Xerosphere

By Eric Olson, Senior Vice President

The publication of BSR’s latest report on sustainable consumption, which describes the topic as the “New Frontier in Sustainability,” gives me cause to reflect on more than a decade of work in the field. I entered the “field” of sustainability under the influence of corporate pioneers such as Ray Anderson of Interface and thought leaders such as Paul Hawken, Amory and Hunter Lovins, and Bill McDonough, who together shined a bright light on the role that business can and must play in the transformation of our global economy from one based on the linear “take-make-waste” industrial model of the 20th century to one that recognizes the need to fully account for environmental and social impacts on a cyclical, “cradle-to-cradle” basis.

The current wave of interest in sustainability (and sustainable consumption) can therefore be seen, in part, as the “mainstreaming” of ideas that have been around for a long time. At the same time, it is important to note that we have learned a lot over the last 15 years—both about the nature of the challenges and opportunities we face (the “what”) and the tools and approaches we need to address them (the “how”).

So when we refer to sustainable consumption as the “new frontier” in sustainability, what we have in mind is the translation of thought leadership into action—sustained action, on a massive scale. The report argues for the practical application of a systems-based approach, in which tangible near-term actions such as radically increased resource efficiency buys us the additional time needed make the more radical investments—in things like alternative energy sources and materials and behavioral and policy changes—that will be required to achieve a truly sustainable economy in the long run.

By Aron Cramer, President and CEO

As the 2010 reporting season winds down, and the debate over integrated reporting heats up, it is a useful time to take stock of where reporting is today, and where it may be headed.

Integrated reporting is the topic du jour for report wonks. It's an idea whose main selling point is persuasive: requiring environmental, social, and governance (ESG) matters to be included in the single report of record a company issues would be a great step toward the mainstreaming of sustainability into business decision-making.

Maybe.

It's equally possible that such a step could have the unintended consequence of reducing, or dumbing down, the ESG content on which companies report. There are two primary reasons for this.

First, the regulators--and company lawyers--will begin to take a much greater interest in the assertions made about sustainability performance. I've heard this from multiple senior executives. It is not hard to imagine this having a chilling effect on some of the aspirational language contained in reports. And as most company report managers will tell you, it is precisely such aspirational language that makes a report a tool for advancing company strategies and commitments.

Second, there is only so much space in an integrated report. As a practical matter, it's likely that integrated reporting could result in a decline in the amount of information being presented in a formal report. The obvious fix to this problem is to provide information through other channels, such as social media, or issue-specific reports. But if the answer to this problem is to create new vehicles for ESG information, doesn't it defeat the purpose of an integrated report in the first place?

What's more, the vision of integrated reporting is also muddied by the ever-changing media landscape. Integrated reporting is rising as a concept just as the information world is disintegrating. With people seeking out their own take on information and news, and with multiple sources ready and able to deliver just that, it may be that the concept of an integrated report is swimming against the tides. This has nothing to do with values or purpose, and everything to do with the realities of 21st century communications. It is possible that an integrated report is to sustainability what the daily newspaper is to journalism: a model that won't survive the digital revolution.

But these may well be issues that can be worked out, and there is considerable energy ready to do just that. The Global Reporting Initiative expressed its support for integrated reporting by 2020, and the International Integrated Reporting Steering Committee is likely to announce new steps forward in the coming weeks. South Africa has taken the lead in realizing that vision, with the 450 companies on the Johannesburg Stock Exchange now required to issue integrated reports, and a committee has been established to create the guidelines. Bob Eccles at Harvard Business School is conducting a working conference to explore the topic further in October (I serve on the steering committee for the event). And rumors are that the G-20 will put this topic on its agenda for 2011 when France holds the Chairmanship.

Integrated reporting is an idea whose time has clearly come. Now the task is to make sure that it's a practice we're ready for.

This post was also published on FastCompany.com's Ethonomics.

By Aron Cramer, President and CEO

As the 2010 reporting season winds down, and the debate over integrated reporting heats up, it is a useful time to take stock of where reporting is today, and where it may be headed.

Integrated reporting is the topic du jour for report wonks. It's an idea whose main selling point is persuasive: requiring environmental, social, and governance (ESG) matters to be included in the single report of record a company issues would be a great step toward the mainstreaming of sustainability into business decision-making.

Maybe.

It's equally possible that such a step could have the unintended consequence of reducing, or dumbing down, the ESG content on which companies report. There are two primary reasons for this.

First, the regulators--and company lawyers--will begin to take a much greater interest in the assertions made about sustainability performance. I've heard this from multiple senior executives. It is not hard to imagine this having a chilling effect on some of the aspirational language contained in reports. And as most company report managers will tell you, it is precisely such aspirational language that makes a report a tool for advancing company strategies and commitments.

Second, there is only so much space in an integrated report. As a practical matter, it's likely that integrated reporting could result in a decline in the amount of information being presented in a formal report. The obvious fix to this problem is to provide information through other channels, such as social media, or issue-specific reports. But if the answer to this problem is to create new vehicles for ESG information, doesn't it defeat the purpose of an integrated report in the first place?

What's more, the vision of integrated reporting is also muddied by the ever-changing media landscape. Integrated reporting is rising as a concept just as the information world is disintegrating. With people seeking out their own take on information and news, and with multiple sources ready and able to deliver just that, it may be that the concept of an integrated report is swimming against the tides. This has nothing to do with values or purpose, and everything to do with the realities of 21st century communications. It is possible that an integrated report is to sustainability what the daily newspaper is to journalism: a model that won't survive the digital revolution.

But these may well be issues that can be worked out, and there is considerable energy ready to do just that. The Global Reporting Initiative expressed its support for integrated reporting by 2020, and the International Integrated Reporting Steering Committee is likely to announce new steps forward in the coming weeks. South Africa has taken the lead in realizing that vision, with the 450 companies on the Johannesburg Stock Exchange now required to issue integrated reports, and a committee has been established to create the guidelines. Bob Eccles at Harvard Business School is conducting a working conference to explore the topic further in October (I serve on the steering committee for the event). And rumors are that the G-20 will put this topic on its agenda for 2011 when France holds the Chairmanship.

Integrated reporting is an idea whose time has clearly come. Now the task is to make sure that it's a practice we're ready for.

This post was also published on FastCompany.com's Ethonomics.

By Peder Michael Pruzan-Jorgensen, Managing Director, Europe, Middle East and Africa

“Know what you carry” was the threatening message that met me many years ago as I crossed the border between two South East Asian countries. The accompanying noose on the sign left no doubts to the consequences of not knowing what I was (inadvertently or not) transporting.

Knowing what you carry is becoming a major corporate responsibility issue for a wide range of industries. From internet services companies to container ships, companies face the mounting challenge of better controlling what happens inside their service offerings. Expectations differ from industry to industry, so it begs the question, “How far does business’ responsibility extend?”

Telecommunication and internet service providers have long battled a range of views of what responsibility they should have for content transported through their wires and portals—not a simple question when 24 hours of content are uploaded to YouTube every minute.

The shipping industry—which transports a third of global trade on 240 million trips each year—also faces great challenges in controlling its immense cargo. Many of us still remember the horrific images of the Chinese workers who had suffocated in a container trying to get to the U.K. And, unfortunately, human trafficking is just the tip of the iceberg with other illicit transport including electronic waste, timber, and counterfeit products.

With the continual rise in transactions in both these industries, inevitably comes a rise in new regulations and expectations that companies deploy a range of measures to reduce the possibility that they are complicit in issues such as human rights violations.

Yet the response to these new expectations can be as varied as the expectations themselves. In the internet sector, some claim that companies should carry liability for supporting public policy goals and remove certain types of content. At the same time, free speech advocates worry about the “slippery slope” and make a compelling case that placing any liability on companies will only serve to chill freedom of expression, especially in closed societies.

On the flip side, the container shipping industry has focused mainly on ensuring legal compliance and has maintained the position that the ultimate responsibility for the content in the ”box” rests with the shippers and the customers. Yet, there too, change is afoot. A few of the major shipping lines are asking themselves if, in fact, they should have an opinion about the content of the cargo they move around the world. The world’s largest container shipping line, Maersk Line, recently made headlines across the world when it announced that it would stop transporting illegal unreported unregulated fish (IUU fish) and that it was reviewing its policy regarding acceptance of future seafood shipments.

While these two industries are taking different tacks, the questions are ultimately relevant to all industries: What criteria should you use to determine if an otherwise legal transaction is ethically unacceptable? How do you determine corporate complicity? Given the impracticality—and impossibility—of individually checking the millions of transport containers and video uploads, just how far does the responsibility of the company and industry extend? And when is it right to impose self-control—and when is it not?

What do you think?

By Marshall Chase, Manager, Advisory Services, BSR

The U.S. financial reform legislation signed into law yesterday includes a provision requiring publicly traded companies to report on their use of “conflict minerals”—including gold, tin, tantalum, and tungsten—whose trade helps fund armed groups in the Democratic Republic of the Congo (DRC).

While stakeholder campaigns have focused on the use of these minerals in the information and communications technology (ICT) sector, conflict minerals also make their way into a variety of other supply chains, which means the legislation is likely to affect industries including jewelry, automotive, canned goods, aerospace, energy, and others.

For companies new to this subject, BSR’s recent report identifies significant areas for action, such as:

1. Supply chain responsibility, including monitoring and verification through opportunities such as the ICT industry’s supply chain transparency initiatives, which are open to non-electronics companies
2. Government engagement to support international peace-building efforts and stronger, more accountable local governance
3. Capacity-building efforts to encourage equitable local development initiatives and improve conditions at mines

Look for more from BSR on this subject, as we continue working with companies to define the role of the private sector in addressing the issue of conflict minerals.

By Faris Natour, Director, Research & Innovation

Ever since the extent of the environmental, economic, and social damage of the oil spill in the Gulf of Mexico became clear, blame has been assigned to BP, its business partners, the U.S. government, and, perhaps most appropriately, all of us. Then, earlier this week, Chrystia Freeland, global editor at large for Thomson Reuters, offered a new theory in the Washington Post: The “cult of corporate social responsibility” is to blame for the spill, and for that matter, for the financial crisis and many more unnamed “business disasters of the past 24 months.”

As a 10-year veteran of this “mini-industry” of CSR, as Freeland calls it, I took offense. The oil spill and the financial crisis happened despite CSR not because of it, so we need more—and more effective—CSR, not less.

As is often the case with editorials questioning the value of CSR, Freeland bases her arguments on a definition of CSR that is anywhere from outdated to just plain wrong: She equates CSR with green marketing and philanthropy and argues that it detracts from what really matters to business and society—the core business.

Instead, Freeland argues, companies should focus on their core responsibility of making a profit in ways that benefit rather than harm society. I fully agree—and so do many in my field, as that is the very definition of CSR.

Indeed, an increasing number of companies understand that sustainability is key to their long-term success and are integrating CSR into core business strategy. This is evident in my daily work: All of the projects I am working on right now involve not just the CSR champions at the company, but representatives from legal, human resources, product strategy, health and safety, marketing, and other functions.

One oft-cited example of this approach is General Electric. In the company’s latest Citizenship Report, CEO Jeffrey Immelt states that “the key question is, where can GE apply its innovation, knowledge, and expertise to create new products and services while helping to solve these tough problems?” CSR is defined as innovating new products and services; it does not get more “core” than that.

Freeland closes with a very important point: It is the role of government to ensure that companies operate in a manner that benefits rather than harms society. I could not agree more, but it’s wrong to assume that CSR and effective government oversight are mutually exclusive, or even diametrically opposed. Business and society share an interest in avoiding environmental and other disasters through a combination of rigorous management systems at the company and effective regulation by government.

Unfortunately, the media do not publish stories about disasters averted, but if they did—and if they looked at the reasons why—they would find that the credit was often due to CSR. Rather than causing disasters by distracting companies from their primary functions, CSR can actually help prevent them by helping companies perform their primary functions well and more sustainably. Therein lies the primary business benefit of CSR. After all, for business, the cost of avoiding a disaster is always much smaller than the cost associated with the disaster itself. We would be hard-pressed to find a better example of this than the BP spill.

By Dunstan Allison Hope, Managing Director, ICT Practice

I didn’t know it at the time, but it was a phone call that would change my life. It was November 2005, and a group of internet companies wanted BSR and Harvard’s Berkman Center to help explore the human rights to privacy and freedom of expression that were of growing risk in many markets around the world.

It’s now July 2010, and I’ve just facilitated my final meeting of the Global Network Initiative (GNI). I’ve completed a handover to the young organization’s new executive director, Susan Morgan. In the intervening four and half years, BSR joined forces with the Center for Democracy and Technology to run a consensus-building process that culminated, in October 2008, with the launch of the GNI and the publication of new Principles and Implementation Guidelines on Freedom of Expression and Privacy.

During this time, I’ve helped run 22 in-person multi-stakeholder meetings, drafted and re-drafted hundreds of documents, and spent thousands of hours on the phone. Considering the hours invested by other participants, this adds up to human time and effort on a gigantic scale.

This got me wondering: Was it worth it? What does the experience of the last four and a half years tell us about the significance of multi-stakeholder initiatives such as the GNI?

Looking back to late 2005, it is striking how much has changed:

* First, new standards have emerged where previously there were none. The Principles and Implementation Guidelines offer valuable direction to companies in the communications industry on what to do when faced with demands from governments that may lead to violations of user rights to privacy and freedom of expression.

* Second, whole new avenues of collaboration on human rights issues among companies, NGOs, academics, and investors have opened up. In the face of increasingly significant policy- and regulatory-based moves around the world that threaten user-generated content and privacy, a new coalition of networked and informed advocates has been created.

* Third, and significantly, two new communities have emerged: communities of people inside internet companies who are now much more familiar with human rights, and communities of people inside human rights organizations who now have a much better understanding of the implications of new technology. With communications technology increasingly pervasive in our modern lives—and with growing challenges to individuals’ human rights—this development is not one to be underestimated.

There is still, of course, much more to do, and no one should be under any illusions that a multi-stakeholder initiative on its own will lead to the type of systemic change that we all want to see. In particular, I’d highlight three challenges, all of which are very well known to the GNI:

* First, much greater participation from all parts of the information and communications technology ecosystem—not just internet companies—is required if future IT networks are to be designed to protect human rights.

* Second, much greater participation is required from companies, NGOs, and academics from outside the United States and northern Europe if the impact of the GNI is to be truly global.

* And finally, a huge challenge remains to engage and influence the government entities that are increasingly pulling the private sector (usually unwillingly) into violations of freedom of expression and privacy.

The GNI has brought together a diverse group of determined and driven individuals and organizations that have the opportunity to play a significant role in the protection of human rights in the internet age. It won’t succeed in protecting human rights alone; but neither are we likely to protect freedom of expression and privacy without it. It is my assumption that this same conclusion—that a multi-stakeholder initiative is a necessary but not sufficient driver of change—can be made for other similar efforts.

Dunstan Allison Hope is coauthor of Big Business, Big Responsibilities (Palgrave Macmillan 2010). This book considers the impact of corporate responsibility over the past decade and includes a chapter analyzing the emergence of the Global Network Initiative.

By Nandini Hampole, Associate, Advisory Services

BSR recently met with a number of leading women entrepreneurs in Jeddah as part of a three-part workshop on corporate social responsibility and human rights for Saudi companies, NGOs, and employees of the Jeddah Chamber of Commerce and Industry (JCCI). This meeting was a unique opportunity to better understand developments in the Kingdom regarding women’s participation in the private sector and in the job market.

In recent years, expanded educational opportunities for ambitious young women have increased the share of female entrepreneurs in the Kingdom. Seventy-two percent of registered women owned businesses operate outside the home—making them one of the largest groups in the Middle East and North Africa region according to a recent study undertaken by JCCI and the Monitor Group. In addition, fifty-eight percent of university students in Saudi Arabia are women, and separate retail bank outlets for women have increased their access to financial services. The recently launched U.S.-Saudi Women’s Forum on Social Entrepreneurship provides opportunities for Saudi women to enhance their business and leadership skills. This includes launching CSR ventures which help solve local community and ecological problems.

These opportunities, while encouraging, may overshadow some challenges that remain in fostering female entrepreneurship in the Kingdom:

• Male guardianship: Current Saudi law requires women to seek permission from men to register their businesses under the man's name, travel, and perform other business and everyday-life duties. This contributes to legal and regulatory barriers in creating business, employing workers, registering property, getting credit, and growing their businesses.
• Limited government assistance: The Saudi government has initiated only a limited number of programs targeting women’s development. Most of the current initiatives receive support from the business and academic communities.
• Lack of business experience: The majority of Saudi women do not work outside of the home, so they often lack business experience and exposure to vital skills that contribute to fueling entrepreneurship.

In a fast transforming era, the Saudi government has started pushing for reforms to bring more women into the workforce—a push that is part of a larger campaign to increase the number of Saudi nationals employed by the private sector. (The current eight percent employment rate of nationals is much lower than the government’s 30 percent target.) The Saudi government has already taken a few steps to address these challenges:

• The Labor Ministry has modified the Labor Law (2008) to make it easier for men and women to interact in a professional and business environment.
• Likewise, women no longer have to get approval from their male guardians to accept or leave jobs.

These encouraging developments open the space further for business to play an important role in fostering women entrepreneurs who in turn will create new jobs for men and women alike. For instance, banks can provide seed funding, create “entrepreneur accounts,” and help raise capital as part of women-specific services they already offer. Likewise, businesses can partner with programs such as the U.S.-Saudi Women’s Forum on Social Entrepreneurship to teach financial literacy, create and build organizations, and be a testing ground for new women entrepreneurs. Ultimately, businesses should be strong advocates by showing women that they too can become entrepreneurs.

With sustained efforts between businesses and government, we will see greater opportunities for women entrepreneurs in the Kingdom in the near future.

By Marshall Chase, Manager, Advisory Services

Two recent events on opposite sides of the United States will have significant implications for industries ranging from high-tech electronics and aircraft engines to commodities like cans and cutting tools, whose supply chains source minerals like gold and ores containing tantalum, tin, and tungsten. In Washington, D.C., the financial reform legislation passed by a House-Senate conference committee early June 25 included a provision requiring companies to publicly report on their use of so-called “conflict minerals” from the Democratic Republic of the Congo (DRC) and neighboring countries. And in California’s Silicon Valley, the trustees of Stanford University have voted to support shareholder resolutions on the same subject.

These regulatory and investor actions demonstrate that stakeholder campaigns focused on the eastern DRC—the site of the world’s deadliest conflict since World War II—are gaining increasing attention. The region’s trade in minerals used as raw materials in many products plays a critical role in funding armed groups in the DRC, and the use of these minerals in the information and communications technology (ICT) sector has been the focus of several NGO campaigns.

In part due to the NGO focus on the ICT sector, that industry may be the best prepared to handle any new supply chain transparency requirements. Already, ICT industry efforts are underway to develop supply chain verification procedures for “conflict free” tantalum and tin. However, the lion’s share of conflict minerals (except for tantalum) are used outside of ICT, and increased investor pressure and government legislation, if passed into law, will force many companies in other industries to address this issue.

As companies come to grips with the demands being placed on them, it’s important to keep the bigger picture in mind: The goal is not to eliminate minerals sourced from the eastern DRC. The goal, ultimately, is to end the conflict and the resulting suffering faced by those in the region. One of the ways that companies can support this goal is by developing transparent and verifiably conflict-free supply chains for minerals from the region, which will support the economic development and security that the region needs.

Merely attempting to stop the use of minerals from the region is likely to do little to accomplish the broader goal, for at least two reasons: First, it is nearly impossible, at present, to guarantee a “conflict-free supply chain,” because verification programs are only starting to be implemented and will take time to develop and perfect. Second, a blanket ban on all minerals from the region would affect miners, traders, and others who do not contribute to the conflict, and these individuals—as well as the millions of people in the region who depend on the minerals trade—would face significant hardship if their business were cut off.

Companies now facing pressure on this issue should also consider a strategic approach that goes beyond a focus on supply chain transparency, and may include things like participation in industry or multi-stakeholder groups, support for development programs in the region, and perhaps encouragement of diplomatic efforts to end the conflict. Broader approaches can complement and ensure the success of supply chain efforts, while speeding the stabilization of the region.

By Jeremy Prepscius, Managing Director, Asia, and Helen Zhang, Administrative Assistant

An interesting article (article is in Chinese) recently published by the All-China Federation of Trade Union (ACFTU) explores the differences between the new generation of migrant workers in China—defined as rural, migrant workers who are 16 years old or older—and their parents’ generation, in terms of their backgrounds, their work-life expectations, and their awareness of labor rights.

The article presents several startling statistics: Over 61 percent of the total migrant-worker population in Chinese cities (over 150 million people) is between 16 and 30 years old, indicating the potentially huge social impact these workers will have on the business environment. This new generation of workers is also less willing to return to their rural hometowns for agricultural work, since 89.4 percent of the young generation does not have agricultural experience—a result of following their parents to the city during childhood. Also, 55.9 percent of the young workers aspire to settle down in the city and own property. This new generation has a greater awareness of their rights and therefore higher job expectations. Besides wages, they are also more concerned with other benefits such as employment contracts and social security insurance, the safety of their working environment, the company’s reputation, and opportunities for self and skill development.

Besides different attitudes, experience, and expectations, the younger workers are also taking a more “active approach” to addressing these issues, as seen in the recent wave of strikes to hit China’s automobile industry. These strikes indicate that business will likely face pressure from both workers and the government. On one side, company management is likely to face pressure from the workers for higher wages and other work-related benefits and rights, and, on the other side, the government is likely to strengthen its policy and legal supervision to protect the rights of these workers in order to maintain social stability.

To continue to thrive in this pressurized environment, companies will need to think more about what their workforce expects rather than what the minimum compliance requirements are, and begin to revise their employment terms and conditions offered to these workers. Wages and working conditions are key; however, opportunities for training and career development, workers’ psychological needs, and health and safety issues will also require more attention. In short, as the Chinese worker modernizes, the employers and workplaces will need to pay attention and keep up as well.

By Virginia Terry, Manager, Advisory Services

For decades, creative minds have gathered in the Calvin Klein showroom on New York’s 39th Street to contemplate stylish jeans and trendy underwear. Last week BSR members from consumer products and food companies gathered in the same space for a day dedicated to exploring the new frontier of sustainability: sustainable consumption.

The workshop began with a mission to consume. Participants, five-dollar bill in hand, spent 20 minutes in Times Square, finding different ways to consume, all while contemplating the relationships between the product’s value, cost, and price.

In the afternoon, the mission took on a future-oriented dimension. Now participants were asked to rethink and redesign four different products in four different locations: a laptop in Dhaka, a wrapped sandwich in Strasbourg, pain relief medicine in New York, and champagne in Mexico City. Our goal was to deliver value while radically diminishing the impacts.

With product design and consumer engagement typically viewed at opposite ends of the value chain, our “product rethink” required that we see consumers not as just end-users of a product but as co-designers of the service. At the same time, we needed to address how local infrastructures must be adapted so that product recapture and material re-use is built into the system. In fact, recapture was essential to the original product design and functionality. In the end of the rethink, our value chain went from linear to looped.

We rounded out our afternoon with a discussion on creating a vision for sustainable consumption with RecycleBank’s Ian Yolles, Marc Mathieu of BeDo, and BSR’s Aron Cramer. The lively conversation yielded interesting food for thought:

• The topic of sustainable consumption challenges fundamental paradigms and assumptions. The first step of simply exploring sustainable consumption and its implications for companies requires leadership and conviction.
• Sustainable consumption will require that companies lead the consumer, developing solutions that consumers haven’t yet articulated, much less demanded. Nike’s Considered Design and its “closed loop” manufacturing process is one example of this.
• There is a false choice between consuming smart and consuming less. Companies can develop multi-faceted ways to deliver a product or service which also encourage reduced consumption.
• Influencing consumer behavior toward more sustainable choices will require that we activate social networks and peer circles.
• The challenge of sustainable consumption must be framed as an opportunity and inspiration that will mobilize people and tell a story of hope.

The conclusions from the day are aligned with how BSR is exploring sustainable consumption and the opportunities for companies to innovate and evolve their strategies. While much has been gained over the last several years through incremental improvements in material inputs, processing, and distribution, we believe transformative progress demands greater attention to other segments of the value chain, such as product design, consumer engagement, use, and end-of-use.

The workshop was the first of many BSR events and projects that will focus on the challenges and opportunities of sustainable consumption. Stay tuned for more ideas and chances to engage.

By Cody Sisco, Manager, Advisory Services

Ensuring minimum standards for responsible business conduct within any company is a large undertaking. The challenge of extending those standards to suppliers and sub-tiers of supply chains is complex and evolving, which is one of the reasons this work can be so interesting, frustrating, and rewarding.

Over the past few years I’ve worked with many individual companies, industry groups, issue experts, and civil society to try to improve company practices with respect to their supply chains. The questions posed run the gamut:

• What are the risks in our supply chain?
• Where should we focus our attention?
• How do I get my colleagues motivated to change how they source to consider suppliers’ sustainability performance?
• How do we address poor conditions?
• Where does my company’s responsibility end and where does the supplier’s begin?
• What leverage does my company have?
• How can we shift our approach from mitigating risks to also create value for the company?

Over time, I’ve learned that the answers to these questions, while specific to any particular company’s situation, can also be generalized and formulated into guidance applicable to any company. The result is the new guide for supply chain sustainability from BSR and the United Nations Global Compact. This guide represents a comprehensive, practical, and (I hope) inspirational set of practices and examples that squarely address the most significant questions from companies about how to make progress on supply chain sustainability. The topics covered include getting started, establishing expectations, determining scope, and engaging with suppliers and other stakeholders. (See a full table of contents here.)

The practices and examples in the guide are comprehensive—meaning they cover all the issues covered by the Global Compact principles: human rights, labor standards, environmental sustainability, and anti-corruption. However, this guide is only the first step. Supply chain sustainability remains a complex and challenging aspect of corporate responsibility and one that requires continuous attention and innovation to ensure that all stakeholders in supply chains can benefit from the improvement of social, environmental, and economic impacts.

By Linda Hwang, Manager, Research & Innovation

At first blush, the setting for BSR’s sustainable consumption workshop last week might seem ironic: The room—Calvin Klein’s New York showroom on 39th Street—featured a disorderly array of clothing racks; boxes of men’s jackets, trousers, and casual shirts; and women’s jeans, handbags, and shoes arranged on a long table. But these props served a more important purpose: With a group of 20 representatives from food, agriculture, apparel, retail, and personal care and beauty companies, we wanted to explore our current system of consumption and the business opportunities to radically change that system.

At the start of the day, we gave each person a five dollar bill and sent them on a field trip through New York’s storied Garment District, past the New York Times building, the Port Authority, porn shops, and theaters on the edge of Times Square. Their only instructions were to take in the sights, sounds, and smells of everything around them, from the teeming tourists, rushing commuters, and street vendors to the products, stores, and signs. Most importantly, they had to consume something for $5.

They returned with a variety of items, from bananas to cups of coffee to a black pashmina shawl. Two participants pooled their cash for a young man who needed $10 to fix his bicycle chain to continue home to Vermont.

We asked the following questions about their purchases:

* What was the price?
* What is the utility and value of the product?
* What is the cost?

What followed was a rich discussion around phrases that came up like “assault shopping” and “wants versus needs.” One man who flew into New York to join the workshop said he felt swept up in the urgency of consumption all around him, and that “mandatory consumption” might be an appropriate phrase to describe the value of his experience. Another woman read aloud from the packaging of her purchase: organic, low-fat yogurt, complete with a removable and recyclable sleeve. She noted that the label failed to advertise “no flavor.”

The three people in the room who bought bananas (purchased separately from Dean & Deluca, a fruit stand, and a corner store), highlighted the challenges associated with product information. Not all bananas, nor the workers who pick them, are treated equally. There is a long history of worker exploitation and land pressures associated with producing the cosmetically perfect, uniform-looking bananas that we eat for breakfast. On the one hand, the lack of this type of information for some goods is sometimes compensated for by the values associated with specific brands. In other words, long-time fans of establishments like Dean & Deluca may trust that the store sources only “good bananas.” On the other hand, there is so much information lobbed at consumers today that sustainability-related information often becomes background noise that gets filtered out.

At the end of that discussion, we all agreed that the challenges associated with consumption are clear: We need a new system around consumption that allows all individuals to meet their needs within the confines of planetary boundaries. What is less clear, and what we spent the remainder of the workshop exploring, are the business opportunities associated with leading that transformation.

BSR has launched a multi-year initiative on consumption to spark a dialogue that is not currently taking place within the business world, and to explore what we consider a tremendous opportunity to tackle this next frontier in sustainability. As a first step, we’ll be releasing a report on the business opportunities in addressing consumption, as well as a second workshop in London this September to continue testing these ideas with companies. Keep an eye out for the next installment of this blog post, where we’ll bring you highlights from the second half of the workshop.