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Blog | Tuesday January 2, 2018

The First 2018 ‘Year in Review’

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Here is the very first “year in review” you will read for 2018.

Yes, 2018.

This is not exactly a forecast, and it is also not exactly a wish list. This is a view of a year that will see the business community make even greater progress toward the promise of 2015’s twin achievements of the SDGs and the Paris Agreement. It is my hope that, when we look back at this year, we are celebrating these accomplishments and others as key milestones in our pursuit of a more just and sustainable world.

• Collaboration: 2018 was a year when collaboration took center stage. Each of the leaps forward taken in 2018 reflected or created new collaborative initiatives to take impact to scale. Indeed, the year saw the rise of a new entrant in the C-suite, the Chief Collaboration Officer, a position that appeared at the top of the list of emerging corporate positions for the 2020s. In addition, we began to see more companies from Asia, Latin America, and Africa play leading roles in global collaborations, as their engagement continues to rise to meet their increasing global influence and stake in the outcomes.


• Human Rights: In connection with the 70th anniversary of the Universal Declaration of Human Rights, businesses have continued to deepen their commitment to the UN Guiding Principles; have brought a human rights lens to the development, marketing, and application of new technologies; and have used their voices to reinforce the private sector’s interest in protecting human rights and civil society, reversing those trends of opposition to human rights principles that caused the previous High Commissioner of Human Rights, Zeid Ra’ad al-Hussein, to decline a second term.


• Climate: Business continued to demonstrate strong momentum in the shift to an economy powered by clean energy. At the Global Climate Action Summit in San Francisco in September and COP24 in Poland in December, the number of businesses committed to science-based targets and 100 percent renewable energy continued to skyrocket, well beyond the numbers expected in the immediate aftermath of the Paris Agreement. This served to strengthen the resolve of national governments to raise ambition as we head toward 2020. Innovations in energy storage appear poised to accelerate the uptake of renewables even further. Meanwhile, while unfortunately extreme weather events have continued apace, this has mobilized public opinion and created a new business coalition to advance climate resilience, including in the U.S., where cities and states have stepped in to fill the void left by the federal government.


• Women’s Empowerment: In the wake of the wave of sexual misconduct revelations in the U.S. in 2017, sexual harassment rapidly became an urgent issue for corporate boards, with a growing movement on the part of boards to expand the representation of women to 50 percent by 2020. There were signs of the #MeToo movement going global, with women’s marches (attended also by large numbers of men holding #NeverMe signs) held internationally and an increasing number of women speaking truth to men in power around the world.


• Inclusive Economy: With ongoing debate over automation and the future of work, companies, experts, and trade unions created a Global Commission on the 21st Century Social Contract to develop a consensus on tools that policymakers, businesses, and educators could undertake to ensure people’s access to employment. Businesses called for a new social compact fit for the 21st century, with lifelong learning, transition assistance, and access to social protections designed for today's demographics, workforces, and economies. Indeed, there began a movement to establish SDG18: a commitment to a just transition for workers displaced by new technologies.


• Supply Chain: We saw new thinking about supply chain sustainability this year, with companies leveraging blockchain technologies and worker voice tools on an unprecedented scale. Indeed, responsible regional sourcing hubs have emerged as a best practice, with social and environmental responsibility built in from the ground up. Moreover, major companies have taken visible steps to meaningfully incorporate climate resilience throughout their supply chains.


• Governance: More and more companies adopted the recommendations of the Task Force on Climate-Related Financial Disclosure and went beyond them to consider more deeply how their future prospects are tied to resilient business strategies, including the full suite of factors previously considered to be “non-financial.” Investors, following the lead of pension funds and sovereign wealth funds, have fully embraced the credo “Long Term Thinking Is Our Fiduciary Duty.”

2018 will be remembered as a year when the contours of a new global economy began to come into sharper focus. Businesses, working with their partners throughout their value chains, in civil society, and in government, demonstrated both commitment and action.

All in all, 2018 was could be a great year.

Blog | Tuesday December 19, 2017

2017: The Year the C-Suite Got Woke?

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The final big sustainability event of 2017 wrapped up just last week: The One Planet Summit convened by French President Emmanuel Macron just outside Paris. It delivered some important commitments designed to make good on the promise of Paris (more on that below), and it inspired me to reflect on all that has transpired over the past 12 months. 2017 overall is a year that will be remembered for two things: political turmoil and a new voice from business.

The West continues to be shaken by the election of Donald Trump and Europe’s own challenges of Brexit, security, and migration. Globally, the space for civil society is shrinking in the face of crackdowns by numerous governments in all parts of the world. In just the last quarter of the year, the United States has been rocked by deeply troubling revelations of widespread sexual harassment, leading—one hopes—to a cultural shift that will render such misconduct a thing of the past.

It is easy to focus on these challenges (which are indeed very large), but 2017 was also a year when business leaders helped to assert a steady hand, contributing leadership where it is badly needed.

In the United States, the voice of business has been heard far more often than is usually the case. CEOs and other business leaders spoke swiftly and overwhelmingly in favor of America’s staying in the Paris Agreement; in opposition to the immigration ban established by the White House; and at many points in favor of fair treatment of women and the LGBTQI+ community. Notably, the business advisory councils established by the Trump administration collapsed in reaction to its apparent coddling of the extreme racism on display in the streets of Charlottesville, Virginia. 2017 may well be considered the year when the C-suite, to use the word we heard so much this year, got woke.

Words are important, and this year they have been more important than ever. But actions are what we really need.

This year brought many signs of important business action. Globally, business remains deeply committed to addressing climate change. At last week’s Summit, new commitments were made by AXA on divestment from coal and oil sands; two dozen companies joined the Powering Past Coal initiative led by Canada and the United Kingdom; and more than 230 organizations expressed their intention to adopt the recommendations of the Task Force on Climate-Related Financial Disclosures. As President Macron stated last Tuesday, the world is moving too slowly; nonetheless, there is a great deal of action, and it is accelerating.

Progress has been made on other fronts as well. In addition to what we sincerely hope will be a turning point on sexual harassment, new steps have been taken to empower women around the world. Several companies, including Johnson & Johnson, Google, Mars, Microsoft, and Unilever launched the Unstereotype Alliance in partnership with UN Women—a new global alliance set to banish stereotypical portrayals of gender in advertising and all brand-led content. And more than two dozen companies, including Levi Strauss & Co. and TD Ameritrade, have expressed their support for the protection of family planning services in the face of the potential loss of these rights in the United States through Planned Parenthood’s Business for Birth Control effort.

The UN Forum on Business and Human Rights showed record turnout this year, and many companies have expressed their intention to continue taking and communicating action on conflict minerals despite the withdrawal of regulations under the U.S. Dodd-Frank law. In other contexts, legal provisions on supply chain and modern slavery continue to expand.

This was also a year when new issues emerged and became more important, as we outlined in our report on The Future of Sustainable Business. More and more, the future of work, climate resilience, and the human rights impacts of new technologies are being discussed in board rooms. Solutions are not yet here, but we can see growing recognition that the profound changes are reshaping business as fundamentally as they are disrupting the “old economy.” For 2018, we hope that more decisive action will begin to flow from this awareness.

In a year with lots of unrest, there is much the business community did to speak out when needed and apply its resources to the world’s most pressing challenges. This is not to say that the private sector got it right all the time. Big issues remain, and corporate missteps occurred this year as they do every year. Even now, traditional business associations have continued to lend support for a deregulation agenda in the U.S. that undercuts the very sustainability commitments from the private sector that have become mainstream.   

Looking ahead, the massive shifts in our world will continue to define not only sustainability, not just business, but in fact everything, from our daily routines to the building blocks of the world’s economy. How business responds to—and better yet, shapes—these tectonic shifts will define the years and decades ahead.  We will turn to that, and what BSR will be doing to meet this moment, early in the new year.

For now, let us celebrate the leadership business exerted in 2017, and use that as a springboard for positive change in the year to come.

Blog | Monday December 18, 2017

Surveying the Human Rights Landscape: The Evolving External Environment

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This is the second of a three-part series featuring our human rights experts’ reflections on the evolving business and human rights landscape in 2017, as well as their perspectives on emerging issues we anticipate in 2018.

Margaret Jungk, Managing Director, Human Rights (San Francisco)

Climate change, corruption, and tax evasion aren't usually thought of as human rights issues by lawmakers or the public, much less companies. But increasingly, that is changing, and I think this is an important trend to reflect on.

The expanding application of human rights seems to be driven by two things. First, human rights language highlights the direct, individual, and, well, human impact of things like climate change and tax evasion. Global trends do not occur in some cloud over everyone's head. They have real consequences on very real, often very vulnerable people, and this new way of talking about global issues highlights those impacts. Second, human rights language generates more traction and attention. For years, people said that there was no way to make something like tax avoidance by companies 'sexy,' and global citizens would never protest in the streets or write to their congressperson to address it. This new language contradicts that view, and has allowed advocates to shine light on complicated, long-term, and technical issues that went unnoticed for far too long.

Peter Nestor, Associate Director (San Francisco)

My key observation from the past year is the pace at which binding legal instruments now require companies to understand and manage their impact on human rights. More governments around the world are imposing legal requirements for human rights due diligence, reporting requirements, and responsibilities for human rights management in the supply chain.

In-house legal counsel are taking a fresh look at their human rights obligations, from a legal compliance standpoint as well as from a human rights perspective. The scope of responsibility is becoming clearer, and leading companies are testing new bounds of what's possible when companies manage, report, and proactively improve their human rights performance. BSR works increasingly with in-house counsel and outside law firms like White & Case to ensure that their lawyers are properly trained in advising corporate clients on human rights. My prediction for next year is that we'll see more lawyers embrace their expanded role as human rights advisors within companies.

Alison Taylor, Director, Sustainability Management (New York)

In 2017, we saw supply chain oversight come of age—particularly as a result of the U.K. Modern Slavery Act. The Act itself isn't perfect, but it is built on the presumption that companies are responsible for managing not just risks to operations, but also the impacts of those operations. Even where the Act falls short on enforcement, companies have received the message, loud and clear, that more laws like this are in the pipeline, and they have started seriously grappling with the impact of their external relationships. The human rights field’s focus on impact presents a core challenge to attempts to incorporate human rights into current compliance approaches. Practitioners will need to work hard to ensure companies maintain this focus, as it requires new thinking and frameworks.  

This new landscape is extremely challenging for companies to navigate. At the moment, there is no standard good practice approach, and companies are also grappling with tradeoffs between transparency and liability when they try to openly acknowledge their challenges. But the expansion of corporate responsibility to issues like prostitution and victims' rights, even at the domestic level, sets a precedent that can be expanded.

Farid Baddache, Managing Director (Paris)

I found it very encouraging that over the past few years, we've seen so many organizations strengthen human rights into existing regulatory and business frameworks. Things like the IFC Sustainability Framework and Performance Standards, OECD Guidelines on Multinational Enterprises, ISO26000, Bilateral Investment Treaties, and stock exchange listing requirements may not earn headlines when they are updated or their requirements are tightened. Yet in 2017, these frameworks constitute the invisible architecture within which companies operate, and thus, the private sector takes them increasingly seriously. All of these structures are increasingly recognizing, and requiring, human rights protections. 

It's something businesses are watching very closely, especially as they look to 2018 and more legislative developments on the way. In 2018, a company with more than 500 employees based under the EU Non-Financial Reporting Directive will have to report on human rights (this will be true for companies with more than 250 employees in some countries). Companies impacted by the U.K. Modern Slavery Act across the value chain will have to report on risks and mitigation plan for the second year—supplemented by a similar initiative from Australia in 2018. The largest German companies are expected to report to government on their human rights due diligence efforts in compliance with Germany’s UN Guiding Principles on Business and Human Rights Action Plan. French companies will have to disclose detailed due diligence reports in response to the 2017 Duty of Vigilance Law.

Soft law and hard law are converging to build an operating environment that asks companies to conduct robust documented due diligence, act upon the findings, and build trust in their capacity to mitigate risks by doing good business with respect to their human rights duties.

Roger McElrath, Associate Director (San Francisco)

The issue of living wages continues to gain momentum in policy discussions and corporate approaches to managing human rights. An adequate standard of living is a core element of human rights, and thus the concept of living wages is well established in the foundational instruments that set the parameters of international human rights.

Multinational corporations have come under increasing stakeholder pressure to address the issue of the adequacy of wage levels for their own employees as well as workers in their supply chains. There are challenges for companies in implementing living wage programs for their own employees, and the issues and complexity are equally significant when considering how to support living wages for workers in supply chains by exerting influence over their suppliers’ wage setting processes and/or host country laws and regulations.

In 2017, BSR has been actively involved in the implementation of living wage programs for a growing number of companies across a range of industries and locations spanning more than 100 countries, and our work includes establishing the scope of a program, creating internal management frameworks, calculating living wages, and engaging with country offices and external stakeholders. As the world of work continues to evolve as a result of old drivers, like global competition, and new drivers, like artificial intelligence, the issue of the adequacy of incomes and standards of living will bring even more attention to companies and the question of whether or not they and their suppliers are paying living wages.

Blog | Friday December 15, 2017

In Case You Missed It: Noteworthy BSR Insights of 2017

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As the year draws to a close, we are taking a moment to reflect on the turbulent year that has been 2017. In addition to the top blogs and reports of the year, we wanted to share with you some of our favorite series and stories that you may have missed.

Our first series of 2017 was on shared solutions to global challenges. It explored outcomes and impacts of our work with partners and through our Collaborative Initiatives. As part of this series, we launched two new efforts—Building Responsibly and the Future of Reporting initiative.

We also ran a series on the business case for climate action, in partnership with We Mean Business, that dove deep into corporate energy management trends, business resilience in the face of extreme weather, and the influence of global value chains on climate action from business.

During Climate Week NYC, we brought these two themes together in a series on climate and collaboration, with our thoughts on new climate leadership to realize the Paris vision; the need for radical collaboration, inside and outside of companies; and company examples of collaborating to achieve climate leadership. In short, we are seeing collaboration on a massive scale across all sectors, including and especially from business, to achieve the objectives articulated in the Paris Agreement.

We also sat down with the practice leads from each of our areas of expertise—climate, human rights, inclusive economy, supply chain sustainability, sustainability management, and women’s empowerment—to talk about the future of sustainable business in a Q&A series. Their thoughts also helped inform our report on The Future of Sustainable Business, which we released in October.

We published quite a few insights outside these series that are worth revisiting, too. Here are some of my favorites:

• To feel inspired by successful pilots to promote women’s health and empowerment, read Dorje Mundle’s Innovative Financing for Sustainability at Scale.
• To give your brain a workout by thinking through the human rights implications of artificial intelligence, and specifically what remedy should look like for decisions made by machines, see Remedy against the Machine from Dunstan Allison-Hope.
• To remind yourself why you bring your values to your day job, and why business leadership on diversity and inclusion is more important now than ever, read Now Is the Time to Examine (and Re-Examine) Your Commitment to Diversity and Inclusion from Aditi Mohapatra.
• To learn about (and then explore!) a tool to help you empower women in your business, check out A New Tool to Help Close the Gender Gap by Lauren Shields.
• To get excited about the transportation innovations that will revolutionize the way we get from point A to point B, as well as their sustainability implications, enjoy Sustainability on the Move: Transportation Innovation by John Hodges.

What was your favorite BSR content from the past year? Connect with us on Twitter @BSRnews to share.

Blog | Thursday December 14, 2017

The Top BSR Insights of 2017

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To close out the year, we looked through our archives to see what insights from our sustainability experts you most enjoyed reading. Common themes appear throughout: a focus on futures thinking, increasing consumer demand for sustainability, new expectations for ethical and sustainable business, and the importance of continuing work to empower women.

Here are the most-read BSR blogs and reports of 2017.

Top Five Blogs of 2017

1. HERproject at 10: Celebrating HERsuccess, Inspiring HERfuture
   By Christine Svarer, HERproject Director 
   On International Women’s Day this year, we took a moment to think about what we have achieved with HERproject over the past 10 years and what we have left to do.
    
2. Introducing the Sustainable Futures Lab
   By Jacob Park, Sustainable Futures Lab Director 
   In September, BSR launched the new Sustainable Futures Lab, a new practice that will conduct research on horizon scanning and big data and offer consulting on scenario planning and “future-proofing,” all to meet the increasing needs for futures thinking.
    
3. Investors, Consumers, and Markets Demand Climate Action: Four Trends for Your Business to Know
   By Emilie Prattico, Former Manager
   Here are four business-driver trends that you should know as you explore how to implement climate strategies that support a low-carbon economy.
    
4. The State of Sustainable Business in 2017: Results from the Ninth Annual BSR/GlobeScan Survey
   By Laura Gitman, Senior Vice President
   Data from this year’s State of Sustainable Business Survey indicate that there is no question if business will lead on climate change, inclusive growth, human rights, and other sustainability priorities. Now we must answer how.
    
5. When the Business Case and Shared Value Aren’t Enough
   By Laura Gitman, Senior Vice President
   Yes, businesses have to earn profits and provide a return to their investors, but has the focus on a business case for everything undermined what it means to be a good corporate citizen?

Top Five Reports of 2017

1. Big Brands, Big Impact: A Marketer’s Guide to Behavior Change
   By Elisa Niemtzow, Managing Director; Edwina McKechnie, Manager
   In this report, we explore how companies can trigger simple behavioral shifts that enable more sustainable lifestyles, grow demand for more sustainable products, and create business value. It also offers insights on how sustainability teams can more readily engage with internal marketing colleagues.
    
2. The Five Levels of an Ethical Culture
   By Alison Taylor, Sustainability Management Director
   This working paper highlights the five levels at which business can build an ethical culture: at the individual, interpersonal, group, intergroup, and inter-organizational level.
    
3. The Future of Sustainable Business
   By Aron Cramer, President and CEO; Jacob Park, Sustainable Futures Lab Director; Eric Olson, Senior Vice President; Elisabeth Best, Communications and Marketing Manager
   The time is here for a new approach to sustainable business. Business as usual won’t get the job done—and sustainability as usual won’t suffice. This paper offers our thinking on where to go next and kicks off the conversation for 2018 and beyond.
    
4. Empowering Female Workers in the Apparel Industry: Three Areas for Business Action
   By Christine Svarer, HERproject Director; Racheal Meiers, Former Director; Berkley Rothmeier, Manager
   This business brief proposes three areas where apparel companies can build from a strong foundation to better drive improvements in outcomes for women workers and promote women’s economic empowerment around the world.
    
5. The Supply Chain Leadership Ladder
   By Tara Norton, Managing Director; Meghan Ryan, Manager; Jeremy Prepscius, Asia-Pacific Vice President
   This working paper introduces the Supply Chain Leadership Ladder, a maturity model for supply chain sustainability programs that companies can use to develop their program toward deeper impact.

Blog | Sunday December 10, 2017

Surveying the Human Rights Landscape: Collaboration on the Rise

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In honor of International Human Rights Day, we are kicking off a three-part series featuring our human rights experts’ reflections on the evolving business and human rights landscape in 2017, as well as their perspectives on emerging issues we anticipate in 2018.

In 2017, BSR’s team of human rights experts tackled close to 50 projects and collaborated with more than 80 companies around the world. We worked on everything from empowering women in factories to conducting human rights impact assessments and establishing grievance mechanisms.

As this exciting and busy year draws to a close, I asked my colleagues to reflect on what we've learned in 2017 and what it means for the year ahead. 2018 will be the 70th anniversary of the Universal Declaration of Human Rights (UDHR).

At this time 70 years ago, the UDHR drafters were hard at work, formulating fundamental concepts like whether women should have equal rights at a universal level, or whether it should be left to national level cultures and preferences. It can be easy to fail to appreciate the inspiration (and guts) it took to produce a document like this at a global level, but over the next year, we plan to reflect on the progress the human rights field has made and explore those topics that are likely to define the next 70 years of work in this space. 

—Margaret Jungk, Managing Director, Human Rights, BSR

Dunstan Allison-Hope, Managing Director (San Francisco)

For me, a big development in 2017 has been the growing interest in the social, ethical, and human rights implications of disruptive technologies, such as artificial intelligence (AI). For example, we have seen the creation of the Partnership on AI and the publication of new AI principles by the Software and Information Industries Association and the Information Technology Industry Council. The annual UN Forum on Business and Human Rights hosted a track on technology and human rights for the first time this year, where we ran a discussion on realizing access to remedy when decisions are made by machines rather than people. We hope that this interest in human rights and technology extends beyond the technology industry to other sectors that use technology.

Ouida Chichester, Manager (San Francisco)

In my work in 2017 on women’s empowerment and human rights, from sub-Saharan Africa to Latin America, I increasingly saw the language of human rights being used by communities when engaging with companies. Communities, even very remote ones, are becoming ever more adept at using the discourse of human rights to present their interests to companies.

This is likely in part the result of increasing international NGO efforts to train communities in the use of human rights language and the UN Guiding Principles approach. These trainings include things like using mobile phones to document and report abuses. You no longer hear women saying things like, "The security guards around your company are making me feel unsafe and unable to move about in my own community without harassment." Instead, you hear them invoke the stronger human rights language: "This is about my rights—and these security guards are infringing upon my freedom of movement." The companies that are learning that language alongside the societies where they operate are much better equipped to deal with community concerns and challenges, and are better able to address human rights risks and take proactive steps to protect and promote human rights.

Salah Husseini, Manager (New York)

Companies are ambitious entities, and if the last 15 years demonstrate anything, it is that when a company sets its mind to something—self-driving cars, instant deliveries, a phone that can scan your face—it can make it happen. This is why I'm excited to hear so many companies expressing an ambition to work with their industry peers to effect systemic change on human rights rather than take an individual approach. Human rights violations don't take place in a vacuum, and a unified company approach to issues like privacy, complicity with authoritarian regimes, or decent working conditions could change the world overnight. I know that sounds idealistic and impossible. But hey, 15 years ago, so did having your entire music collection in your pocket.

Jean-Baptiste Andrieu, Associate Director (Paris)

I observed in 2017 that a global coalition of actors are working intensely on the issue of recruitment and migrant workers. The link between unethical recruitment practices—the payment of fees in particular—and forced labor has been clearly established. NGOs, academics, unions, and companies now share a common understanding of the importance of tackling this issue. With so much interest, a lot of initiatives have emerged, many reports have been written, and tools have been developed. This is a good thing! In 2018, it will be important to ensure that solutions to this issue are not duplicative and are mutually reinforcing. One solution could be to build a coalition of collaborations promoting responsible recruitment practices. BSR’s Building Responsibly will be willing to contribute.

Michaela Lee, Associate (San Francisco)

There is an African proverb that says, “If you want to go fast, go alone. If you want to go far, go together.” For years, companies have dealt with human rights issues on an individual basis, often due to having nascent or under-resourced programs that get caught up in putting out fires. Today, a greater number of companies have stable programs that have allowed them to refocus efforts on untangling the more complex human rights issues underlying their value chains. This increasing capacity and ambition is fueling the continued development of collaborative initiatives to tackle intractable issues.

Over the past 15 years, we've seen an exponential increase in the number of collaborative initiatives and successful case studies that demonstrate the efficacy of collective action. Collaborations that came out at the turn of the century—the Voluntary Principles on Security and Human Rights and the Fair Labor Association—have filled governance gaps and advanced the human rights field. These established initiatives will continue to amplify business efforts even as new collaborations—like this year’s Building Responsibly and the Responsible Labor Initiative—pop up to tackle other issues. I look forward to the strengthening of collaborative efforts in 2018 that will help us "go far" and "go together."

Blog | Wednesday December 6, 2017

Remedy against the Machine

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How can we ensure access to remedy when decisions are made by machines rather than humans? This was the complex question that BSR and the International Corporate Accountability Roundtable (ICAR) considered in our joint session at the UN Annual Forum on Business and Human Rights last week.

By vastly improving our analytical capability, artificial intelligence (AI) has the potential to address some of humanity’s most pressing challenges, including those relating to healthcare, education, transportation, counter-terrorism, and criminal justice. However, as we have noted in our new primer on top human rights priorities for the ICT industry, AI brings with it new and previously unforeseen human rights risks on topics as diverse as non-discrimination, privacy, child rights, freedom of expression, and access to public services.

For example, using AI when making sentencing decisions in courts, providing access to credit, or identifying potential terrorists can result in discriminatory decisions. Using voice recognition-based AI devices can bring implications for privacy rights and child rights, while some have articulated concern that machines making decisions about whether social media posts comply with terms of service could negatively impact freedom of expression.

The third pillar of the UN Guiding Principles on Business and Human Rights (UNGPs) establishes that access to remedy should be provided for victims of such violations. Our session considered three new challenges for securing access to remedy in the context of AI:

1. Guaranteeing remedy when violations result from decisions made by machines and algorithms, rather than humans
2. Providing operational grievance mechanisms when there are hundreds of millions of rightsholders and billions of decisions
3. Safeguarding access to remedy when dozens of companies, rather than a single corporate actor, are linked to a human rights violation via the interaction of different AI-based products and services

While these discussions can seem hypothetical, technologies are moving fast, and companies from all industries are rapidly integrating AI into their products, services, and operations.

Microsoft Vice President and Deputy General Counsel Steve Crown raised the challenges of knowing when a harm has taken place, identifying who might be at fault, and defining a remedy that can return the victim to their previous state. Crown provided the example of a young woman who was targeted with advertisements based on retail data analytics suggesting she was pregnant—and her father discovering this fact from direct mail, rather than from his daughter. In this case, had a privacy violation taken place, what remedy might be appropriate if it had, and how could the company stop it from happening again?

Sandra Wachter, a researcher in data ethics at the University of Oxford and research fellow at The Alan Turing Institute, surfaced the notion of a “right to explanation” that might come into force under the new European General Data Protection Regulation (GDPR) in scenarios when decisions are made by machines, such as access to credit or employment opportunities.

However, Wachter highlighted that this right in the GDPR disappears once a human is involved in the process—even if the human is involved as a rubber stamp—and that many companies will oppose revealing detail about decision-making algorithms as being commercially confidential. Sandra proposed an alternative “right to explanation” model based on counterfactuals that describe facts that lead to that decision (such as income or educational achievement, for example) that may offer meaningful information to rightsholders, without the need to convey the internal logic of an algorithm. Sandra also spoke in favor of an independent watchdog to scrutinize companies and ensure accountability.

Google Free Expression and Human Rights Counsel Alex Walden spoke about how machines are being deployed to assist with judgments about controversial content uploaded by internet users, such as hate speech and terrorist content. These machines can be especially helpful given the sheer volume of content uploaded—but while machines can sift through huge volumes of content to identify cases, only humans have the necessary understanding of context and language to make final decisions.

A theme running throughout was the notion that AI is going to play an increasingly important role in our lives, and that it is going to be used by many industries, not only technology companies. Overall, I reached three conclusions about the application of the UNGPs in the age of AI.

First, it is important that the human rights implications of AI are understood by all sectors of the economy—such as retail, financial services, energy, healthcare, transportation, infrastructure, and the public sector.

Second, we should consider access to remedy through the lens of the rightsholder. AI is extremely complex, and only a very small number of people in the world know how it works. If AI is to fulfil its potential while mitigating accompanying risks, it is essential that civil society, rightsholders, and vulnerable populations benefit from channels to participate meaningfully in discussions about its application and have access to remedy. The professional communities engaged in the development of AI would benefit from a deep understanding of ethics issues and rightsholder perspectives, as is beginning to happen through initiatives such as Partnership in AI and AI Now.

Finally, there is a need to assess whether the access to remedy being developed in the context of AI meets the remedy effectiveness criteria set out in the UNGPs, such as being legitimate, accessible, predictable, equitable, transparent, rights-compatible, and based on engagement and dialogue.

Answers to these questions will only arise over time (unfortunately, we can’t just ask Alexa, Siri, or Cortana!) and with the identification of use cases demonstrating how effective remedy can be obtained. We look forward to the opportunity of working with our member companies from all industries to explore these important conversations further.

Blog | Tuesday December 5, 2017

The One Planet Summit Will Kick Off a Year of Focus on Climate Results

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On December 12, the two-year anniversary of the adoption of the Paris Agreement on climate change, French President Emmanuel Macron, UN Secretary-General António Guterres, and World Bank President Jim Yong Kim will jointly convene the One Planet Summit. Its focus—public- and private-sector finance in support of climate action—is a reminder that to reduce emissions and to build climate resilience, we will need to channel international funding toward low-emissions and climate-resilient development. One of the three stated objectives of the Paris Agreement is to do precisely that.

Over the past two years, momentum in the business community for climate action has grown. The BSR/Globescan 2017 State of Sustainability survey shows that climate change is now the top sustainability priority for business, along with human rights. Through the We Mean Business coalition’s Take Action campaign, more than 620 companies, with a total market capitalization of more than US$15.5 trillion and 2.31 gigatons of annual greenhouse gas emissions reported in their direct operations, have committed to bold climate action to date. However, in order to limit global temperature increases and build resilience to address the inevitable impacts of climate change, all of us—companies, investors, government actors, and other stakeholders—need to work together to go further, faster.

The financial system has a key role to play in accelerating the transition to a low-carbon economy, and it is beginning to integrate climate risks into the cost of capital. The recommendations of the Task Force on Climate-Related Financial Disclosures have galvanized increasing harmonization of climate reporting, as well as the creation of a new Climate Disclosure Standards Board and We Mean Business commitment to implement the recommendations. Sixteen banks are now piloting the recommendations with the UNEP Finance Initiative. S&P recently published that over the last two years, climate and environment were relevant to more than 700 ratings, and in more than 100 cases resulted in a ratings action. Norway’s sovereign wealth fund, the world’s largest, is considering divesting from oil. And BNP Paribas recently announced that it would stop financing shale and oil sands projects.

Our own Aron Cramer and Farid Baddache will participate in the One Planet Summit on behalf of BSR and the We Mean Business coalition next week. The event will feature four panels with corresponding announcements and calls to action.

• The “Scaling up Finance for Climate Action” panel will illustrate the new mandate for public and private finance and showcase investments to build climate resilience.
• In “Greening Finance for Sustainable Business,” panelists will discuss how to increase transparency about climate risks, promote impact investment, and mobilize investors for a low-carbon future.
• The “Accelerating Local and Regional Climate Action” session will feature innovative public-private collaborations and pathways for finance at the sub-national level.
• In “Strengthening Policies for Ecological and Inclusive Transition,” leaders will explore creative ways to deliver a transition to the low-carbon economy through policy that does not leave any country or group behind.

The Summit will kick off a year when our collective focus will turn from targets to impacts, from promises to results. The business community will be called upon to demonstrate progress in implementing the Paris Agreement in the high-level UNFCCC Talanoa Dialogue, named after a Fijian form of gathering aimed at the collective good, throughout the year; at the Global Climate Action Summit in San Francisco next September; and at the UN climate negotiations in Poland next December.

BSR is proud to serve on the Global Climate Action Summit’s Advisory Committee as the representative of the business community and to act as the international policy lead for the We Mean Business coalition. Through these roles and others, we will channel the energy and enthusiasm of business to deliver on the low-carbon, climate-resilient world we all need.

We’d love for you to join us in Paris next week to continue the conversation and the momentum.

Blog | Thursday November 30, 2017

The Sustainability Reporting Landscape: Q&A with GRI and SASB

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We recently interviewed Tim Mohin, chief executive of GRI, and Jean Rogers, chair of the Sustainability Accounting Standards Board (SASB), about the relationship between the organizations’ standards and how they can be used in combination.

Dunstan Allison-Hope: You both recently stated that “rather than being in competition, GRI and SASB are designed to fulfill different purposes for different audiences. For companies, it’s about choosing the right tool for the job.” Can you share what you mean by this?

Tim Mohin: The GRI Sustainability Reporting Standards (GRI Standards) and the SASB Sustainability Accounting Standards are designed for different, but complementary, purposes. Stated simply, GRI looks at the company’s impacts on the world and the SASB looks at the world’s impacts on the company.

We believe both frameworks can work together to give companies and their stakeholders a comprehensive view of how businesses can create shareholder value, but, importantly, also help create the conditions for sustainable development. The GRI framework focuses on a company’s impacts on the broader economy, environment, and society to determine its material issues.

Jean Rogers: The key difference between the approach we take at the SASB and what GRI does stems from the specific audiences we’re trying to serve. At the SASB, that audience is financially motivated mainstream investors who are seeking access to standardized performance information on the small handful of sustainability factors that are reasonably likely to materially affect the financial condition or operating performance of their portfolio companies. The SASB serves the unique needs of the investment community, but this is not mutually exclusive with the type of reporting that GRI facilitates for a broader set of stakeholders. Rather, we like to say they are complementary and “mutually supportive.”

Companies now realize that they have a broad set of stakeholders and they ignore them at their own risk. This is, in large part, thanks to GRI’s important work of bringing a wide array of stakeholders and their interests to the attention of corporate actors over the past two decades.

Allison-Hope: The metrics in the GRI Standards are different than the metrics in the SASB Standards. Do you envision more alignment and harmonization over time on specific metrics? How can that be achieved?

Rogers: Wherever possible, the SASB Standards include quantitative, industry-specific performance metrics that are commonly used to describe performance on key sustainability issues, and we leverage the longstanding work of many organizations—including GRI—to achieve this. The SASB takes this approach, in part, to deliver the most cost-effective solution possible for companies. Companies are already likely measuring many metrics in the SASB Standards because we reference indicators from more than 200 entities, including GRI, CDP, the EPA, OSHA, and the EEOC and IPIECA. The SASB and GRI have also committed to mapping our metrics to one another, which is a project we aim to complete in 2018, so increasing alignment is certainly on the horizon.

Mohin: In many cases, our standards are identical. In others, the SASB has defined disclosures that represent issues that are narrowly defined for certain industries. There is alignment work to be done in the third category where the two frameworks have similar disclosures with different characteristics. For this group, we are working together on a technical level with an aim to create better alignment.

Allison-Hope: Reporting on sustainability issues is still a fairly young discipline, and we are learning all the time about how to do it better. What is your message for companies trying to use both the GRI Standards and the SASB Standards at the same time today?

Mohin: There is already very broad uptake of the GRI reporting framework. Given this level of adoption, it’s likely that many of the companies that are reviewing the SASB disclosures already use GRI. Working together, GRI and SASB have identified a few companies that are utilizing both approaches. We aim to highlight these case studies to show other reporters how the standards can co-exist. 

Rogers: Neither GRI nor SASB are tick boxes—but they are both helpful in mastering sustainability. GRI helps you understand your various stakeholders—their interests and how you affect them. This makes you strong. SASB helps you identify and manage financially material issues that affect your business and therefore your investors. This makes you powerful. It’s good to be strong and powerful.   

Allison-Hope: What are the best ways for BSR member companies to provide input into the development of the GRI Standards and SASB Standards?

Rogers: Our doors are always open to BSR member companies, and we would love to hear from them. Getting involved requires only that you reach out and provide feedback. Our goal is to ensure that the standards reflect the needs and expertise of all users—specifically corporate issuers and investors—but we can only do so if they’re forthcoming with their insights and experiences.

We have a 90-day public comment period open through December 31, which is a great opportunity to provide input on proposed changes to the provisional standards prior to codification. Corporate professionals at BSR member companies can also consider joining the SASB Alliance to develop, share, and explore best practices in integrating material sustainability information into existing processes.

Mohin: As a multistakeholder organization, collaboration has always been at the heart of our work at GRI. We encourage BSR members and other interested parties to play an active role in our standard-setting process. Organizations of all types can join the GRI GOLD Community to become more deeply involved in all the work we do.

There are several ways for individuals to get involved in GRI’s Standards: Stakeholders can apply to become a part of GRI’s standard-setting process; they can submit comments during the consultation period; or at a minimum, anyone can listen live or to a recording of the Global Sustainability Standards Board (GSSB). GSSB is a fully independent body that promulgates the GRI Standards.

GRI released its full set of Standards in 2016. More recently, we have conducted a review of two standards on water and occupational safety. If all goes according to plan, we will release those updated standards in the second quarter of 2018. Over the next year, we plan to review a number of other standards.

Allison-Hope: Thank you, Jean and Tim. We are delighted by efforts toward increased standardization, alignment, and harmonization, and we look forward to working with BSR member companies using the GRI and the SASB standards in combination. We will be sure to share lessons learned along the way.

Blog | Wednesday November 29, 2017

Climate Lessons from the Vehicle Industry

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For the third year in a row, global carbon emissions leveled off in 2016. Unfortunately, however, to avoid unmanageable climate impacts, we don’t just need emissions to level off—we need to ski down what Al Gore refers to as the “double black diamond” emissions reduction slope necessary to keep the Earth inhabitable for humans and realize the vision articulated in the Paris Agreement.

Business is an essential component of this effort. That’s why at the BSR Conference this year, I led a breakout session exploring lessons from companies that have been working on emissions reductions and energy efficiency for decades: global automakers and other vehicle manufacturers.

Alex Keros represented General Motors, one of the world’s largest automakers, and Laurie Counsel spoke for Cummins, a leading supplier of heavy-duty engines. The two of them highlighted several ways that companies in any industry can address climate change:

• Envision a different future. Climate change regulations, together with technology and market shifts, are creating more uncertainty in the vehicle industry than at any point in the past 70 years—pressures that other industries are also feeling. In the face of this uncertainty, companies that help shape a low-carbon future will be well positioned to thrive in it. Cummins’ scenario planning, its technology portfolio that includes all-electric trucks, and its leadership’s willingness to envision an energy-diverse future illustrate this approach, as do GM’s electric vehicle launches and its engagement in shared-use platforms, such as ride-hailing and car-sharing.
• But build on your legacy. Keros told the story of his kids learning to ride bikes to demonstrate that even if the nature of transportation is changing, people’s desire for freedom and flexibility isn’t. Cummins and GM are applying their legacies of innovation and mobility to meet new climate and market realities while supporting their core customers, whether building an EV that becomes Motor Trend’s Car of the Year because it is “fast, fun, and genuinely entertaining to drive,” or helping customers improve efficiency of products already in use.
• Identify and address potential roadblocks. An audience member highlighted concerns about growing resource use for vehicle electrification, such as the human rights concerns associated with cobalt mining. Panelists acknowledged that because transitions inevitably create new challenges, business leaders need to better understand what these changes are going to look like so that they can address them—a running theme of BSR17, particularly in relation to futures thinking.
• Engage in policy. Policy and regulation have important roles to play in addressing climate change, and we have seen a lot of company engagement in the climate negotiations, most recently at COP23 in Bonn. The climate policy environment is particularly complex and uncertain for automakers, and while they cite challenges related to vehicle efficiency regulations, they are also promoting policies at local, state, and national levels that encourage innovation, electrification, and shared mobility. Company support for effective policy, as well as collaboration with public officials in new ways to quickly learn about emerging technologies, will be important for continued progress. 

Overall, however, the panelists encouraged business practitioners to think holistically. Through their power purchases, renewable energy goals, and work to evolve their products and business models, Cummins and GM are tackling numerous aspects of climate change.

For business, addressing this challenge won’t only be about reducing greenhouse gas emissions. It’s also about an uncertain and highly dynamic future. We will need to involve business leaders from product design, internal operations, supply chain, government affairs, communications, and other departments, in addition to executive leadership, if we are to “ski down the double black diamond” emissions reduction slope.

Cummins and GM demonstrated that even some of the most carbon-intensive industries are developing their maps to navigate this journey. Other companies can (and should) do the same.