Harnessing Value Chains for the SDGs: How Far Have We Come, and What Next to Deepen Scale and Impact?


(Penny Fowler) #21

I agree with Francis that there is some positive progress in terms of a growing recognition by many multinational companies of their responsibilities not only to ‘do no harm’ but also to ‘do good’, as well as the UN Guiding Principles on Business and Human Rights which provides a framework. And a number of companies are genuinely committed in terms of their global policies to ensure their supply chains are making a positive social and environmental contribution. However, the reality is that many challenges remain including inadequate and ineffective policy frameworks, and continued involvement of people in supply chains in precarious employment, on legal but low wages, smallholder farmers receiving low prices and carrying an unfair share of the burden of risks (including from climate change).


(Rachael Clay) #22

Hi, Rachael Clay, Director of Ethicore here.

The question of how to translate principles in to practice is a critical one. Many companies want to move beyond box ticking and reporting, to really focus on solutions to challenging risks and problems. How can we turn projects and pilots in to real long-term changes in value chains? What support do you think is required for companies (and INGOs) to translate?

Thanks for your thoughts!


(Tsitsi Rosemary Choruma) #23

Progress on gender equality has been largely on a case-by-case or project basis – see examples in Equal Harvest report.

Fairtrade aims to increase the proportion of revenue that goes to the poor farmers by paying higher prices – redistributive approach, but also aims to expand the overall amount of value created through improving production techniques, quality of product and sustainability of production. More and more we have made progress in moving into more sustained Producer Facing initiatives and now making effots to move away from complience into impact Standards

Efforts by business to increase social investments have been big, but would need coordination and structuring. Finding the common ground and leveraging on skills and resources.. Such investments should aim as much as possible on reducing in equalities. We need to consider investments that reduce discrimination in access to work by women, ability for women to access

Behind the Brands Campaign – has forced companies to reconceive the intersection between social justice/society and corporate performance/profit. Companies have sought to develop new skills and knowledge relating to how they can enhance appreciation of societal needs, understanding the basis for company productivity, and ability to collaborate across profit/non-profit boundaries.

Challenges remaining for companies are to find ways to translate principles into practice, getting buy inn from investors and shareholders . There is still need to increase internal awareness-raising and capacity building. Businesses have rarely approached societal issues from a value perspective but have treated them as peripheral matters, obscuring the connections between economic and social concerns. Companies may need to change the approach of eding social complience issues to government and csos.

There is still need to invest in proper and deeper analysis of the the issues in our value chains especially conducting separate gender analysis so that challenges and constraints that specifically reklate to women who carry the most burdarn are not diminished.

Another challenge can also be found in how businesss is still working with private sector. The model has to change to enable and support and not work against improvement of social accountability.



Zahid Torres-Rahman said:

Let's start with the first question:

Question 1: Where has the most progress been made in harnessing value chains for social and environmental impact, and where do the challenges remain for companies looking to translate principles in to practice?


(Francis West) #24

Yes, in terms of specific issues, wages are clearly an area that remains problematic. Ikea became the first retailer to pay a living wage to all UK staff last week. That’s a fantastic commitment for which they should be commended, but there are still far too many companies (and consumers) that are linked to extremely low wages further down the supply chain – from tea estates to garment factories. Poor wages and working conditions of parents and caregivers impact on children- low income can affect access to health and nutrition and can contribute to child labour; long working hours and insufficient maternity leave may lead to insufficient time for parents and carers to rest and care for children who are left to take care of themselves and/or their siblings. There can also be inadequate policies and support in place for women workers to breastfeed their children when they want to.



Penny Fowler said:

I agree with Francis that there is some positive progress in terms of a growing recognition by many multinational companies of their responsibilities not only to ‘do no harm’ but also to ‘do good’, as well as the UN Guiding Principles on Business and Human Rights which provides a framework. And a number of companies are genuinely committed in terms of their global policies to ensure their supply chains are making a positive social and environmental contribution. However, the reality is that many challenges remain including inadequate and ineffective policy frameworks, and continued involvement of people in supply chains in precarious employment, on legal but low wages, smallholder farmers receiving low prices and carrying an unfair share of the burden of risks (including from climate change).


(Zahid Torres-Rahman) #25

Great insights so far! Let's move on to our second question:

2. What are we learning about the key enablers for business seeking to improve their ESG performance, including the role of good governance and regulatory environments?


(Rachael Clay) #26

Francis,

This is a great example. Can you give us some insight in to the way you brought children , as stakeholders, in to the process? Thanks.



Francis West said:

Where companies have undertaken impact assessments, this has helped focus where value chains and expertise can be harnessed for positive impact. If a company integrates the voices of the most vulnerable into its human rights impact assessments, it will be better placed to determine where to focus its efforts to positively support the delivery of the SDGs. This is clear from the experience of the telecoms company Millicom. After conducting a child rights impact assessment across its supply chain with Unicef, Millicom supported the creation of a new SMS service in Tanzania that allows parents to register new births as well as those of children under five on any mobile phone, straight to a centrally-run database. Birth registration- the subject of another SDG target- rose from nine per cent to 40 per cent in the pilot region of Mbeya in six months.

This isn't an easy process however. There is a challenge in that determining the impacts of a business (and therefore the opportunities to best support desirable social outcomes) requires consultation with stakeholders that are potentially or actually affected by a company’s operations and supply chain, particularly vulnerable groups, rather than with those organisations that have best managed to grab the company’s attention. Impacts on individuals take place in specific geographic locations at specific times and while it might be easier to undertake stakeholder consultation with NGOs HQ’d in London, businesses really need to get as close as possible to the voices of those at the sharp end of impacts in the value chain.

For Unicef UK, that means bringing the voices of children into the due diligence process so that a company can understand how they affect their lives beyond the traditional focus on child labour (which remains a grave issue with 168 million child labourers worldwide). Children are important stakeholders for business - as consumers, family members of employees, young workers, and as future employees and business leaders- but are rarely treated as such. Almost every business activity can leave a footprint on children’s lives - whether through employment conditions of parents, product safety, marketing practices or environmental impact.


Zahid Torres-Rahman said:

Let's start with the first question:

Question 1: Where has the most progress been made in harnessing value chains for social and environmental impact, and where do the challenges remain for companies looking to translate principles in to practice?


(Lee H. Babcock) #27

Specific to agricultural value chains.... there is great potential for strategically inserting mobile payments. By transitioning the payments to farmers by large buyers (e.g. corporates, cooperatives) from cash to mobile we can jumpstart the ecosystem of cashin/cashout agents and merchants in rural areas to service all other rural mobile finance needs (e.g. health, education, utilities, solar panels/lanterns, clean cookstoves, treadle pumps, etc.). Agriculture mobile payments requires alignment with mobile network operators, large commodity buyers, business service providers and other stakeholders. Agri mobile payments will comply with SDG's 2, 3, 4, 5, 8, 9, 10, 12 and 17 that embrace in some way financial inclusion.

There have been such initiatives in Uganda (cotton, coffee and tobacco), rice (Ghana and Tanzania), cotton (Zambia), cocoa (Indonesia) and elsewhere. This is a new space and ideally allows us to harness agriculture value chains in pursuit of the SDG's.


(Quintin Lake) #28

To pick-up on John's second point, an area of progress has been the introduction of new regulations in some countries, such as the Modern Slavery Act in the UK. The UK will be the third large economy, following Brazil (2005) and California (2010) to legislate company reporting on modern slavery in supply chains. With all three laws being less than ten years old, it may still be too early to accurately assess the impact this type of mandatory investigation and reporting will have on procurement behaviour or worker conditions.

Many large companies in the UK already adhering to voluntary codes of conduct have welcomed the Act. They claim it is a significant step to creating a level playing field, though some assert the act does not go far enough to enforce its requirements. Companies can simply choose to state they have taken no action, so it will be a key point of note to see the role consumers, investors and other groups play in helping companies drive transformative change for workers in their value chains.


John Morrison said:

Hello everyone. On Zahid's first question - I think the most progress has been made in supply chains where commodities are traceable or revenues can be made transparent (e.g. oil, gas, diamonds, conflict minerals etc). Similar, progress has been made where labour can be contextualised within international standards (e.g. ILO Better Work etc.).

But the remaining challenges are many. Not least the fact that for some products - such as Ready Made Garments - price remains the overwhelming concern and this affect's labour conditions. There are two fundamental challenges in my view: (i) to move away from audit-led approaches to the supply chain to those focusing on impact and (ii) to involve the wider value chain, including investors and eventually consumers themselves. At the moment there are just not enough incentives and disincentives for action in most value chains.


Zahid Torres-Rahman said:

Let's start with the first question:

Question 1: Where has the most progress been made in harnessing value chains for social and environmental impact, and where do the challenges remain for companies looking to translate principles in to practice?


(Alison Ward) #29

I agree with the discussion. And think that transparency is at the heart of this. Cotton can be traded 10 times between farm and garment - so a complex supply chain ....

But the connections are there - as I know that if mill receives poor quality yarn they will be back in touch with their suppliers quickly.

It's not just about global business being accountable but about engaging the middle of the supply chain.


(John Morrison) #30

I think there should be a year where no companies are allowed to do auditing or social reports, instead the money should be invested in more innovative approaches that directly involve workers themselves, shareholders or consumers. It will take something significant to shift us out of current behaviour patterns. Post Rana Plaza at least got actors thinking together and taking an impact-led approach - but how successful have we been in involving consumers in such approaches?



Rachael Clay said:

Hi, Rachael Clay, Director of Ethicore here.

The question of how to translate principles in to practice is a critical one. Many companies want to move beyond box ticking and reporting, to really focus on solutions to challenging risks and problems. How can we turn projects and pilots in to real long-term changes in value chains? What support do you think is required for companies (and INGOs) to translate?

Thanks for your thoughts!


(Francis West) #31

Clearly, Government has a central role to play in driving up ESG standards and in terms of human rights are the primary duty bearers. Nevertheless, businesses can help raise the bar in that respect and use their incredibly powerful voices- both in the UK and in the Global South – to affect change. A good example of this is when H&M and other major retailers lobbied the Cambodian government to raise wages in the garment sector. In the UK, the Modern Slavery Act contains a supply chain transparency clause largely down to lobbying by businesses and organisations like ETI.



Zahid Torres-Rahman said:

Great insights so far! Let's move on to our second question:

2. What are we learning about the key enablers for business seeking to improve their ESG performance, including the role of good governance and regulatory environments?


(Barbara A Brown) #32

My response is to part of question # 1 - where do the challenges remain for companies? and question #3. i.e. how can businesses and development partners collaborate more effectively. I currently work for Clemson but soon to retire and work for a non-profit Citizens Center for Public Life. In South Carolina, USA when I work to try to involve others in global development to eliminate hunger and poverty I get responses like we have our own problems, we have to solve them first. BUT, we are not doing so. in 27 counties SC has poverty of 20% or more. I have been working to put together a service learning project to work locally and globally simultaneously to eliminate hunger and extreme poverty. Deliberative democracy efforts are an initial tool. Business representatives have contacted me. But, we have not moved forward. I really think people like me need more coaching from business leaders on helping us provide what business needs to make it easier for business to partner with non-profits. Maybe help in speaking more of a business language than our non-profit humanitarian focus. New email address will be: babara.a.brown13.bb@gmail.com


(Francis West) #33

Public procurement is another area that we could look at in terms of raising standards. The UK government buys a huge amount of goods and services from business. With £45 billion worth of contracts awarded to private firms each year- around three per cent of the UK's GDP - public procurement is a major component of the UK economy. The government could do much more to use this purchasing power to influence corporate behaviour. In its existing UK Action Plan on Business and Human Rights, the government already states that it expects companies to be conducting human rights due diligence. While the government clearly sees the value in this due diligence process, it could do more to scale up the practice by making this a requirement of companies that bid for large public sector contracts.



Zahid Torres-Rahman said:

Great insights so far! Let's move on to our second question:

2. What are we learning about the key enablers for business seeking to improve their ESG performance, including the role of good governance and regulatory environments?


(Alison Ward) #34

Hi Rachel

I agree we have to move beyond pilots and not just reach the thousands but the millions. We have to show business this can be done at scale and of course engage Government.

I am not suggesting this is easy!

Alison



John Morrison said:

I think there should be a year where no companies are allowed to do auditing or social reports, instead the money should be invested in more innovative approaches that directly involve workers themselves, shareholders or consumers. It will take something significant to shift us out of current behaviour patterns. Post Rana Plaza at least got actors thinking together and taking an impact-led approach - but how successful have we been in involving consumers in such approaches?



Rachael Clay said:

Hi, Rachael Clay, Director of Ethicore here.

The question of how to translate principles in to practice is a critical one. Many companies want to move beyond box ticking and reporting, to really focus on solutions to challenging risks and problems. How can we turn projects and pilots in to real long-term changes in value chains? What support do you think is required for companies (and INGOs) to translate?

Thanks for your thoughts!


(Alison Ward) #35



Francis West said:

Clearly, Government has a central role to play in driving up ESG standards and in terms of human rights are the primary duty bearers. Nevertheless, businesses can help raise the bar in that respect and use their incredibly powerful voices- both in the UK and in the Global South – to affect change. A good example of this is when H&M and other major retailers lobbied the Cambodian government to raise wages in the garment sector. In the UK, the Modern Slavery Act contains a supply chain transparency clause largely down to lobbying by businesses and organisations like ETI.



Zahid Torres-Rahman said:

Great insights so far! Let's move on to our second question:

2. What are we learning about the key enablers for business seeking to improve their ESG performance, including the role of good governance and regulatory environments?


(Tsitsi Rosemary Choruma) #36

I think it is clear that we need to develop internal capacities and responsibilities on gender in supply chains. If our analysis is deep and accurate, we should be able to develop the needed indocators of what we need to change. I think the biggest challenge is we are not taking time to invest in producer organisations so that these organisations are not inthemselves violating the rights of those participating in the productive initiatives. If we are true about creating inclusive businesses it should then be reflected even within the Producer Organisations. I believe the resources are there and there has to be common ground that allows us to work together even more.

Zahid Torres-Rahman said:

Great insights so far! Let's move on to our second question:

2. What are we learning about the key enablers for business seeking to improve their ESG performance, including the role of good governance and regulatory environments?


(Francis West) #37

Hi Rachel,

On the back of some work we did with the tour operator Kuoni on bringing Children and/or their representatives into an impact assessment process, we produced this guide that outlines the practical steps to take: ENGAGING STAKEHOLDERS ON CHILDREN’S RIGHTS

Rachael Clay said:

Francis,

This is a great example. Can you give us some insight in to the way you brought children , as stakeholders, in to the process? Thanks.



Francis West said:

Where companies have undertaken impact assessments, this has helped focus where value chains and expertise can be harnessed for positive impact. If a company integrates the voices of the most vulnerable into its human rights impact assessments, it will be better placed to determine where to focus its efforts to positively support the delivery of the SDGs. This is clear from the experience of the telecoms company Millicom. After conducting a child rights impact assessment across its supply chain with Unicef, Millicom supported the creation of a new SMS service in Tanzania that allows parents to register new births as well as those of children under five on any mobile phone, straight to a centrally-run database. Birth registration- the subject of another SDG target- rose from nine per cent to 40 per cent in the pilot region of Mbeya in six months.

This isn't an easy process however. There is a challenge in that determining the impacts of a business (and therefore the opportunities to best support desirable social outcomes) requires consultation with stakeholders that are potentially or actually affected by a company’s operations and supply chain, particularly vulnerable groups, rather than with those organisations that have best managed to grab the company’s attention. Impacts on individuals take place in specific geographic locations at specific times and while it might be easier to undertake stakeholder consultation with NGOs HQ’d in London, businesses really need to get as close as possible to the voices of those at the sharp end of impacts in the value chain.

For Unicef UK, that means bringing the voices of children into the due diligence process so that a company can understand how they affect their lives beyond the traditional focus on child labour (which remains a grave issue with 168 million child labourers worldwide). Children are important stakeholders for business - as consumers, family members of employees, young workers, and as future employees and business leaders- but are rarely treated as such. Almost every business activity can leave a footprint on children’s lives - whether through employment conditions of parents, product safety, marketing practices or environmental impact.


Zahid Torres-Rahman said:

Let's start with the first question:

Question 1: Where has the most progress been made in harnessing value chains for social and environmental impact, and where do the challenges remain for companies looking to translate principles in to practice?


(Penny Fowler) #38

There have been several initiatives representing steps in the right direction in addressing social issues including workers rights in supply chains e.g. IKEA signing up to a living wage in the UK, Unilever’s new Responsible Sourcing Policy, the multi-stakeholder initiative on tea wages in Malawi. But in terms of results, very little has changed for very few workers.

To achieve a tipping point, a more systemic approach is needed. This goes beyond increasing value for wages and leads towards governments having inclusive minimum wage-setting processes, employers who have bought into the agenda and have the capacity and flexibility to deliver it, and workers being able to negotiate terms.

Key tests for whether initiatives will promote deeper change are: will it deliver a fairer share of value in the chain? Will it help remove barriers to collective bargaining? And will it help to influence governments’ minimum wage-setting? As others have said, key enabling factors include Commitment, Transparency and Collaboration


(Lee H. Babcock) #39

I agree. ICT and mobile phone technologies help to 'aggregate' low income populations thereby presenting them as economically viable target markets as consumers of products/services as well as enabling them to suppliers of products/services. Those corporates that recognize this and strategically respond with appropriate business models will secure a first mover advantage for their respective industry.



Peter Mbiyu said:

The potential for achieving #SDGs through value chains is enormous but requires a complete re-engineering of business models by most corporates. Businesses should stop looking at low income populations as vulnerable populations only capable of receiving CSR donations but as capable people who lack opportunity. As such, they should structure their business models to accommodate the poor as either producers or consumers. In some cases additional investments may be required but the paradigm shift is important to end poverty and hunger among other #SDGs. The impact potential for inclusive business models has been demonstrate through financial inclusion in Kenya.


(Alison Ward) #40

We have to appeal to values and value - we know that there are businesses wanting to make change BUT we have to show there is (of course) long term business value. I hear many businesses now talking about legacy - so not just our impacts today - but also about tomorrow.

Alison Ward said:



Francis West said:

Clearly, Government has a central role to play in driving up ESG standards and in terms of human rights are the primary duty bearers. Nevertheless, businesses can help raise the bar in that respect and use their incredibly powerful voices- both in the UK and in the Global South – to affect change. A good example of this is when H&M and other major retailers lobbied the Cambodian government to raise wages in the garment sector. In the UK, the Modern Slavery Act contains a supply chain transparency clause largely down to lobbying by businesses and organisations like ETI.



Zahid Torres-Rahman said:

Great insights so far! Let's move on to our second question:

2. What are we learning about the key enablers for business seeking to improve their ESG performance, including the role of good governance and regulatory environments?