Caroline Rees of Shift says says CSR commitments are no longer enough. Companies must make deep structural changes to attack the root causes of inequality
As the year comes to an end, it is only natural to think back to the many business and human rights happenings of 2018: Facebook’s inaction as its platform was used to incite rape and murder in Myanmar; the continuing stories of displaced communities in Thailand and Indonesia, forced labour in nail salons in the UK and child labour in brick production in Uganda and Brazil. The appalling stories of sexual harassment across western workplaces, and gender-based discrimination in China. And the growth in attacks on human rights defenders who speak out against business abuses.
The easy formula would be, of course, to write yet another “top five issues in 2018 and what to expect in 2019” piece. But what do those articles achieve? Year after year, they all come down to the fact that while some issues linger, and some new ones emerge, the fundamental problems for society remain.
So perhaps the end of the year should steer us in a different direction. One that aims not to list out all the individual crises of respect for human rights – past or anticipated – nor the commendable responses from a growing number of companies, but instead to address social inequality as a whole.
If companies each continue to exploit the shared resource system of our environment ... the results will be catastrophic
I imagine that 15 years ago companies viewed environmental issues much as they typically view business and human rights today. One day you were called out for the use of refrigerants, the next for pollutants from your transportation fleet; the next, deforestation in connection with your packaging; or the use of concrete, chemicals or water in your supply chain. And no doubt each “new” issue raised questions about the business case – the costs and benefits – of changing practices to avoid the harm highlighted.
That is, until the realisation spread that all these issues are either causes of, or compound the effects of, a single “tragedy of the commons”: namely, climate change. In other words, if individual companies each continue to exploit the shared resource system of our environment for their own narrow self-interest, taken together the results will be catastrophic for our planet and humanity.
With that realisation, action moved from some mid-level managers trying to do the right thing to the C-suite and boardroom showing leadership for change. Yes, there are still laggards and nay-sayers, and for sure progress is too slow. The current political climate in many countries does not help much, either. Yet the fact remains that many thousands of company leaders today have moved beyond quibbling about the rationale for addressing their environmental footprint, and are embracing the urgent, large-scale and collective action – together with government and civil society – that is needed.
In 2019, we need a similar epiphany with regard to companies’ social performance. For there is an analogous tragedy of the commons around us: gross human inequality. At the forefront sits income inequality within societies, but this is underpinned by all the other inequalities of race and ethnicity, disability, gender identity, sexual orientation and so forth, that both exacerbate and are compounded by income inequalities. The World Inequality Lab finds that “the top 0.1% has captured as much growth as the bottom half of the world adult population since 1980” and that, “[i]ncome growth has been sluggish or even nil for individuals between the global bottom 50% and top 1%.”
Social cohesion and stability are a 'shared resource system', on which we all depend to thrive as humans in society
How is this a tragedy of the commons? Well, social cohesion and stability are in many ways a “shared resource system”, on which we all depend to thrive as humans in society. They rely in good part on advancing human dignity, equality, hope and opportunity: the sense that people of all backgrounds can better their lot and build a brighter future for their children.
Yet for decades, companies have acted in ways that squeeze out dignity and opportunity for the most vulnerable workers and communities. New businesses in the gig economy are now celebrated for disrupting entire industries, with too little attention to how they can disrupt human rights.
Meanwhile, corporate commitments or philanthropic pledges by business leaders have frequently masked a resistance to the structural changes needed to tackle the root causes of inequality. And so social cohesion has been gradually depleted, to the point where the resulting tensions and anger – exploited by some for political ends – tear our societies apart and make obvious what we should have known all along: that ultimately, we all lose.
Of course, business is far from the sole culprit. Governments and our intergovernmental system have had a critical role to play. Others have recorded eloquently the continual loosening of domestic regulations on corporate conduct and the strengthening of international trade and investment regimes without equal regard to protecting those people most vulnerable to the downsides of globalisation.
But “business” writ large has been a promoter and beneficiary of these trends for decades. Its interests have often spoken – literally – against the real and deep changes that are needed to how business gets done.
And so, today, business must turn its leadership toward addressing the crisis of gross inequalities in our societies no less than it is doing with regard to climate change; including where that requires changes to the business models and strategies at the heart of the problem.
We need to start taking bold, visionary, collective action – delivered through boardrooms and C-suites
The outlook is worrying but not bleak. We are not working from a blank slate. At Shift, we follow with interest the ways in which some business leaders are recognising the urgency of wholesale change. Some are speaking out about the need to replace financial calculations as the deciding factor in whether to treat people decently, with leadership that recognises that the very fabric of our societies depends on doing so.
CEOs from the apparel sector have been pressing forward their work with unions to make living wages a reality for workers across their supply chains. Performance expectations adopted by the CEOs of mining companies include accountable commitments to implement respect for human rights. Leaders at Hewlett Packard Enterprise and NXP Semiconductors are tackling the root causes of forced labour in their supply chains, and Mars Inc’s CEO Grant Reid has set out to improve the lives of a million people in its supply chain. Yet we are far from critical mass.
So, instead of using this column to run through a suite of seemingly unrelated human impacts of business that we should look out for in 2019, I think we need to stand back and see that these fragmented images are part of one single and troubling picture: the tragedy of the commons that is gross human inequality.
And then we can stop arguing piecemeal about the business case for treating people with respect, and start taking bold, visionary, collective action – delivered through boardrooms and C-suites working hand-in-hand with government and civil society to put respect for people at the heart of how business gets done.
That’s the "tipping point" story we should look for in 2019. We just need enough business leaders to want to write it.
Caroline Rees is president and co-founder of Shift, a non-profit, mission-driven organisation headquartered in New York. It is the leading centre of expertise on the UN Guiding Principles on Business and Human Rights. Visit shiftproject.org and @shiftproject.
Main picture credit: FramestockFootages/Shutterstock
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