator for small- and medium-sized enterprises (SMEs) and asked us to help evaluate target markets, assess gaps in current offerings and desired functionality, and identify potential partners. Such an understanding would prepare IBM to develop a solution that best meets the needs of SMEs and maximize the impact on economic development.

Our Strategy

BSR's initial analysis supported a competitive assessment of existing services and identified potential partners. We developed a framework for evaluating capacity-building organizations focused on small- and medium-sized businesses in emerging markets and provided a high-level assessment of SME needs in those markets. Once IBM used this analysis to help focus on the collaboration needs of such businesses, BSR created a framework IBM used to analyze the current offerings and collaboration needs of SMEs in India, Brazil and South Africa, and among women- and minority-owned businesses in the United States. We developed the strategy and tools based on our first-hand experience working with SMEs in emerging markets, our relationships with NGOs and multi-lateral institutions focused on supporting emerging market entrepreneurs or women- and minority-owned businesses, our knowledge and experience working with multi-national value chains and supplier diversity programs, and the specific content knowledge we have from past work in India, Brazil and South Africa.

Our Impact

IBM used BSR’s research to help evaluate potential collaboration partners and later formed a partnership with the International Finance Corporation and its SME Toolkit. IBM also leveraged the report findings and the company's increased understanding of SME needs in emerging markets to shape priorities for tool development. This project is contributing to economic development in communities that currently lack complete access to the market economy. It allowed IBM to leverage its technology strengths to develop tools that provide SMEs with access to peer support, mentoring, best practice sharing, and expertise of business partners. It also tied directly to IBM's business growth strategy: an increased focus on the small business segment as well as key emerging economies.

Case Studies | Monday June 1, 2009

Environmental Services, Tools, and Markets Initiative

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The Challenge

The landmark Millennium Ecosystem Assessment—the most far-reaching ecological study ever undertaken, conducted by over 1,300 scientists around the world—found that 60 to 70 percent of environmental functions, such as natural water purification and flood protection, are being degraded faster than they can be recovered. The private sector, its customers and its suppliers rely on many of these services for consistent supply, business continuity and consumer purchasing power. BSR took on the challenge of identifying and evaluating financial mechanisms that can be applied to these services in order to capture their value through new environmental markets.

Our Strategy

BSR's Research & Development team conducted a due diligence process with numerous stakeholders, nearly all of whom identified “reaching ecological limits” as a key megatrend that should frame our efforts. We then worked to identify cutting-edge approaches to environmental management, focusing on the emerging field of Payments for Ecosystem Services, also known as “Environmental Markets.” We shared our findings in BSR reports and external publications and formed the Environmental Markets Initiative Working Group with five oil and gas companies that provide both financial support and thought partnership. Through this working group, we researched the emerging landscape of new financial mechanisms and published a "Corporate Manager’s Resource Guide to Environmental Markets." In addition, the group will assess the utility and future design of new tools for environmental service identification and valuation. In 2008, the working group will expand its scope of work to include demonstration projects with individual companies, in-depth research into select environmental service markets, and dialogue with policy-makers to ensure a business voice in designing smarter regulation.

Our Impact

BSR's Environmental Markets Initiative has contributed key empirical research through interviews with hundreds of global experts, produced quantitative analyses of market growth, mapped the various initiatives from different sectors and geographies, and facilitated partnerships to align agendas and avoid duplicative work. This demonstrates BSR’s capability to develop highly innovative cross-sector collaborations that leverage the resources of corporations, academia, and governmental institutions.

Based on current trends, we predict that corporate investments in ecological infrastructure will become core strategies for leadership companies within the next five years. By becoming a leading organization in this space, BSR is able to help companies anticipate this new generation of corporate environmental strategy.

Case Studies | Monday June 1, 2009

Defining the Role of Responsible Business in Protecting International Labor Migrants

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The Challenge

An increasingly vital part of the global workforce, labor migrants now comprise approximately 190 million people, or about 3 percent of the world population. These migrants—many of whom are moving “South to South,” between emerging economies—often arrive in destination countries heavily indebted, with limited knowledge of local languages, laws, and culture, and with restricted access to protection. As a result, they are vulnerable to a number of human and labor rights violations, including passport withholding, bonded labor, broken contracts, and nonpayment of wages.

Despite attention to general working conditions in global value chains—and despite the fact that this issue can have a great impact on global businesses—there are no widely accepted and understood guidelines for how multinational companies can help manage the needs of migrant workers. The complex scope of the problem, and its potential solutions, lie beyond the abilities of individual businesses to address.

Our Strategy

With support from the John D. and Catherine T. MacArthur Foundation, BSR launched a two-year initiative to engage business in operational and policy efforts to protect the rights of international labor migrants in global supply chains in South and Southeast Asia, the Middle East, and North Africa.

We began this project by conducting comprehensive outreach to experts worldwide from business, government, civil society, and academia concerning key features of labor migration between emerging economies.

Through this research, BSR identified stakeholder interests and activities, key areas of vulnerabilities for workers, and broad trends in the current system of labor migration between emerging economies. For optimal impact, BSR pinpointed key risks and strategic opportunities for company engagement.

Our Impact

This initiative represented the first effort to engage companies in an analysis of the South-South labor movement and its impacts on global supply chains. In the fall of 2008, we published “International Labor Migration: A Responsible Role for Business” on the nexus of South-South migration and business challenges, such as:

Applying this knowledge, as well as our expertise from more than a decade of supply chain work, BSR built a three-step business engagement strategy that encourages companies to educate themselves, engage with suppliers, and expand their influence through partnerships with government, trade unions, NGOs, and others.

At the BSR Conference 2008, we conducted outreach with international companies through our Ethical Sourcing Working Group and a Conference panel session entitled Migrant Workers in Your Supply Chain: Risks and Opportunities.” More than 40 companies from apparel, electronics, food and agriculture, and media sectors, as well as 20 NGOs and government representatives, expressed interest in joining a Migration Focus Group launched in early 2009 to address the needs of migrant workers in global supply chains.

• Use of third-party recruiters and labor outsourcing companies increases the risk of abuse.
• Migrant workers are unprotected under many national laws.
• Few workers receive adequate predeparture skills training.
• Processes for dispute resolution are often ineffective.