We mentioned earlier the role of regulations and legislations as references for basic social indicators but less than 25 countries have adopted a National Action Plan for the UN Guiding Principles. More countries need to follow and create these incentives and requirements for businesses as well. (https://www.globalreporting.org/SiteCollectionDocuments/2019/NAPs-Policy.pdf)
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To cut business organisations some slack, I think that overall we have started to make ESG reporting an overly burdensome and resource intensive task in its own right - and letās be honest folks it does NOT pay the bills. Consequently we have to find a way in which reporting against social indicators adds value to businesses and does not simply generate costs. If this means that a Behind The Brands type exercise translates into positive shareholder value then so be it.
To my suggestion that companies be compelled to track those in their value chains that are living below the international poverty line, then I think that governments individually and the UN collectively has to start making tracking that population relevant data more accessible - and not have to make companies pay for their social monitoring costs in isolation to other organisations.
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Indeed @MarkHauser . Language is a big barrier also in cross-sector collaborations as mentioned by @Benkellard. For example, our research at Business Fights Poverty suggested that investors are an under-utilized and often overlooked source of expertise and support for companies who are serious about having a social impact. Increasingly, they recognize the link between addressing material social and environmental factors and a companyās financial performance.
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Scale is a problem here and the disintermediation that comes along with it. In the quest to scale solutions and to just plain get bigger and more profitable big business has the tendency to lose touch with local needs and how the needs of communities and local employees (as members of those communities) aggregate (if at all).
Whaaaat?! You canāt be suggesting that we should lessen the pressure on business to be good and ethical? 
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Vitto as you know, I spend much of my time at the coal-face of collaboration - it tends to get easier the more you dig away at it, especially when you can find short-cuts to build alignment and trust.
This is where I think we need to applaud the role model collaborations - typically because they have been built on a small handful of people who collectively decide that the rewards of the unifying cause more than outweigh the headaches and perspiration of the blood, sweat and tears!
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Organizations need to own their role in advocating change as well.
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Agreed and investors are likely to want to know more if there are a) liabilities where companies are destroying social value and b) what they are doing to promote wellbeing through all its touch points, not just its products and services. Consistent definitions and metrics would help, but thatās not easy across very divergent sectors.
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Third and final question today:
Q3. Beyond the basics, what are the key social transformations that companies can contribute to?
Thatās a warning for buzzword
I find that bigger businesses often just donāt know what theyāre doing in different parts of the business (functions, units or geographies) and without that overarching view of the value they add, one shouldnāt be surprised at the silod approach (Iāve given myself a warning there).
At WBA, weāre already looking at business contribution to 6 key systems transformations that need to happen for the 2030 Agenda to be realised, in the food, urban, circular, energy, digital and financial systems. Beyond thatā¦weāre not sure and are asking the world this same question. Initial feedback has been to focus future benchmarks on inequality-transformations (such as on income, gender and race inequality).
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Transparency and trust is at an all time low ā this is true for government as well as private sector. There is a crisis of confidence that is spiraling out of control and disrupting society at every level. Companies can actively engage their customers, share information in a timely and transparent manner, and empower its customers and suppliers to start addressing this. The alternative is a cynicism that risks undoing any social or environmental progress that the last decade has seen.
I think one of the most important ways companies can create impact at scale is through employee volunteerism. By offering incentives and meaningfully connecting skills based volunteering opportunities back to its workforce, they not only harness human capital in a wide range of ways but also normalize a culture of volunteerism. This can, of course, ripple across communities, supply chains and societal structures and demonstrate impact far beyond the initial project.
In America, thereās an important focus right now on diversity & inclusion, and breaking systemic barriers that have led to generations of inequality and inequity. I recently wrote about how partnerships must be a cornerstone to any companyās response: https://www.poligagehorizons.com/blog/hanne-dalmut. One under explored area is rethinking supply chain & procurement. More and more companies are going beyond Tier 1 & Tier 2 suppliers to mitigate risk related labor exploitation. They should do the same to think through supply and procurement, looking at new ways to positively leverage its value chain to diversify to new suppliers and create impact at each level and opportunity. (@gilmancd had a great point about this in Q2 as well, spurring a good back & forth thatās worth the read!)
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Q3. Beyond the basics, what are the key social transformations that companies can contribute to?
At Heifer International, a driving focus of all our work is supporting the farmers and food producers we work with to reach a Living Income. We work with communities to determine benchmarks that quantify household costs necessary to live with dignity (based on geography within a country and household size, including categories such as: nutritious food, education, housing, medical care, transportation, emergency funds, etc.) and then collaborate with them to work out what is needed to close the income gap. This is of course economic, but also has very critical social implications.
Financial freedom and social transformation are inextricably linked; I think recent events around the world, including those tied to Black Lives Matter, have made that abundantly clear. It is virtually impossible for social justice and social sovereignty to be achieved without stable, livable incomes that set a foundation for sustainable socio-economic advancement. So, while itās currently more in the early adoption stage, I would say that Living Incomeāand not just how to close the gap with standard interventions, but also closing the gap through more equitable and livable farmgate pricesāneeds to be considered a basic, core contribution of any company who sources any commodity.
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Most of our businesses are not built to think about social impact first. We focus on profit maximization, giving back to our shareholders. However, if you really want to make changes to this, it needs to be a combined effort both by the business and the shareholders. They need to prioritize corporate social responsibility, ethics, environmental sustainability, etc. just like their other core business areas.
The good thing is, many businesses are now focusing on these. Before YY Ventures, I spent ten years at Microsoft where I have seen many examples of this. Microsoft CEO Satya Nadella repeatedly mentioned empathy as the driving factor of their current culture where they think of people first rather than business. For example, deleting facial recognition data, or not using personal information for business gain, or most recently a big initiative to train 25 million people who have lost their jobs due to Covid-19.
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completely agree with thisā¦ as mentioned, part of the challenge (a key part Iād argue) is to start using the language and understanding the behaviour drivers of those who will ultimately act and drive change - the businesses and ultimately the people buying their products and services.
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Iām curious as to whatās on the list of basics? And then, whether the outcomes of the additional ones are then driven by the basics?
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A3: Education and awareness raising ā for example around topics to help people live safe and healthy lives. Businesses have a huge platform for providing information and drawing attention to particular topics ā for example, Avonās network of Representatives are rooted in communities and can offer lifesaving sign-posting to women experiencing domestic abuse. Weāre leveraging this in our Isolated Not Alone campaign, which aims to draw attention to the spike in domestic violence during the recent lockdown as well as provide funding to frontline services supporting survivors of violence against women and girls. In this campaign, we are united with our sister companies in the Natura &Co group ā Natura, The Body Shop and Aesop.
Campaigns such as this show how companies can come mobilise to address current or immediate needs. When we work together for a common goal, we can achieve so much more. Openness to finding ways we can join together and empower each other to go further together is crucial.
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Aiden, I was fortunate to be at BFG in Oxford 2 years ago when the facilitators did a āstock-takeā of who worked for who in the room - it led to about 10-15% of the audience being āBusinessā, and the other 85+% of the audience working for non-profits, governments, academic institutions or other grant-aided organisations.
What I donāt know is if that meant that the 85% were not well-paid or that there was not enough Business there to win the fight against Poverty!!! (And please keep the pressure on business and red tape in equal measure).
Hamish, I would refer you to our study to show just how ESG as it were pays the bills: https://www.colorado.edu/program/fpw/DAPL-case-study
Completely agree with the traditional emphasis on outputs and activities, and we have seen some of the consequences of over-reliance on these indicators throughout the Covid crisis. Companies that score well against these low-level indicators have been proven to have not embedded their policies and principles within their businessesā core as the immediate response to the crisis has been to create heavy downward pressure on suppliers and workers. Part of the problem must be that once indicators are set reviewing and changing them becomes an almost impossible task, and these indicators quickly become exercises in compliance. How can organisations like Shift, as they look for more meaningful indicators of actual impact, avoid creating a new set of compliance regulations and test, monitor and adapt the indicators as evidence becomes available of their effectiveness, āletting goā of the old ideas as we go?
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