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Blog | Thursday April 21, 2022

Transforming Finance: Priorities for Progress in Advancing Respect for Human Rights

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We live at a time in which both people and the planet face severe and often interconnected threats: the world’s richest 1 percent now has more than twice as much wealth as 6.9 billion people. Nearly 80 million children are subjected to hazardous work, considered a contemporary form of slavery. We are in the middle of the sixth mass extinction in terms of biodiversity and face catastrophic food and water shortages, as well as displaced populations due to conflict and climate change. 

We are at a turning point—an inflection point—for the future we want. Is it a future of rising inequality, discrimination, climate crisis, pandemics, closed borders, and conflict? Or is it a path of resilience, inclusion, justice, peace, and prosperity? 

If we are to achieve the latter, responsible business, including finance, must be part of the solution. By fueling economies, the financial services industry—from asset owners and managers to private equity, venture capital, and banks—has unique leverage to drive systemic change in the global economy so that people’s lives and the health of the planet are at the center.

The unanimous endorsement of the UN Guiding Principles on Business and Human Rights (UNGPs) by governments in 2011 clarified that all companies, including financial institutions (FIs), have a responsibility to respect human rights. The UNGPs provide a responsible business conduct framework that helps companies ground their operations in respect for human rights and guides them in practices to advance human rights internally and across value chains. For example, the UNGPs lay out the human rights due diligence process, which is essential for businesses to identify, prevent, mitigate, and account for how they address negative human rights impacts.

Since their adoption, BSR has witnessed growing recognition among FIs of the importance of the UNGPs for managing their human rights footprint. However, translating commitments into transformative action remains a challenge. In 2021, the UN Working Group on Business and Human Rights (UNWG) found that while there has been progress in implementing the UNGPs, the financial services industry is lagging behind other industries.

A decade after the adoption of the UNGPs, the UNWG released the UNGPs 10+ Roadmap for the Next Decade of Business and Human Rights (UNGPs 10+ Roadmap) in an effort to scale business action on human rights. The Roadmap makes an urgent call to action for FIs to raise their ambitions and pace on human rights—or else efforts to advance sustainable business will be hampered in the decade ahead. It stresses that human rights are central to the ESG agenda—the momentous growth of which is an opportunity to scale progress on human rights across the global economy. 

While the growth of ESG has been a valuable development in efforts to advance responsible business, the ESG movement has notable blind spots and opportunities to improve, particularly in how it addresses social topics. A wave of legislative developments across Europe and beyond reflect this, with mandatory human rights due diligence regulations trending and requirements for financial industry disclosure of human rights risk management emerging.

The time for human rights-respecting finance is now. In our report, "Human Rights Roadmap for Transforming Finance," BSR elaborates on the call to action set out in the UNGPs 10+ Roadmap for FIs, highlighting key areas where progress is needed to tackle global challenges and contribute to new systems grounded in respect for human rights.

Download the Report

The Call to Action

BSR makes the following recommendations that FIs can adopt to integrate human rights into financial activities.

• Adapt Core Business Activities to Respect Human Rights. Adopt robust human rights policies in alignment with the UNGPs, and embed these commitments in FI business models, corporate governance, and business strategies. FIs should also challenge financial and business practices that are inconsistent with human rights and publicly disclose how they manage salient human rights risks. 
• Drive Respect for Human Rights in Financial Markets. Conducting human rights due diligence prior to deal-making, lending, or investing and on an ongoing basis once a business relationship is established is essential. This involves assessing how business decisions impact people, not just business, and using leverage to embed human rights policies and processes among clients and portfolio companies.
• Use the UNGPs as a Compass for Meeting Global Challenges. By conducting human rights due diligence, FIs can better address challenges such as the just transition and digital transformation. FIs should also engage in multi-stakeholder platforms and collective action to tackle systemic challenges, such as societal inequality and weak regulatory environments that encourage a race to the bottom among FIs and other companies.
• Engage and Partner with People Affected by Finance. Stakeholder engagement is vital, and FIs should be innovative in their efforts, considering with whom to engage and how best to engage. FIs should be prepared to engage with critical voices in good faith and should assess client and portfolio companies’ policies and practices regarding stakeholder engagement, using leverage as needed to promote meaningful engagement. 
• Enable Access to Remedy for Victims. FIs are expected to adopt or participate in effective grievance mechanisms that provide a channel for stakeholders to report concerns and adverse impacts connected to their activities and portfolios. Complaints should be viewed not simply as a source of reputational risk to be managed, but as a source of learning that is essential for improved performance, accountability, and social license to operate. 

By addressing these priority areas, the financial services industry can take a leading role in seizing the transformative power of the UNGPs. While these steps will not happen overnight, they represent some of the crucial building blocks to meet stakeholder demands and expectations, avert serious human rights risks, and achieve a more just and sustainable global economy in time for the UNGPs’ 20th anniversary.

Blog | Wednesday April 20, 2022

Four Ways to Advance Mental Well-Being in the Workplace

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As employees gain some respite from the pandemic through the protection offered by vaccines, the mental health issues exacerbated by the pandemic persist among American workers, particularly low-income and frontline workers. In our 2021 blog post on workers’ mental health and our corresponding Roadmap to Promote Mental Well-Being and Resilience, we note that mental health has been a rising concern in the US over the last decade. In fact, it has become such an important public health issue that its impact on the US population—especially in the context of equitable access to mental health services through employment—must be addressed. 

BSR’s new report, “Tailoring Mental Health Efforts for Low-Income and Frontline Workers,” identifies concrete measures that employers can take to protect the mental health of essential workers.

“Mental health is an integral part of health; indeed, there is no health without mental health.”

—World Health Organization

Workers have experienced increasing levels of stress due to the COVID-19 pandemic. Employers often recognize that these challenges negatively impact productivity, absenteeism, and turnover. Despite this, many businesses are still at the stage of determining the mix of mental health offerings to meet the varying needs of an entire diverse workforce, including those of low-income and frontline workers. BSR’s Healthy Business Coalition, in partnership with One Mind at Work, has determined key aspects of an effective workforce mental health program that meets the needs of diverse groups and ensures health equity and inclusion.

The Role of Business

While many employers have begun to respond by deepening investments in workplace mental health and advancing culture change, their efforts are not universal, nor have they led to enough impact for frontline and low-income workers. 71 percent of employers with frontline employees rate themselves as supporting mental health well or very well, but only 27 percent of frontline employees agree.

Why Frontline and Low-Income Workers?

Businesses have made progress on addressing the mental health issues of the average employee. Even so, the needs of frontline and low-income workers are not like those of the average employee. Low-income and essential workers are more likely to experience depression and anxiety. They face time and resource constraints, and their job functions often result in increased stress levels. Essential workers often fear discriminatory treatment and job insecurity if they speak up. Given their circumstances, it is critical that low-income and frontline workers can access corporate mental health offerings. 

Four Ways Employers Can Advance the Mental Well-Being and Resilience of Employees

1. Embed Mental Health into the Organizational Culture

• Develop a holistic mental health response to reach all employee populations.
• Examine how current ways of working can exacerbate risk factors for poor mental health. 
• Approach mental health as a collective priority rather than placing responsibility for action on the individual.
• Build organization-wide policies and programs that tackle stigma and build empathy, such as mental health teams and formal accountability mechanisms.

2. Connect a Broad Continuum of Solutions Rather than a “One-Size-Fits-All” Approach

• Recognize that the mental health support resources offered to corporate executives may not meet the needs of low-income and frontline workers.
• Provide an array of approaches that match employee preferences, needs, and access points, such as providing services to those without access to a computer.
• Provide the flexibility for employees to engage based on their own preferences, schedules, and experiences.

3. Find and Integrate the Right Digital Tools

• Offer virtual behavior health services (known for being flexible and affordable) to low-income and frontline workers.
• Provide digital mental health tools to help address geographic, cultural, network, cost, and time constraints. 
• Find what works specifically for your employees and embed those solutions into a broader mental health strategy.

4. Equip Leaders to Be Active Players

• Empower leaders at all levels with authority, resources, and training to shape an organizational culture that recognizes and supports mental health.
• Provide additional education to line managers on how to support low-income and frontline workers.

Opportunities for Business

The work environment is a major social determinant of health. Companies are directly impacted by the health of their workforce and are uniquely positioned to improve their mental well-being. We encourage companies to make mental health a business imperative and prioritize the mental health of their most marginalized and high-risk employees. 

At the Healthy Business Coalition, we are interested in understanding your company’s primary concerns and challenges facing mental health in the workplace. We can work with you to review current practices and initiatives with the goal of sharing best practices and spurring collective action. We encourage you to reach out with any questions or to find out how to get involved.

Reports | Wednesday April 20, 2022

Human Rights Roadmap for Transforming Finance

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The financial services industry—from asset owners and managers to private equity, venture capital, and banks—has a catalytic effect on the behavior of business and the economy. Its vast range of financial products, services, and client relationships ripples through every industry, value chain, and transaction.

With this backdrop, the industry has enormous potential to create a global economy that puts people’s lives and the health of the planet at the center, while contributing to the realization of the United Nations UN Sustainable Development Goals. Yet efforts to do so must be grounded in an evolved approach to doing business—one that respects human rights, in line with the UN Guiding Principles on Business and Human Rights (UNGPs). 

In the "Human Rights Roadmap for Transforming Finance" report, BSR provides an overview of key areas where the industry must make progress to tackle global challenges and contribute to new financial systems that respect human rights. We highlight the materiality of human rights for financial institutions (FIs) and explain that adopting a human rights approach to finance can strengthen the impact of traditional environmental, social, and governance (ESG) practices. In particular, the report elaborates on the call to action set out in the UNGPs 10+ Roadmap for the next decade of business and human rights for FIs—from adapting core business and driving respect for human rights in financial markets to engaging with people affected by FI value chains and ensuring that victims of harm have access to remedy. The report concludes with next steps for transforming finance.

Blog | Tuesday April 19, 2022

Navigating Emerging Ethical Issues: Lessons from Bioethics, Tech, and Human Rights

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The healthcare sector has constantly grappled with ethical questions at the cutting edge of regulation. This is often the case in the field of bioethics—the study of and response to the moral and ethical questions arising from the research, development, sale, and clinical use of pharmaceutical and healthcare products and associated technologies. How far should we go to save someone’s life? Is it fair to experiment on certain groups of people? Established principles and rules on bioethics (e.g., autonomy, beneficence, informed consent), together with a growing body of industry guidelines, have helped companies to navigate these questions. 

However, the exponential speed of research and biotechnology development presents healthcare companies with ever more complex ethical questions. This challenge has been amplified by the convergence between healthcare and data, technology, as well as growing public scrutiny of the corporate response to the COVID-19 pandemic.

To effectively identify and manage arising issues, companies need robust policies, governance structures and risk management processes—as well as a strong organizational culture. 

A human rights-based approach provides a strong foundation for addressing ethical issues. Drawing on BSR’s work with healthcare and tech companies, and our expertise in applying human rights frameworks to businesses’ ethical challenges, this blog shares some insights on best practices for managing emerging ethical issues in a corporate context.

The Challenge of Uncertainty

What do we mean by emerging ethical issues? This could be any decision or activity that raises new ethical questions of “right and wrong” and challenges a company to define “what kind of company are we?”  Are we comfortable enabling an elderly person’s loved ones to always track their location? Should we pursue a marketing strategy even if it excludes certain people?

Such emerging ethical issues have common characteristics: the actual or potential impacts are not well or fully understood, and regulation and existing policies don’t provide all the answers. The public may not even know yet where it stands, as we’ve seen recently on the question of vaccinating children against COVID-19 or deploying facial recognition in public spaces. Caught between the precautionary principle (“stop until we know it’s safe”) and the pressure to innovate—and with limited time to decide in the face of exponential change—companies must find a way to navigate ethical uncertainty. 

Lead with “Tone from the Top” and Inspire “Bottom-Up” Engagement  

Leadership is essential to set a company’s ambition beyond legal compliance and drive required action. But this is most effective when combined with the engagement of employees, who will need to identify and address emerging ethical issues on a day-to-day basis. We’ve seen the positive impact of CEOs addressing employees directly and honestly on a company’s challenges and building employees’ ethical “muscle” memory via internal “ambassador” networks and informal group discussions on ethical topics.

Healthcare companies—and other companies adopting mission-driven purposes—have the advantage that their employees and leaders tend to be motivated by the company’s societal mission and thus predisposed to engaging on emerging ethical issues. Seize it.

Adopt a Cross-Functional Approach

Emerging ethical issues, especially where healthcare and tech are concerned, do not fit neatly within the defined lines of corporate functions. A new medical device may raise questions about data ethics, public policy around access to healthcare, and end-of-life disposal. A cross-functional approach is required to ensure companies approach emerging ethical issues in an informed way that benefits from multiple perspectives. 

Leading healthcare and tech companies do this well by convening a range of expert voices on their external bioethics advisory committees (including philosophers, theologists, and sociologists) or organizing internal working groups that bring together different functions (e.g., compliance, privacy, research and development, human rights) to identify and discuss appropriate responses to potential emerging ethical issues across the business.

Anchor in Enterprise Risk Frameworks 

Companies should consider their “ethics and compliance” risks in a proactive and future-looking way and include emerging ethical issues (that may not yet present legal or compliance risks) into their enterprise risk management (ERM) frameworks. Although we are seeing progress toward ERM frameworks integrating “ethical” risks to people and the planet beyond legal compliance risks, there is still a ways to go.

In practice, anchoring responsibility for emerging ethical issues in business ethics and compliance functions can enable greater reach and impact across the company by leveraging the established relationships, governance structures, and engagement resources of these risk management functions. A strong and strategically minded ethics and compliance function can also help raise awareness around emerging ethical issues at executive and board levels.

Be Open and Engage External Perspectives

Transparency and open engagement with external experts and stakeholders lead to more informed and accountable positions that avoid groupthink. Advisory boards with external experts are a common feature of healthcare companies and have inspired the development of digital ethics boards in tech companies. It is important to bring independent expertise and external perspectives into a company’s decision-making process, which can also be achieved through ad hoc bilateral engagement with experts and/or through industry and multistakeholder collaborations. 

A recent BSR project revealed that healthcare companies don’t talk about their bioethics challenges externally in the open way we’ve increasingly seen on other environmental and social topics. Tech companies have learned the hard way and are now showing signs of greater transparency regarding what dilemmas they face and how they are resolving them. Healthcare and other companies would do well not to wait for a similar crisis in trust to pivot to a more open culture—as the COVID-19 response has prompted some to do already. 

To maximize the benefits of healthcare and new technologies for society, companies will need strong governance structures and organizational culture to identify and address emerging ethical dilemmas as they arise. The insights in this blog should help build a more resilient business in today’s rapidly changing context, as well as meet growing regulatory and stakeholder expectations on managing social and environmental impacts.

Reports | Tuesday April 19, 2022

Tailoring Mental Health Efforts for Low-Income and Frontline Workers

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As employees gain some respite from the pandemic through the protection offered by vaccines, the mental health issues that were exacerbated by the pandemic persist among American workers. 

BSR’s latest report “Tailoring Mental Health Efforts for Low-Income and Frontline Workers” reflects on key learnings from convenings held by BSR’s Healthy Business Coalition and One Mind at Work. Our members discussed how employers have effectively advanced mental well-being and resilience for their most at-risk employees. 

Key ways business can advance the mental well-being and resilience of employees include: 

• Connecting a broad continuum of solutions
• Finding and integrating the right digital tools
• Embedding mental health into the organizational culture
• Equipping leaders to be active players in building a “healthy business”

At the Healthy Business Coalition, we are interested in understanding your company’s primary concerns and challenges facing mental health in the workplace. We can work with you to review current practices and initiatives with the goal of sharing best practices and spurring collective action. We encourage you to reach out with any questions or to find out how to get involved.

Blog | Thursday April 7, 2022

Rapid Human Rights Due Diligence During Political and Armed Conflict: A Business Response to Ukraine

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BSR is making publicly available a rapid human rights due diligence tool to help with quick decision-making in response to Russia’s invasion of Ukraine.

Russia’s invasion of Ukraine presents the most high-stakes situation for the country since it broke from the Soviet Union in 1991. Russia is acting in violation of international law, international humanitarian law, and a host of international agreements, and it is committing serious abuses of fundamental human rights. As previously acknowledged, Russia’s invasion of Ukraine also raises significant questions for business and illuminates the impact that its actions can have during times of political and armed conflict.

As countries and international organizations are taking rapid actions, both independently and in concert (most significantly by denouncing Russian aggression and imposing hefty economic sanctions), companies operating globally have also acted swiftly. At present, around 500 companies have halted operations in Russia and taken other actions to respond to the invasion. 

While it is becoming more common to see corporate actors exiting Russia or taking other actions in response to the invasion, civil society has started to question how companies are implementing international human rights standards for business while taking such actions. Notable examples include an analysis by the Business & Human Rights Resource Centre assessing business and human rights in the context of Russia’s invasion of Ukraine and an article by Human Rights Watch on how tech companies should prioritize rights in Ukraine.

In our work with member companies on the subject of Russia’s invasion of Ukraine, BSR has provided several specific recommendations, and in particular the need to conduct heightened human rights due diligence. The UN Guiding Principles on Business and Human Rights (UNGPs) expect companies to identify and assess actual or potential adverse human rights impacts and to take appropriate action to address them. Under normal circumstances, companies have weeks, months, or even years to complete due diligence. However, this is not the case during political and armed conflict. 

BSR previously developed a rapid human rights due diligence tool to help with quick decision-making in response to the outbreak of the COVID-19 pandemic in March 2020, using the UNGPs and the various human rights principles, standards, and methodologies upon which the UNGPs were built. The tool has been updated to account for the outbreak of political and armed conflict in response to the Russian invasion of Ukraine. The latest version reflects BSR’s guidance on how to conduct heightened human rights due diligence in conflict-affected and high-risk contexts, insights surrounding the business response, and recommendations to member companies.  

The repercussions of the invasion on business are massive, including immediate to long-term implications on climate and energy transition, global supply chains, economies and geopolitics, and healthcare, as well as on the global financial system, democracy, and corporate citizenship. Russia's invasion of Ukraine also heightens human rights risks for business with operations, supply chains, customers, and users in the region, with concerns including:

• Whether it would be responsible to continue operating in the environment, and how to responsibly exit the region if presence is no longer tenable. 
• In what circumstances a corporate leader should address a political situation, and how such activism (or a lack thereof) might impact employee mental well-being, safety, or security. 
• How to have positive impacts on the human rights of Ukrainian staff members and the broader community and how to support Russian employees to exercise their freedom of expression by engaging in protest.
• How to go above legal compliance to address human rights concerns.

The BSR rapid human rights due diligence tool guides companies through human rights due diligence in urgent scenarios. The tool also makes specific reference to various standards from international humanitarian law and international human rights law.

While recognizing the horror of Russia’s invasion of Ukraine, BSR also acknowledges claims by human rights advocates of the hypocrisy of media coverage of Russia’s war on Ukraine as compared with other conflicts. BSR intends for this tool to also be used in other instances of political and armed conflict, without discrimination.

Download the Tool

Case Studies | Thursday April 7, 2022

Blockchain in Brazil and Sustainable Supply Chains

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Large companies involved in global commodity markets with extensive supply chains and complex procurement systems regulated by multiple-tier trading schemes, often lack visibility beyond their tier one suppliers. The complexity of value chains is exacerbated by this opacity, limiting transparency on the sources of the components and inputs that make up their products, as well as potential areas of risk associated with sustainability concerns.

Emerging technologies such as blockchain can solve ongoing challenges within supply chains. Supply chain networks are often complex, siloed and operate with several disconnections from their management and procurement systems, leading to an overall lack of visibility between actors. Blockchain technology offers a method of data-sharing that allows for the continuation of claims whilst enabling data privacy and trust between actors.

This short case study describes the context and objectives of the blockchain project, as well as the analysis process of the three companies’ supply chains, the technical solutions identified, and conclusions of the feasibility study.

Download the Case Study

Blog | Wednesday April 6, 2022

BSR at 30: A New Strategy for Impact

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As BSR celebrates its 30th anniversary this year, we see opportunities to achieve our mission like never before, in a world that is facing many urgent challenges. 

In this context, we have updated our strategy over the past year. Our new 2025 strategy builds on three decades of experience and achievement and will enable us to maximize impact and accelerate progress toward our mission of building a just and sustainable world, at a time when translating ambition into action is urgently needed, and more possible. We are delighted to share it with our 300+ member companies, as well as our many partners from civil society, philanthropy, and indeed the wider world that shares our vision of a world in which all people can thrive on a healthy planet.

This is a time when just and sustainable business is more indispensable to business leaders than ever before. 

If we have learned anything from the turbulence of the last two years, it is how essential it is for business to develop resilient business strategies. We also know in clear terms how essential it is for business to take decisive action to address the climate crisis and deliver truly inclusive economic progress in equitable societies.

In developing our approach, we have spoken with many of our member companies and other experts in the field. It is absolutely clear that just and sustainable business is now firmly mainstream; even more, it is understood as an essential ingredient in business success and indispensable for tackling the world’s primary challenges. It is equally clear that companies continue to search for the answers that enable exponential progress, with credible, demonstrable impact.

Our Objectives

Through our 2025 strategy, we will be focusing our energies on the major challenges of our time:

• Decisive action to shift to a net-zero economy that preserves nature 
• Inclusive, equitable economies based on social justice and human rights 
• Responsible use of technology to advance socially beneficial innovation, and
• Business transformation to achieve these goals

We will pursue these objectives by expanding our agenda and offerings, emphasizing impact, and building a growing global team.

What We’re Doing: An Expanded Agenda  

In addition to our existing commitments to human rights, climate, equity, inclusion and justice, and sustainability management, we are investing in effort to achieve progress on social justice, ESG governance, and nature. The time is right to ensure that corporate governance evolves to meet 21st-century challenges. To ensure that business commitments are translated into real action to advance social justice, later this spring we will be launching a new Center for Business and Social Justice. And we will be augmenting our efforts to address climate by expanding our work with our members on business and nature.

How We’re Doing It: An Emphasis on Impact

We are focusing our efforts on achieving impact with three principles that guide our work. We aim for impact in everything we do. We build connections between issues, and between business and society, and we provide candid guidance that enables credible solutions. 

Who We Are: A Growing Global Team of Sustainability Experts

Our strategy rests on building an even more talented, diverse, and global team. We aim to exceed 200 colleagues for the first time in 2022, with an expanded international presence in Singapore, the United Kingdom, and Washington, DC—to deliver for our growing cohort of member companies around the world, creating value for business and society. 

In the months ahead, hopefully as in-person gatherings return to enable the personal connections that build creative solutions, we will share more of our thinking. We also are eager to hear from you on how to make the most of our joint opportunity, and to create the collaborative solutions the world so badly needs.

Our world appears seriously broken today. We are facing many interconnected and profound challenges. We approach the next few years confident that strengthened commitments to just and sustainable business can turn the tide. We also see the promise of fundamental change that can build—and rebuild—a world that is truly equitable, sustainable, and innovative. We intend to do all we can, working with you, to deliver on that promise.

Reports | Tuesday April 5, 2022

The Role of Manure Management in Supporting Net Zero Goals in the Dairy Sector

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This report, prepared by the Dairy Subgroup of Transform to Net Zero, presents strategies for how companies across the livestock supply chain can meet methane reduction targets by accelerating the use of existing manure management technologies.

The paper outlines the role of Anaerobic Digesters in manure management, the challenges to scaling adoption, including financial, regulatory, GHG accounting, reporting and claiming, and possible paths forward.

Reports | Monday April 4, 2022

Human Rights Impact Assessment on Meta’s Expansion of End-to-End Encryption

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