What social indicators should purpose-driven businesses be measuring?

I like your approach to this Cliff as it creates an accountability based angle of pressure to be better as organisations. I do wonder though how more intrinsic elements of motivation to be better can be included, so that it’s not just a “stick” of public scrutiny, activist pressure based on public accounts and reporting?

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Hi, nice to be part of the conversation. I’m Dr Sam Lacey, Job Quality Lead at CDC Group.
Have you considered looking at the ratio of salaried to non-salaried workers? We have been working with IRIS+ to identify indicators relevant to the theme of “Increasing job security and stability for people in precarious employment” and are considering this as a core metric.
In any business, the most vulnerable workers are those working on contracts / for sub-contractors. They frequently have no social protections, no paid sick leave, and lower wages for the same work.

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Hi Charlotte. One thing we are reflecting on is that we - all of us - have not made the conceptual connection between human rights and gross inequalities. One consequence of this is that those looking to leverage the private sector to address inequality do not see business respect for human rights as much more than compliance with some minimum level international standards.

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One of our priorities might be to organise how we considering the “social” element across the various stakeholders of any business so that they become comparable across business and industries, and enable customisation within businesses:

to employees
to customers
to suppliers (all the way through the supply chain)
to society
to the planet
to shareholders

In doing so, we enable people to access the metrics in a human and relevant manner.

We can then map certain standards and frameworks (e.g. the SDGs) to very concrete expectations within an organisation (and their ecosystem).

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Hi I’m Hamish, I work on building sustainable value chains that connect smallholder farmers to multinational brands. I am a freelance consultant, though work extensively with German flavor and fragrance house Symrise, where I am responsible for designing and delivering their Public Private Partnership flagship programme with GIZ co-funded by the BMZ. Partners in the programme include Unilever, MARS, Pernod Ricard, Kellogg’s, Natura, Save the Children, Tanager, and of course GIZ and Symrise.

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Hi Sam,
Compared to when we started in Jan, the ability to include much more in our indicators on worker protection and living incomes has grown. Very happy to discuss further as this might go beyond our ‘core social’ expectations and into an income inequality transformation / benchmark

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Great suggestions Meegan - totally agree on using the SDGs as the guiding framework for choosing the indicators, however I do wonder on two things: 1 - are the indicators in their current form useful enough for businesses to tailor their strategies and intent to be good on, or do we need something more specific? and 2 - business is good at ‘driving’ stuff, but how can we build an appreciation of how effort and investment in some SDGs that could be considered as ‘driven by others’ (from a causality perspective) will be a better strategy that putting money and effort into activities that are unlikely to move the dial on indicators of SDGs that are not drivers.

If we want to ensure efficient changes and sustainable transformation, Companies should report on material social topics and severe impacts first. These will vary from company to company according to each context and can be identified through a materiality assessment which involves stakeholders.

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We have mapped globally recognized business indicators against each SDG targets which can help business understand how they contribute to different goals and how they can adopt changes. https://www.globalreporting.org/resourcelibrary/GRI_UNGC_Business-Reporting-on-SDGs_Analysis-of-Goals-and-Targets.pdf

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The problem I have with the 2030 Agenda is that it virtually ignores the subject of the rights of Indigenous Peoples. Indigenous Peoples are mentioned just six time and always in relation to other groups. I would advocate on behalf of using the UN Declaration on the Rights of Indigenous Peoples as a lens to read all 17 SDGs.

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In precise terms, companies should be required to monitor and report on the number of people in their value chains who are living below the international poverty line. As a key indicator for Due Diligence it would also serve to illustrate where consumption and exploitation are inextricably linked - all the way from farm gates to consumers’ homes. Pay decent prices for products whose quality, provenance and characteristics you value, and you will demonstrably value the lives of everyone who produces them. This by the way is NOT about bashing companies but it is about bringing transparency to value chains.

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Our second question today:

Q2. What are the current critical gaps or stoppages that prevent this from happening at the moment?

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Yep and that’s a great resource that we have used again and again, however it becomes a bit of a minefield or a pick-a-mix selection in trying to match SDG-relevant indicators to current and planned activities that a business has within their strategy. The challenge is agreement on set of core indictors that would encapsulate what good looks like, but I guess that’s why we’re today …

Hi Ben. Would love to connect on this. We recently joined the Steering Group of the Capitals Coalition to deepen our, and all of our, understandings about the linkages between respect for human rights, and human and social capital. It’s been fascinating and really pushed our thinking too. Our President, Caroline Rees, is currently doing a lot of thinking and some writing on how we see these narratives hanging together.

There’s a lot! Internationally there is a lack of consistency in behaviours and reporting requirements. This ‘uneven playing field’ means there is not enough incentives for companies to act responsibly and disclose the information that makes independent assessment feasible. There’s also many groups working in parallel, but not in unison.
It is very hard to build consensus and devote sufficient resources to the task of developing and implementing such assessments, particularly if you aren’t monetising the data afterwards.
Being bad is still good for business… Ultimately, many companies may not want to meet these societal expectations because they ‘may’ impact on their profit-margin or stock-price. The shareholder primacy model of capitalism can be seen as defending itself from the demands of social-responsibility.

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The most critical and least talked about gap and/or stoppage is the separation between Procurement and Sustainability within the private sector. On one end of the building, there’s a team dedicated to supporting all kinds of social—or socially adjacent, like livelihoods and environment —projects, with the intention of ensuring corporate responsibility and long-term supply viability. On the other side of the building, there’s another team dedicated to sourcing products… usually from the same groups of people the sustainability projects support. Yet for some reason, never the two shall meet.

There is an inherent connection between what kind of prices a producer (I work in international agriculture, so in my case I’m usually referring to farmers) earn for the raw materials sold to a company and that producers’ overall livelihood. Inextricably linked, there is concrete tie to producers’ overall livelihood and their social advancement and security. Which makes it really nonsensical that companies can spend so many resources on socio-economic sustainability projects that are absolutely decoupled from the core of socio-economic sustainability, which is compensation for goods and services.

Until Procurement and Sustainability start working as a unit, socially driven initiatives at origin will never achieve the results companies are looking for. Instead, they will continue to extract more than they contribute to these families and communities.

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A2: Progress is being made (like the Business Roundtable statement on shareholder primacy or the quantifiable evidence that ESG investment can deliver returns), but we’re still waiting on significant industry adoption of the mindset that they are truly accountable for achieving positive social impact alongside economic return. It’s not a ‘nice to have’, but rather we’ve reached a point where it’s a ‘need to have.’ And this needs to be more than a company talking point or the creation of a task force; it needs to be built into corporate incentive structures, stakeholder expectations, hiring & retention, budget allocations – anything that touches day-to-day operations. Company culture needs to lead to industry change.

Governments can and must do more to incentivize this, not only with tax incentives on the response side but also supporting an ecosystem on the input side: public education & job training programs, smart (inclusive, accessible, sustainable) urban design, standard-setting policies that enable companies to be competitive but also socially responsible.
Partnerships must be made a more effective and efficient method of engagement. They’re still clunky, slow to build & achieve results, too often personality driven and vulnerable to disruption, and overly balanced in favor of the purse strings. Organizations like Business Fights Poverty and Concordia serve as resources to the partnering community, offering expertise, framing materials, networks, and opportunities to their respective memberships. Entities wishing to partner should leverage these to more efficiently form and sustain partnerships that mitigate risk and expand market opportunity.

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Aiden! Good (no that’s doing a disservice, GREAT) questions and I believe that yes the SDGs are “fit for purpose” in terms of companies articulating their impact against the Goals (qualitatively) and against the Indicators and Targets (quantitatively). Have done this a number of times for company Sustainability Strategies and at the programme impact level for individual project interventions.

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Social costs accumulate not only to investors but also to local communities, to states,
to taxpayers, and to tribal governments. These communities often bear the financial burden when companies fail to obtain consent from indigenous peoples regarding projects that impact them. Many times, these communities are those with the fewest resources.Investors should develop best practices in due diligence by creating a list of considerations as to how to operationalize the free, prior and informed consent (FPIC) of Indigenous Peoples regarding development of resources on and near their lands and territories. This includes use and development of all resources including, but not limited to, land and marine resources, and intellectual property.

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Fully agree Hamish and good to find you here! A reason for “meriting their existence” that goes beyond making a profit - it is a simple way of putting the social expectations that all companies must meet.

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