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At the end of last year, the Institute for Human Rights and Business (IHRB), a global think tank, published its annual top 10 list of business and human rights issues for 2016. Here we highlight four of the main trends particularly pertinent to the CR and sustainability professional

The need for bold leadership
Forced labour can be found in all industry sectors and all locations, with migrant workers, indigenous people and women particularly vulnerable. The term ‘modern slavery’ has mobilised action, says the IHRB, but it cannot detract from evidence that forced labour is frequently a more ingrained feature of the mainstream economy than imagined, facilitated by corrupt and unethical recruitment practices. The think tank believes that the debate will continue on whether stronger labour market regulation is needed to combine a level playing field for responsible business with effective protection for workers.

A test of international political will in 2016 is, it says, whether more countries follow the lead of Niger and Norway in ratifying the ILO Forced Labour Protocol. Agreed by ILO member states in 2014, this legally binding instrument requires governments to prevent forced labour, protect workers and provide remedy for victims. The ILO 50 for Freedom campaign is seeking at least 50 government ratifications by 2020 and supporting policy and enforcement activity.

Some governments have enacted specific legislation focused on tackling forced labour and human trafficking in supply chains. Support and pressure from business and civil society contributed to the UK’s 2015 Modern Slavery Act, which introduced new transparency and reporting requirements, tougher sentences for offenders and stronger compensation of victims. Now that guidance has been issued, from March 2016 companies operating in the UK with over £36m global turnover will be required to publish annual, board-approved statements to disclose steps they have taken to prevent ‘slavery and human trafficking’ occurring in any part of their businesses. Similarly, progress continues in harnessing the purchasing power of public procurers to develop the market for ethical products and services (such as in amendments to the US Federal Acquisition Regulation).

The IHRB says that one way that companies can demonstrate leadership and commitment is by banning recruitment fees paid by workers. Adopting the ‘employer pays’ principle, as a number of leading companies have already done, would be a major step in preventing exploitation and reducing the risk of forced labour, it maintains: “More concerted efforts will be needed in 2016 to make such actions a common standard for all major companies.”

The growth and significance of Big Data
The advent of “big data”, where large datasets are analysed to provide insights into a particular topic, and the “Internet of things”, where an increasing number of devices and appliances are connected to the Internet, means that personal data is the new currency, collected and traded. As a result, implementing safeguards for privacy and other rights becomes more challenging, highlights the IHRB.

While there are many benefits of “big data” for consumers as well as public health and society, questions remain over how to ensure effective privacy safeguards on the collection, storage, use and sharing of personal data. Innovations like “wearable” technology, which record and store health data, and facial recognition, that makes identification instant, are increasingly becoming standard in our social networking and raise new challenges for the ICT sector. In the years ahead, says the IHRB, all companies will effectively become ICT companies due to the reliance on technology to deliver services, such as automobiles, energy and even the oil and gas sector. What’s more, cities around the world are already making use of big data to manage traffic, energy, and the day-to-day business of government.

The more data companies collect the more others will want access to it, raising hard questions on how to secure personal information from theft or attacks. High profile cases of data breaches in 2015, including TalkTalk, Ashley Madison and Experian, all signal what is likely to follow in 2016 and beyond.

More available data also creates more opportunities for surveillance and profiling, which could lead to discrimination.

At present, there is low public awareness on the part of both business and civil society on how big data can affect the right to privacy, warns the IHRB: “There is minimal guidance available to help companies navigate this issue, and confusion over what kind of data is collected, how it is used and how it is stored. In 2016, IHRB will be exploring meaningful avenues for rights protection in an age of big data across a number of sectors.”

Climate change’s wider impacts
Global attention in 2016 will turn to making good on COP21 commitments. Leadership on climate justice must come from cities, countries, regions, intergovernmental organizations and business, says IHRB. Although one company’s contribution to climate change can be minimal, the combined impacts of business activities globally could make a difference. It is this diffused nature of responsibility for adverse climate impacts that makes it particularly hard for businesses to acknowledge their role in seeking climate justice.

The year ahead will test whether more businesses can scale up climate due diligence, GHG reporting, as well as innovation for and investment in climate solutions. Some companies are stepping up and taking initiative. For example, Unilever is tackling climate change in its supply chains, and IKEA has launched an initiative that supports communities most at risk. BSR in its We Mean Business report lists actions companies and investors can take to address climate change, while others are forming coalitions, such as the Breakthrough Energy Coalition for clean energy, inaugurated in Paris.

Indeed, the momentum created by the COP21 must continue to build in 2016 and beyond.

Implementing the UN Sustainable Development Goals
With an ambitious new global agenda for sustainable development in the form of the UN Sustainable Development Goals (SDGs), adopted in New York in September 2015, attention will shift in 2016 from high-level negotiations to implementation.

The SDGs offer an inspiring and inclusive vision of the future: a world free from poverty, injustice and discrimination and a healthy planet for present and future generations. They also assume a substantial contribution from business as a partner with the potential to contribute in multiple ways to development objectives: as financier, job creator, taxpayer, wealth generator and innovator. But the relationship between business and development – between private gain and public good – is not a straightforward one.

How the business and human rights agenda gains traction, as a crucial approach to implementing the new framework, remains an open question. As the SDGs move from pledges to practice, a wider and better-informed debate is needed around how and in what circumstances business can add the most value; business can be a good partner in delivering on the SDGs but it is not automatically one. If meeting the SDGs requires business involvement, then making business responsible must be a core part of implementation strategies, says the IHRB. The SDGs offer a real opportunity to help normalise and globalise corporate responsibility as a minimum requirement for business operations.

As SDG progress indicators are developed and reporting and review systems established, business performance measures are needed. Public-private partnerships have been earmarked as crucial to the delivery of the SDGs but are already a target of concern. Without transparency and accountability, without clear safeguards on the application of international standards, they risk sidetracking significant public funding without delivering on public goals.

Different players, from the World Bank to civil society organisations, as well as IHRB, are now coming forward with proposed partnership principles. The enthusiasm for partnerships as part of strategies to achieve the new agenda for sustainable development needs to be accompanied in 2016 by an SDG Framework for Responsible Business, maintains the IHRB.

For the full 2016 trends forecast see here. 

 

Communications agency Forster’s recent study of the charity sector reveals how corporate partnerships are being limited by cultural challenges and the over-emphasis on the bottom line, writes George Ames head of activation at the agency. 

Although it sounds counter-intuitive to suggest the charity sector should be looking beyond financial targets, we believe that doing so will help enable the cause behind the campaign to be better served.

When a partnership is brokered, the first question that most ask is how much money it is worth. The pitching process tends to centre on how the money will be used to address a particular cause. However, if a broader view is taken, and it is the issue rather than the money that is given centre stage, the discussion has a different dynamic.

Perhaps the first question should more often be ‘how can we best work together to make a real difference’ not ‘how much money can we raise for the programme’.

The recent Age UK and John Lewis partnership is an interesting example. It has, without doubt, got people talking about loneliness in a way that they didn’t before. Not only have funds been raised but the issue has been catapulted into the national consciousness.
Age UK and other organisations working with older people, such as Independent Age, have said that demand for their services has increased. This is to be commended. And no doubt there will be a long line of fundraisers pitching their causes for the 2016 partnership.

It’s a shame that the only product in the ‘Man on the Moon’ range that raises money is the mug. It is a pity that there is no noticeable presence Age UK in store or online. However, the bigger question is whether for John Lewis, loneliness will just be for Christmas.

Once the last of the Christmas merchandise was shipped from the depots, the new year sales have ceased and people steady themselves for the year ahead, what then for loneliness?

How satisfying it would be if staff, stores and product are aligned to keep the momentum going – perhaps the tech teams could help people to get online; the in-store cafes be used for a range of social initiatives; and the staff could volunteer time to support programmes helping people to keep well through the coldest months of the year. This shouldn’t be a pipe-dream.

Organisations are caught between an urgent need to fundraise and the desire to build longer term, solution orientated partnerships for change. While the potential for corporate-charity collaboration is clear, the reality is often frustrating with the majority of relationships still based on passive giving from business to charity.

I believe the combination of better integration and collaboration, both across the charity’s external relations teams and with the corporate partner, will enable the common ground to be found and a partnership of equals to be formed.

By doing this a partnership has the potential to go beyond raising cash and awareness, as useful as that is, and instead help achieve meaningful and long-term action.

All of us expect our airplane landings to be as smooth as possible, but what about being as quiet as possible? ask Ian Jopson, Head of Environmental and Community Affairs NATS, the UK’s leading air traffic services provider.

With global air traffic set to increase, it’s more important than ever that air aviation works hard to combat both noise as well as the emissions impacts of flying. The design of ever greener aircraft and engines is already helping to combat noise, but there is also an important role for air traffic management to help positively influence the efficiency of every phase of flight.

A smooth continuous descent, instead of a series of steps, results in quieter, more fuel-efficient landings. But it requires extra effort from pilots and air traffic controllers as they need to liaise with each other constantly to manage the aircraft’s speed, thrust and landing settings against external factors such as wind and routing requirements.

NATS’ Continuous Descent Campaign engaged with air traffic controllers across the country and 7,000 pilots, resulting in 18,000 quieter arrivals in a six month period in 2015, reduced costs and CO2 emissions, and positioned the UK aviation sector as a global leader in addressing its environmental impact.

Continuous Descent Operations (CDOs) are well established in the UK, particularly in the London area where average performance across London’s four largest airports is around 86%. However across the rest of the UK the average performance is lower, around 70%.

The campaign set out to improve descents across the UK by 5% to deliver over 30,000 individual quieter flights, save around 10,000 tonnes of CO2 and offer fuel savings worth around £2m. The unique aspect of this particular campaign has been the large scale simultaneous effort across 15 Air Traffic Control units, eight airlines and 23 airports to jointly deliver a step change in performance.

To launch the campaign, NATS sought support of the industry coalition, Sustainable Aviation, of which it is the chair. Sustainable Aviation provided initial points of contact in the airlines and airports and gain their formal agreement to participate and share data; not without its challenges in an industry where competition between individual entities can be fierce. Having brokered a collaborative relationship, NATS then spent several months developing communication materials to support the campaign.

We are the only company in the world to produce information about continuous descent performance and share it with customers and stakeholders. The campaign continues to deliver data and analysis on CDO performance across the UK industry. From the insights provided, airlines, pilots and air traffic controllers are continuing to strive for ever better CDO performance.

By working together with airlines, airports and NATS controllers we are delivering tangible benefits in CO2 and noise reductions, leading to a template for global behavior change for others, and also helping us to meet our goals of 4% and 10% ATM CO2 reduction targets. So it’s win-win all around.

The campaign won BITC’s Responsible Business Awards 2015 in the Engaging Customers on Sustainability category.

The Responsible Business Awards are open for entries until 12 February 2016. 

The corporate world is now well-versed in producing an annual document showcasing best practice. But can sustainability reports actually be used effectively as a stakeholder engagement tool? asks Tom Idle

The practice of producing an annual publication showcasing sustainability achievements and documenting the performance of an organisation in reducing its social and environmental impacts is now firmly established in many corporate calendars.

Increased demand from investors keen to understand the risks and opportunities associated with their investments, and a plethora of benchmarking indices that companies now find themselves plugged into – from the Dow Jones Sustainability Index, to CDP and Sedex – has locked many organisations into fairly expensive cycles of reporting process.

According to KPMG, of the world’s biggest 250 companies, 90% of them now produce a corporate responsibility document. That figure was 83% in 2008 and 64% in 2005.

While integrated reporting – whereby non-financial data is published as part of annual accounts – has so far failed to take off (just10% of the G250 do this), including corporate responsibility data alongside financial reports is now a firmly established trend, with three in five companies are doing this, compared with just one in five in 2011.

And it’s a truly global trend, with companies in India, Indonesia, Malaysia and South Africa currently possessing the highest sustainability reporting rates in the world.

The investment made in these reports – both in time and resources – continues at a pace too. A recent survey carried out by the online community 2degrees found that almost 20% of companies spend up to $120,000 a year producing their sustainability report.

Back in 1992, just 26 corporate responsibility reports were issued. Since then, of course, non-financial reporting has grown into an important vehicle to boost credibility and transparency, as well as to adhere to a number of regulations. In the UK, for example, the Companies Act requires quoted companies to report greenhouse gas emissions in their annual report.

But what about using these reports to engage stakeholders? What about using the content within the report to get people excited about what the company has been doing? Plenty of anecdotal evidence points to the fact that very few people actually read annual sustainability reports. The current challenge facing the reporting fraternity is how their beloved documents might be used to improve communications and relations between a company and its customers, or a board member or a group of investors.

For Elaine Cohen, a sustainability reporting consultant with Beyond Business, CSR reports are not meant to be read, they are meant to be used. “These reports are not meant to be bestsellers,” she says. “A report is a repository of information in one place covering a specific time period, demonstrating the performance, results and impacts of an organisation.”

Cohen says the fact that reporting motions are filed in AGMs and more stock exchanges require sustainability reporting as a basic term of trade testifies to the continuing expansion of CSR reporting. “However, it doesn’t testify to the fact that stakeholders are reading reports. But then, I wouldn’t necessarily expect them to.

“The only evidence we have that reporting is meaningful to stakeholders is the existence of the reports themselves. Surely, if they were useless, more than 8,000 companies around the world would not waste their time publishing them every year.”
Recognising the need to create value from their investment in the reporting process, some companies are trialling a range of techniques to enhance their reports and bring them to life for the intended audience.

For example, at the European broadcaster and telecoms firm Sky, the annual report is just one element of it’s so-called Bigger Picture reporting and engagement strategy. There’s downloadable PDFs, blogs, a new interactive online tool and, as you’d expect, lots of videos. It has even tried to bring some of its core sustainability campaigns – such as its partnership with WWF to protect the Amazon rainforest, offsetting some of its carbon impacts – into its programming schedule. Sustainability reporting is merely one part of Sky’s wider communications strategy.

“Our reporting used to take place during a four-month block of the year. Over time that’s changed,” says Fiona Ball, head of responsible business. “Yes, it’s good having a snapshot at the end of the year but by the time the report comes around, the majority of the initiatives we report on have been and gone.” To avoid time lag, the company now measures the performance and evaluates initiatives as soon as they are finished – and engages people around them straight away.

Sky’s approach is one welcomed by Cohen who says it’s unrealistic to “shove a 150-page report under the noses of a group of stakeholders and expect them to read it and engage around it”.

“But you can extract relevant information from a report and present it effectively, creatively, interactively and selectively to stakeholder groups.

“Presenting a 50-page section on environmental sustainability to a human rights activist may not get you very far. But presenting your policy on human rights and details of your performance and multi-year KPIs on human rights will be a useful start to a meaningful dialogue.”

At the US sportswear brand Nike, the reporting process offers a chance to get feedback – not only on its report, but also on its wider business strategy and initiatives. Leaning on the likes of BSR and SustainAbility to facilitate small stakeholder groups, the company asks panels of experts to provide feedback on early report drafts and to give opinion and advice on things like whether the content is material or relevant, as well as the tone of voice being used. Past participants in the process have included the likes of Lindsay Bass at WWF, Mark Kenber, CEO at The Climate Group and Matthew Thurston, head of product and supply chain sustainability at REI. Engaging stakeholders in the reporting process gives the company’s leadership “direct insight and perspective from external experts,” it says.

Online surveying, using consulting firms to conduct interviews with selected individuals, initiating round table discussions and creating online platforms to integrate stakeholder responses in real-time; many of these techniques are being adopted to complement traditional reports and enhance engagement. However, Cohen has her reservations. “Not all stakeholders were created equal and these interventions mostly serve to tick the box of stakeholder consultation,” she says.

The format of ongoing corporate advisory committees, consisting of relevant and diverse individuals that rotates every five years, is the best approach, adds Cohen. “This forms a permanent sounding board for sustainability issues over time and is a more effective way of capturing changes in sentiment from individuals that are actually engaged and invested in providing good input.

“But the interaction with this group should not be only at reporting time.”

While the nature and practice of sustainability reporting evolves, so too will the intended purpose, says Dr Nelmara Arbex, a senior advisor with the reporting standards body GRI. Some early trends to have emerged from the GRI’s Reporting 2025 Project suggests that disclosure and reporting will no longer be just an accountability tool but will develop as an instrument through which businesses can demonstrate their commitments to big picture goals, such as tackling climate change or improving wealth distribution.

Meanwhile, the proliferation of online social media and analysis tools will continue to throw up a number of challenges and opportunities for stakeholder engagement. “As tools to interact with stakeholders, the reports of the future will not be printed documents, but instead dynamic, accessible data sets,” says Arbex.

“Companies will also have less control. Business performance data will be gathered and analysed using search engines and analysis software, which will empower stakeholders to find new correlations and make independent assessments of the consistency of company communications.”

As Cohen concludes, the creation of a sustainability report does not signal the end of the stakeholder engagement process, merely the beginning. “People seem to think that the sustainability report is the engagement. But the engagement process has a life all of its own. The report is merely the platform that enables engagement.”
 

With 40% of its carbon impact found along the supply chain, GSK has found a novel way to engage and encourage its suppliers to cut energy, water and waste. Tom Idle speaks to the company’s manager for supply chain sustainability, Caroline Rüter

The British pharmaceutical business GlaxoSmithKline (GSK), worth some £65bn, develops, manufacturers and sells a range of products – from medicines and nicotine patches, to toothpaste and the malted milk drink Horlicks.

As the world’s sixth biggest pharma company (behind the likes of Pfizer and Novartis), GSK has huge reach and impact around the world. It was the first company to develop a malaria vaccine which back in 2014 it promised to make available for 5% above cost. In the oft-contentious sector of pharmaceuticals, where brand reputations are continuously battered and bruised by the NGO and charity communities, GSK has worked hard to build responsibility into the company.

Improving access to its medicines – developing new vaccines and medicines faster, accelerating R&D, opening up research, and exploring new delivery models and partnerships – is a central plank of its strategy. A consistent No.1 ranking in the annual Access to Medicines (ATM) Index is testament to this effort.

But with such a diverse inventory of product offerings, which includes brands such as Aquafresh, Nicorette and Night Nurse, it also recognises the carbon impact of not only its own operations (it employees almost 100,000 people and has manufacturing plants and R&D centres in 36 countries) but also within its big supply chain.

“We know that the impact of producing our products and medicines is much broader than simply what we do in our own operations. In fact, 40% of our carbon footprint comes from the raw materials associated with our supply chain,” says Caroline Rüter, GSK’s sustainability manager for supply chain.

But with more than 6,000 raw material suppliers dotted around the world, encouraging each and every one to reduce their own energy, waste and water impacts – thus reducing GSK’s overall footprint – is no mean feat. In 2014, Rüter and her team started the process of collecting carbon, water and waste data from around 200 of GSK’s biggest materials suppliers, covering more than £1bn of the company’s spend on raw materials. “We are now using this data to identify hotspots in our supply chain,” she says.

Data collection has been hugely important. For example, a carbon footprint analysis of GSK’s top 30 products from a revenue perspective, has identified areas for improvement – not least with its Ventolin inhaler which has the highest carbon footprint in its use phase and one of the reasons GSK created an inhaler recycling scheme.

But engaging suppliers and helping them to tackle their impacts is an altogether bigger task – but one which GSK is getting to grips with via its new online information-sharing platform which it expects to lead to emissions reductions within the supply chain of 25%.
“The GSK Supplier Exchange means our suppliers are able to benefit from the experience of others, as well as collaborate – with or without GSK – to accelerate their own sustainability projects.”

So far, 500 suppliers from 45 countries have joined the forum to share practical ideas about improving energy efficiency and reducing other environmental impacts. By enabling supplier companies to talk to each other via a Facebook-like online network and share information, case studies and documents, the theory is they will be able to accelerate their efforts and have confidence to make the necessary investment or business decisions that will make them more resource efficient.

“Our biggest challenge is the vast number of suppliers, as well as the diversity of our supply chain across the entire world – which is why we need to communicate and collaborate at scale,” says Rüter.

Supplier surveys had previously identified that 65% of suppliers did not have an active programme in place to reduce energy costs – and no one single supplier has more than a 1% impact on GSK’s carbon footprint, making the task seem huge. By facilitating a platform whereby suppliers can ask each other, or GSK, for advice or answers to questions, the company gets a unique insight into the challenges currently facing its supply base. As a result of this insight, GSK has been running energy reduction workshops at a number of its supplier sites uncovering and highlighting opportunities cut energy costs by up to 30%.

The business also ran a packaging innovation challenge last year, asking suppliers to come up with new ideas to reduce both cost and the carbon associated with the products GSK buys from them. “Thirteen suppliers responded with 21 ideas,” says a proud Rüter, who is now working with GSK’s procurement teams to take forward some of the ideas which might lead to packaging rationalisation, alternative print technologies or the light weighting of materials.

It’s early days for the Exchange but in 2015 the number of users tripled and 70 individual requests for advice have been logged – all of which have been answered. One of those requests resulted in two suppliers collaborating – one helping the other get his LED lighting project off the ground, saving him about 210,000 KWh a year. In fact, the 40 case studies shared online in the last 12 months have collectively driven more than 300,000 tonnes of CO2 equivalent out of GSK’s supply chain and saved more than £80m across supplier sites.

And the business case for ramping up supplier engagement is ever-increasing, says Rüter, with more stakeholders asking how GSK manages third party risk. As you’d expect, standards and policies on quality, ethics, labour rights, health, safety and the environment are in place. And while GSK looks to work with suppliers to agree improvement programmes where performance gaps are identified, it isn’t afraid to terminate relationships if things don’t improve. “Third party oversight is a strategic priority for us – and we’re investing heavily in it,” she says.

Challenges remain for a company of the magnitude of GSK. But driving its own values to reduce impacts and become ever leaner further along its value chain is a tough ask and GSK is succeeding. “I’m personally very proud of our having set ambitious goals to reduce carbon, water and waste across our entire value chain. And our supplier engagement programme is key to us achieving our target to be carbon neutral by 2050.”
 

This is my final issue at the helm of Ethical Performance. It’s been an extremely interesting and enlightening three years, the spirit of which I shall endeavour to take with me.

One of the main things I discovered is that for all its trendy terms, CSR and sustainability aren’t particularly new concepts. There have always been social business crusaders – John Cadbury and William Lever spring readily to mind. It may all be wrapped up these days in new terms and jargon, but at the end of the day it’s all about running a business – no matter what its size – responsibly and with an eye to the greater good, ensuring the survival of the business, its profits and the planet for future generations.

So it’s heartening to read this month that the latest PwC CEO report shows that the majority of CEOs globally believe that business purpose is as crucial to success as its profits. They might not all agree on the definition of purpose - for some it meant why their business exists, for others it how business is done – but they did all talk of their responsibility to the whole range of stakeholders, including shareholders, supply chain partners, employees, customers and society at large.

It’s a pity that language tends to get in the way. It’s been a bugbear since I started writing about CSR/CR/sustainability– the jargon ‘of the space’.

Even just lately, I’ve heard that one of the biggest industrial leaders in ‘the space’ won’t get involved with anything associated with the term ‘CSR’. Apparently the abbreviation is too tainted with ‘a tick box approach’ and inferences of ‘add-on’ rather than embedded. And as recently at the World Economic Forum in Davos, Unilever’s CMO said CSR is ‘tripping up business’ and that companies should ‘be sustainable, not leave CSR to save the world.’

I don’t see why the terms have to be mutually exclusive. In my three years I have come across plenty of companies who call CSR, erm, CSR and where it’s a totally embedded, sustainable approach. Just because a business has a department or ‘head of’ doesn’t mean it’s a separate part of the business, let alone a ‘bolt-on’.

Whatever you call it, it ain’t going away. It’s only going to become more important.
I
ndeed, given Dee Hock’s observation that “an organisation, no matter how well designed, is only as good as the people who live and work in it”, there are plenty of reasons to be cheerful.

Latest research from the Institute of Environmental Assessment shows that with the spotlight on sustainability and environmental issues following the recent Paris climate talks, prime job candidates are now much more selective about the employers they choose to work for. Over half of “Generation S” candidates would refuse to work for employers who have a record of using slave labour, generating high levels of pollution, employing unsafe working conditions, poor environmental performance, questionable investments and unethical practices. Yes, Generation S is on the move!

Workers in developing countries can use the Accord signed by the likes of H&M, Primark and Zara following the Rana Plaza disaster as a template to improve their own safety and conditions, according to academics. For the first time a new study has looked into the negotiations and brinkmanship that brought about the landmark agreement

In April 2013 1,129 workers died and more than 2,500 were injured when the eight-story Rana Plaza complex collapsed in Dhaka, Bangladesh. The building housed factories that supplied clothes to household brands like Primark, Matalan, Benetton, Monsoon and Walmart.

Worldwide outrage and pressure from trade unions, campaigners like Clean Clothes Campaign and online groups such as SumOfUs and change.org, saw 180 multinational companies sign a legally binding Accord that forces safety inspections on the factories they use in Bangladesh and legal action if they don’t adhere to it.

In After Rana Plaza: Building power for labour between unions and (consumption-based) social organisations published in Organization, Juliane Reinecke and Jimmy Donaghey, of Warwick Business School, interviewed 29 bosses, campaigners and union officials to detail the steps made to form the Accord.

“Groups like Worker Rights Consortium and trade unions had been campaigning for years for the multinationals to do something about building safety with no success,” said Professor Reinecke. “There had been deadly fires and building collapses since the mid-2000s, so to have an Accord signed by so many companies just weeks after the Rana Plaza tragedy is an amazing achievement.

“The Accord is unprecedented in its scope and legally binding nature. Unlike International Framework Agreements, which are agreed between one multinational and a global union, the Accord covers 180 brands to share costs, responsibility and risk, providing a cost-effective way for smaller companies to ensure safety standards. And if they don’t adhere to it legal action can be taken against them.

“The Accord shows that geographic and economic differences within global supply chains may mean that unions and campaign groups need to move towards working together. The utilisation of trade union and campaign groups’ complimentary skills could prove an important part of extending regulation of employment into other less regulated supply chains in developed countries.”

The academics found that the unions - IndustriALL and UNI Global Union - did the negotiating with the companies but talked to campaigners Clean Clothes Campaign and Worker Rights Consortium on an almost daily basis. If negotiations were not working the unions would release the campaign groups to target those companies with online petitions, bad press and demonstrations outside their stores. The mere threat of consumers’ boycotting a brand or a campaign that affected a firm’s reputation was enough in some cases.

“This was very different from one union negotiating with one employer,” said Professor Donaghey. “That hadn’t worked in Bangladesh. Consumer-based activism alone can often be short-term and lack a meaningful outcome other than brand damage. Yet when harnessed with the negotiating skills and power of unions it proved to be a powerful mix.

“Companies have moved manufacturing to the developing world to avoid high regulatory standards, as is the case in Bangladesh. Not only is the labour cheap in Bangladesh, with the lowest minimum wage set at $43 per month, but Bangledeshi-owned factories mean Western firms have no legal liability over labour abuses. And a weak state and low union organisation led to a downward spiral in safety terms.”

An example of the unions and campaigners working together was when they targeted H&M, the largest buyer from Bangladesh’s garment industry, which employs four million people and amounts to 13 per cent of the country’s GDP.

UNI Global Union used Swedish retail workers union, Handels, to meet H&M bosses at its Swedish headquarters threatening action, while they put an advert in one of the country’s biggest papers calling for them to sign the Accord. Meanwhile, H&M were aware Clean Clothes Campaign was preparing to mobilise consumers against them. The pincer movement worked, H&M became the first to sign the Accord.

Sometimes, though, the trade unions found the campaigners unworkable. Online campaigners started a petition against Topshop, but they were already in negotiations with unions and threatened to walk away if they were publicly campaigned against. After hasty conversations the petition was withdrawn and Topshop signed.

Professor Reinecke added: “These social movement groups are not a panacea for developing labour rights in emerging countries. They lack meaningful enforcement, often focus on easy targets rather than the worst offenders and lack a democratic mandate by those workers affected.

“But working with trade unions, who are viewed by many of the brands as being legitimate ‘insiders’ because they share a mutual interest in the well-being of the company and responsibility for the success of collective agreements, there is the template for a coalition to be used in other supply chains in developing countries.”

For a copy of the paper After Rana Plaza: Building power for labour between unions and (consumption-based) social organisations
email  ashley.potter@wbs.ac.uk.
 

East Capital, an emerging and frontier markets specialist headquartered in Stockholm that actively manages €2.1bn of assets in public and private equity as well as real estate, transitioned its East Capital China Fund this January to a “thematic environmental” strategy that seeks to exploit growing investment opportunities within clean technology in China.

Named as East Capital China Environmental, the strategy looks to capture what the firm, the first asset manager in northern Europe to be granted a Qualified Foreign Institutional Investor (QFII) license to purchase Renminbi-denominated ‘A shares’ in China’s mainland stock exchanges of Shanghai and Shenzhen, describes as “the favourable investment backdrop” that the environmental challenges in China offer.

The move comes as the Chinese authorities have been very public about the climate change agenda and embark on a 13th 5-year plan (2016-2020) for economic and social development.

Two of the key tenets of this plan include: (1) Green development in terms of protecting the environment and pursuing environmentally friendly economic growth; and, (2) Openness, whereby China uses domestic and global markets and is more active on global governance. New incentives on renewables, details on taxes and fines, more clarity on Green bonds and the creation of a national carbon market in 2017 are anticipated.

In March 2015, East Capital became the first asset manager to receive approval from Luxembourg’s Commission de Surveillance du Secteur Financier (CSSF) for its East Capital China Fund to invest up to 100% of assets in A-shares via the Shanghai-Hong Kong Stock Connect program. On each market investors can use local brokers and clearers to trade the other’s market.

Karine Hirn, a Partner at East Capital, commenting in the wake of fund’s transition said: “The fight against pollution is a fundamental and structural trend in China, and has also become a governmental priority. This implies strong policy support and large investments, as well as stricter implementation of regulations for the non-environmental friendly companies.”

She added: “China is the largest clean-tech market in the world and the investment universe of environmental stocks consists of fast-growing innovative companies and often upcoming global leaders.”

The fund’s investment universe - both in onshore (A-shares) and offshore China equities - includes sectors spanning clean energy, energy efficiency, clean transport, clean water & air, environmental assets and sustainable agriculture. Hirn pointed out that opportunities through “valuation arbitrage” in onshore and offshore equities across the value chain would be pursued.

Louise Hedberg, East Capital’s Head of Corporate Governance, speaking to Ethical Performance in London on the fund’s launch day (18 January), said: “This fund provides clients with an efficient way of accessing clear solutions to the environmental and sustainability challenges in China. We will look at the entire value chain and seek out suitable investment opportunities.”

Stockholm-based Hedberg added on the fund’s attributes: “As well as having no lock-up [period], the fund is suitable for any investor - be they institutional or retail orientated. And, it’s the type of investment that can potentially excite investors.”

The fund, with around €20m AUM at launch, is managed by Peter Elam Håkansson, East Capital’s Chief Investment Officer, and supported by a local Hong Kong team led by François Perrin, formerly head of Greater China at BNP Paribas Investment Partners Asia.

Founded in 1997, East Capital today has offices besides Stockholm in Hong Kong, Luxembourg, Moscow, Oslo, Paris and Tallinn.  

Among UK Registered funds over the past year to 31 December 2016, the £124.97m Kempen (Lux) Sustainable Eur Small Cap I fund ranked top out of a sector universe of 253 funds with a performance of +19.19%. This compared with +54.39%/10th over past three years and +43.94%/37th over five.

 It was followed in second place over the past 12 months by the £254.12m SLI UK Ethical Ret Acc fund with a performance of +14.80% (+50.59%/ 18th rank over past three years and +72.96%/9th over last five). Pictet-Water HR USD came third and was just slightly behind on +14.73% - versus +58.75%/7th over last three years and +64.33%/14th over past five.

While the SLI UK Ethical Ret Acc fund held its ranking for the past year over Morningstar’s previous analysis to end November 2015, Kempen (Lux) Sustainable Eur Small Cap I and Pictet-Water HR USD swapped positions.

Within the European funds sector, the €217.58m Öhman Sweden Micro Cap fund came top out of 1,263 funds. It posted a performance of +46.44% for the past one-year to date. However, over the past three years it posted a quite blistering investment performance of +135.33% (2nd) and an equally impressive +129.11% (4th) for the past five years.

A sister fund of the Swedish investment firm, Öhman Småbolagsfond A, came within the top five funds overall for the past 12 months posting a respectable +29.94% (4th) versus +89.14% (9th) over the past 3 years.

Öhman Sweden Micro Cap itself invests 87% of the fund’s assets in Sweden and the remaining 13% in the rest of Western Europe according to recent report from the fund as of 30 September 2015.

The fund’s top five stocks by weighting as of this date were: 1. Unibet Group PLC (5.0%); 2. NIBE Industrier AB B (5.0%); 3. Swedish Orphan Biovi (3.5%); ITAB Shop Concept AB (3.3%); and, Nolato AB B (3.1%). Sector wise, Industrials accounted for 20.9% of the fund, followed by Real Estate (16.9%), Basic Materials (13.8%), Consumer Cyclicals (12.9%) and Consumer Staples (12.8%).

It was followed in second place in the sector over the latest 12-month period by the €22.26m ID France Smidcaps C fund, which posted a performance of +37.86% (+110.70% for the past three years and +116.87% (9th) for last five years). Third top 1-YTD was the €433.27m Delphi Nordic fund with +37.57% versus +118.90%/3rd and +96.32%/31st over past three and five years, respectively.

We are not unaccustomed to becoming imposters by the time we reach our desks each morning. By design, we’ve been taught that professionalism in American office society mostly equates to assimilation -- requiring that, as employees, we self-adjust to fit into a ready-made office culture governed by unwritten rules. Our identities, which transcend across race, gender, marital status, sexuality, education and economic background, are not to be considered acceptable fodder for a politically-correct workplace environment.

Thus, the running concept of bringing one’s 'whole self' to work is riddled with ideological flaws. Largely, thought leaders mistakenly scapegoat the real need for a collective conversation on approaching the challenge. Instead, they place the onus for imparting passion, personality and personal creativity to a job solely on the backs of employees — not the leadership or company culture itself which sets the tone for safety and security for the entire organization. Employees, without proper leadership guidance, are forced to tuck away their identities for fear of risking their reputations, their jobs and their futures.

As part of our continued discussion on diversity in the workplace, we spoke with James Wright, a diversity and inclusion strategist whose track record includes over 10 years leading diversity communications and talent recruitment at companies like NBC Universal and AOL. He provided us with a broader perspective on thinking about this topic and the changing landscape of identity in corporate culture.

“The idea of bringing your 'whole self' to work is a complex topic,” Wright explained. “CEOs haven’t even been able to master this idea. Let’s consider Apple’s Tim Cook, who was the first Fortune 500 CEO to openly reveal his sexuality. Consider that his discomfort is indicative of an industry, a city, a society, where if a leader must 'park' themselves, it implicitly sends a message that the environment is not safe.”

Wright also submits that, in his experience, some leaders don’t fully bring themselves to their work environment until they have reached the C-Suite level. At this juncture, they have proven themselves, acclimated to the environment, and are now in a position of power where they can slowly become more open and comfortable sharing their true selves.

A recent story published in Fortune Magazine examined the challenges specifically faced by African-American males in corporate America:

“Many of these men, for example, spoke of having to constantly calibrate their public miens: striving to appear focused at the office but not too aggressive; hungry but not threatening; well-dressed but not showy; talented but not too damn talented. [...] Many were eager to discuss the subject of race and the pressure they sometimes feel from having two 'jobs' at the office: an official one, managing a team or division, and the other, 'representing' other African Americans who have yet to make it into the room.”

While challenges abound, Wright is hopeful that data will drive the landscape and grow the need for the business leaders to authentically develop strategies to encourage safe and nurturing environments for employees to thrive and feel comfortable bringing themselves to the work environment.  

“There are 75 million baby boomers in this country, with 10,000 retiring each day. Twenty years ago, having this conversation was unheard of. Religion, sexuality and politics were private matters that weren’t discussed in the workplace,” Wright said.

The workplace is changing drastically. With the advent of technology paired with the influx of millennials (the largest generation outnumbering baby boomers) in the workplace, generational divides are dictating acceptable standards of culture, challenging business-as-usual while requiring companies to accommodate.

The average millennial, Wright continued, was raised with the notion that who they are matters. And with their average tenure of two to three years at a company, most millennials are only vetting for organizations that align with their values and allow them to contribute while maintaining their identity. To be clear, millennials are seeking connections to the industry, not a company logo.

So, how does the changing shift in workplace culture and the growing presence of a sundry of identities translate into on-the-ground action when it comes to encouraging an environment that allows employees to bring their whole selves to work?

Wright suggested that leaders look to diversity and human-resource practitioners to stay abreast of cultural trends and shifts that will point to changing employee identities in the workplace. By knowing what the workforce will look like from a data standpoint, companies can actively develop strategies and programming to engage and support employees beyond tokenism and work to provide an supportive platform to create a thriving workplace environment where employees feel safe to bring their entire selves to the table.

Image credit: PWC Facebook