Social  issues  and  Sustainability  Tobias  Webb,  November  19  2013  

Stakeholder  Intelligence  /  Ethical  CorporaDon    Tobiaswebb.blogspot.com    

Tobias.Webb@stakeholderintel.com  

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Social  issues,  business  and  governance  

 Sounds  a  bit  academic  and  woolly,  right?      So  let’s  break  it  down  to  what  it  really  means    

Where  environment  meets  human  rights    

•  30  Greenpeace  acDvists  detained  in  the  Russian  ArcDc  

•  Two  aVempted  to  board  a  Gazprom  plaWorm  in  protest  

•  All  arrested  in  a  Commando  raid  •  Charged  with  piracy,  now  hooliganism    •  Russia  clearly  trying  to  defend  ArcDc  exploraDon  interests  

Forced/bonded  child  labour  

•  168  million  children  engaged  in  child  labour  worldwide  (Uzbek  harvest  every  September)  

•  Down  from  215  million  in  2008,  and  245  million  in  2000  

•  More  than  half  are  involved  in  hazardous  work,  considered  one  of  the  worst  forms  of  child  labour.  Uzbekistan  a  key  perpetrator  

So  what  can  a  company  do?  

•  Clear  policy  of  no  tolerance  of  child  labour  in  their  operaDons  and  supply  chain  

•  Due  diligence  on  children’s  rights:  UDlise  the  John  Ruggie  Framework  

•  Partnerships  and  lobbying  to  help  formalise  the  informal  economy    

Another  key  issue:  Transparency  

SoluDon?  CollaboraDon  

•  ExtracIve  Industry  Transparency  IniIaIve  set  up  in  2003  to  combat  Government-­‐related  corrupDon  in  the  oil  industry    

•  “MulDstate  corporate  governance”.  Countries,  NGOs  and  large  companies  all  involved    

•  Set  standard  for  disclosure  of  revenues/deals  •  A  long,  slow  and  bumpy  road  for  signatories    •  Now  broadened,  four  EU  states  +  US  to  join    

Why  is  deforestaDon  also  a  social  issue?  

Other  collaboraIon  based  groups  that  are  driving  change:  

   •  Kimberly  Process:  Conflict  diamonds  •  Sustainable  Apparel  CoaliIon:  Factory  PolluDon  &  Social  

Standards  •  Word  Business  Council  for  Sustainable  Development:  

Lobbying    •  World  Resources  InsItute:  Research,  policy,  mapping  •  Carbon  Disclosure  Project:  ReporDng  and  accounDng  •  Roundtable  on  Sustainable  Palm  Oil:  Standards,  social  and  

environmental  improvements  •  Global  eSustainability  IniIaIve:  CollaboraDon  for  tech  

companies  

When  social  issues  go  wrong  

•  Nestle:  AVacked  by  Greenpeace  in  2010  

Result:  Social  media  reputaDon  meltdown    •  Chiquita:  Sued  by  families  of  Colombians  killed  by  rebel  groups  due  to  ransom  payments  made  

Result:  Huge  reputaDon  damage  and  legal  costs    

Coca-­‐Cola:  Mis-­‐managed  media  and  consumer  percepDons  over  India  water  management  in  2006  

 Result:  BoycoV,  brand  damage,  producDon  halts  and  Indian  management  team  lost  their  jobs    

When  social  issues  go  very  wrong  

Rana  Plaza  April  2013  

•  Factory  of  sub-­‐standard  construcDon  collapsed,  despite  warnings  

•  1129  people  died,  mostly  young  women  •  Brands  audited  working  condiDons,  not  building  structures  

•  Lead  to  creaDon  of  Accord  on  Factory  and  Building  Safety  in  Bangladesh  

Rana  Plaza,  some  posiDve  results  

•  Accord  is  a  “five-­‐year  legally  binding  agreement  between  internaDonal  labor  organizaDons,  non-­‐governmental  organizaDons,  and  retailers  engaged  in  the  texDle  industry  to  maintain  minimum  safety  standards  in  the  Bangladesh  texDle  industry”  

•  October  2013:  1,600  Bangladeshi  factories  covered,  represenDng  about  a  third  of  the  Bangladeshi  texDle  industry  

Nike:  A  posiDve  story,  eventually…  

Nike:  From  ‘devil’  to  leader!  

•  Nike  aVacked  since  1990s  over  labour  condiDons  •  IniDally  defensive,  gradually  opens  up  to  transparency  

•  Following  GAP  in  2004,  publishes  supplier  list  in  2005  

•  Key  player  in  beZer  R&D  and  innovaIon  for  more  sustainable  products  

•  Helps  create  the  Sustainable  Apparel  CoaliDon  •  Donates  R&D,  leads  brand  collaboraDon    

What  about  more  localised  social  impact  work?  

•  Community  volunteering  • NGO  partnerships  • Matching  employee  donaDons  /  Dme  • Going  beyond  compliance  with  employees    • Mapping  country  footprints    (Unilever/Oxfam/SAB  Miller  etc)    

Conclusions  

•  Many  companies  do  good  localised  ‘social’  related  work  

•  A  trend  of  economic/social  value-­‐add  reporDng  is  emerging  amongst  some  global  firms  

•  Global  impacts  &  links  not  well  understood  unDl  recently  (e.g.  Chinese  factory  polluDon)  

Conclusions  •  Today,  in  many  cases,  social/environmental  are  highly  linked,  rather  than  separate    

•  The  Ruggie  Principles  now  provides  companies,  since  2011,  with  a  framework  for  managing  human  rights  impacts  

•  Sustainability  governance  is  only  a  decade  old,  but  the  debates  and  acDons  (Rana  Plaza,  EITI)  are  acceleraDng    

•  We  have  only  just  begun!  

Thank you!

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