A2: I think there are 3 critical challenges and one potential “showstopper” that risks preventing us from focusing on tackling inequalities, and the central role of respect for human rights in that.
Challenge One: We 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. Instead, the focus has historically been on increasing income for employees, philanthropy or new product and service offerings for poorer communities, with business respect for human rights being relegated to being a sub-set of issues under wider, and vague “social” umbrella.
Challenge Two: Efforts to measure business respect for human rights have for too long played into the framing that respect for human rights is a compliance exercise vs transformational. Indicator design tends to come from a process of breaking up the expectations of the UNGPs into a long list of process expectations, as well as selecting some human rights that all companies should at least signal they have a policy on. Compliance 101 and with an overwhelming focus on indicators of inputs, activities and outputs that tell us very little about the likelihood of better outcomes for people (see Shift’s research “Why we need Change” here). This may tell us which companies are making an effort – or better at signalling that they are - and which are not, but it does not tell us very much about whether companies are fundamentally embracing what it means to address the most serious harms to people across their operations and value chains.
Challenge Three: It is not easy. Developing better measures and indicators that give us greater insight into whether a company is: a) wired to respect human rights; and b) tackling inequality is not an easy task. It requires robust dialogue, creativity and experimentation. But it is also the art of the possible. There are already a range of good rights-based indicators that can provide insight into whether companies are tackling, or compounding, inequalities in their operations and value chains such as in relation to pay gaps, health and safety; and freedom of association. And at Shift, for the past few years through our Valuing Respect project we have been working with various stakeholders to develop better ways of evaluating business respect for human rights. We are also seeing interest and uptake of the project’s work-in-progress outputs in our work with financial institutions, businesses and standard setters. We think we’ve made some breakthroughs but there is so much more work to be done!
And there is probably one, eminently human, showstopper, namely that it is really hard to let go of what we have available to create space for new ideas and ways of working. This is especially the case here where we have built up a system of supply and demand of data between companies and markets that is telling us enough to get by but nowhere near the right things to achieve transformative change. Sometimes the good can be the enemy of us doing better and achieving more.
Q2. What are the current critical gaps or stoppages that prevent this from happening at the moment?
We need to be honest. Social impact is difficult and if it weren’t we would have a lot more progress. Transparency about social impact is important. Many times we don’t have all the answers and need to be honest about that. Often we know the direction of travel but not exactly how to get there. Transparency about failures as well as successes is important. Increasingly senior leaders in companies are being open about it and this needs to continue.
Transformation and doing things in a different way is also difficult. It first requires people who have a vision and are able to seek support for that vision throughout the organisation, from the board to those who need to implement the changes. Bringing people along on the journey is important.
I think finding a focus can be difficult for companies as they span a range of social impact areas. Finding focus areas, embedding them in sustainability strategies that are led from the top of the organization.
Great. I’d be very happy to discuss. We have also been considering metrics such as Absenteeism and / or voluntary staff turnover as indicators of staff well being.
A2- Lack of understanding of the needs and priorities of communities.
Another barrier is insufficient systems thinking and partnerships with public, private and civil society, and access to information and how issues such as social justice is highly connected to climate change and nature loss. Of course this is reflected in the SDGs that are so interconnected.
Communicating within the sector and across sectors to understand priorities, existing assets and resources, and possible opportunities to intervene that make a difference.
There is also an issue of getting marginal voices- ranging from smallholders in the supply chain through to those impacted by corporate activities- into decision-making within organisations that are often dominated by those that are far from the reality of the impacts of the organisation.
A lot of the research on this topic seems to focus at a policy/thematic level, rather than from the perspective of a company and how they both impact societies and importantly how they can positively contribute, beyond obvious areas like paying tax and creating jobs. So more research into how companies can meaningfully contribute to social transformation and social justice could be really impactful and helpful to businesses that are trying to find a positive role.
A2: - First, the reluctance to disclose information can be attributed to the perception that disclosure leads to liability when, in fact, the opposite is the case – risk lies in non-disclosure. This is evidenced by some of the high-profile industry incidents.
- There is also some uncertainty about what issues should be covered.
- Another challenge is the lack of resources for data gathering or report writing. Businesses should ensure that reporting is seen as a key vehicle for information to stakeholders and not as an effort to disclose for the sake of responding to legal or societal requirements.
Finally, data can be sensitive or interpreted incorrectly. While some aspects of human rights disclosures can be considered confidential or prone to misinterpretation, it is essential for organizations to understand the risks of failing to report on those impacts.
A2: I think there has been a lack of awareness of how we can best work together with other companies, though there has been a shift in recent years. For example, there has been an increase in domestic violence during the pandemic - this was discussed a lot in the media, with campaigns such as free train travel in the UK for survivors leaving an abusive partner.
There is huge scope for working together to increase our impact, but we need to open up communications and find synergies so we can each use our strengths where they’re needed and empower each other to achieve more.
Cory, BEAUTIFULLY put - regrettably I come across too many instances (and I will not name them so as not to shame the guilty) where Procurement functions could be renamed the Anti-Sustainability Department!
The integration of social/environmental needs in the core business is a key factor that for me distinguishes purposeful companies from the rest. When social impact is an expectation to be met, companies have the tendency to do the minimum required. When a sustainable purpose becomes a competitive advantage, Business becomes a true force for good.
However, moving forward, human rights due diligence and social impacts should become integral to the management system of companies and the way they conduct business, rather than a process that gets treated as a separate element. This should also be reflected by making sure that human rights are an integral part of a report instead of a standalone piece . This way, transparency can play a crucial role to ensure business respect for human rights.
A1: This is a very timely question and something that we have been discussing at YY Ventures, which focuses on promoting social business in partnership with Nobel Laureate Professor Muhammad Yunus. We believe his vision of “social business” has a lot of elements that traditional businesses can learn from. The current pandemic has exposed the vulnerability of our business models and that brings us to today’s discussion on social expectations from these businesses. While not all businesses can be transformed into social businesses, but we can take a lot of pointers from Dr. Yunus’ six principles of social business mentioned below and turn them into a set of core social expectations from all companies:
Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization.
Financial and economic sustainability
Investors get back their investment amount only. No dividend is given beyond investment money
When investment amount is paid back, company profit stays with the company for expansion and improvement
Gender sensitive and environmentally conscious
Workforce gets market wage with better working conditions
Agree Charlotte. Transforming disclosure is something that companies and investors could do (better) together. The WBCSD’s Purpose-Driven Disclosure (PDD) project is a great example of this. It focuses on improving externally reported company information in order to enable better decision-making and outcomes for companies and investors.
“A2: [ The main gaps include:
• unfair compensation practices where women receive less pay for the same work;
• the boy’s club management team,
• excluding small businesses or ethnic businesses from your procurement process,
• polluting the environment,
• inadequate social protection, ignoring workers safety and wellbeing,
• abusing immigrant workers as volunteers and students as interns and apprentices
• or pursuing such programmes in a manner that drives social inequalities – example unpaid internships where students are not really given and opportunity to learn and build a resume or those that require students to expend significant monies to participate
• being unaware of local and global challenges and the role and responsibility of businesses in solving those problems―racism and discrimination, the environmental crisis comes to the top of the mind
• facilitating child labour or even human trafficking by one’s organization, the same could be true for fraud or money laundering
• board that don’t work beyond reviewing the financials from a numbers point of view.
• Not asking the question - How do we add value for customers and to our countries contribution the Global Value Chain - especially companies in countries where they are largely missing from the value chain, geographical indicators and agricultural resilience.
• Failure to adapt one of the reporting framework related to sustainable development or the SDGs or the “Pressure State Response Framework”
• Failure to conduct Organizational Assessments and evidence-based Corporate Strategy Planning
Another has to with the commitment to real corporate strategy planning that will allow organizations to examine its purpose, its relevance, history, PESTLE and SWOT analysis and even more so to conduct solid organizational assessments at least every three years. The organizational assessments provide the perfect opportunity to find out what are the existing and emergent needs with your local and global community to which you respond.
• Why big problems can we and should we solve?
• Engagement with and conducting real research into customer needs and wants.
There is also a tendency to narrow down the role of marketing to its communication or sales support functions, with the result that its role in driving the development of solutions for real social problems gets forgotten.
This is a complex issue and the bigger the companies the more complex it gets, but generally this has not been addressed or tackled more effectively due to (1) lack of a push from investors and/or consumers, (2) little clarity and lack of common setting for social considerations, and (3) concerns over costs and accountability associated with identifying, assessing and managing those social risks at critical parts of the chain, although this could be also considered as part of risk management, diligence and capital discipline.
Leadership and standard setting by major leading companies in various fields can lead the way and set the stage for what can become more widely considered and imbedded in Sustainability, Social Responsibility and other frameworks and assessments.
Looking forward to hear your reflections on external engagement Sinead … my work on using the SDGs to frame a client’s narrative and how they respond to the pressure from (an increasing) range of external stakeholders has led to some very interesting dialogues.
One of the biggest challenges is that the conversation tends to stay within an echo chamber of well-intentioned people.
We need to work with the behaviours of people / consumers to understand how they make their decisions.
At the same time, to @MarkHodge’s point earlier, the term “social” is very broad, so means different things to different people.
If we can start to model behaviours, be it by holding certain companies in high regard (as has been done by Patagonia), or by having a simple and easy impact measurement system (which customers can access at the point of purchase) then it provides a guiding light for how things can be done, again, taking things away from the conceptual to the real.
I’m hysterically laughing at the Anti-Sustainability Department! And truly, the idea is not to shame certain functions, simply to acknowledge that certain departments could create beautiful synergy (forgive my pulling out the 2005 biz buzzword guide) but instead end up, maybe unintentionally, undoing one another’s efforts.
Hi Mark, indeed this is not necessarily a ‘one format fits all’ and while the framework can be similar and cover the broader aspects, parameters or scope and then tailor to the specifics of the corporate and its engagements with stakeholders, employees, etc.
Agree that cross-industry collaboration can unlock opportunities for business to play a better/bigger role on social issues. For example, another area of collaboration could be to go beyond adherence to ESG principles, and focus on bringing impact investment into the mainstream. The Impact Management Project (IMP) is working with over 2,000 organizations to establish global consensus on how enterprises and investors can measure, compare and report the risks and positive impacts of their businesses or investments.