Wednesday, October 01, 2014

Oxfam and Amnesty on human rights regulation and risks for companies

This neutrally-titled piece on the Amnesty International website "European companies allowed to reap rewards from deadly conflict mineral trade" shows a possible direction of travel for EU based or EU trading companies with regard to proving they 'do no harm' via their operations, relationships and sourcing.

"The European Union is failing to stifle a deadly trade in conflict minerals, a coalition of rights groups including Global Witness and Amnesty International warned today, ahead of weak new legislation being discussed in Parliament.

A new analysis by Global Witness shows that companies are bringing billions of euros worth of minerals into Europe without having to disclose if their purchases finance armed groups or human rights violations in countries ravaged by conflict.

“At the moment we have no way of knowing what European companies are doing to avoid funding conflict or human rights abuses,” said Michael Gibb of Global Witness.

“The European commission has proposed legislation it claims will tackle the problem, but the draft law only goes so far as to suggest companies voluntarily check and declare the source of their minerals. Studies show companies simply don’t check their supply chains, unless they are required to. Putting it starkly, this legislation will not meaningfully reduce the trade in conflict minerals.”

So campaigners want companies to be legally obliged to check their supply chains.

I can see why. The devil in that idea, is of course in the detail. Hammers can be used to crack nuts, but that doesn't mean they are the best tool, but then they are effective.

Companies, of course, do check their supply chains without being forced to. At least say, the top few thousand in Europe, depending on how you define 'check'.

We all know checking alone won't solve many/any problems, it's what happens with the results that counts, until we bump up against the complex barriers of national law and expectations, culture and institutions and their effectiveness.

What is clear is that campaigners won't be stopping these requests any time soon, and that in some sectors, mining for example, we're seeing more and more reporting requirements.

I can't predict if and when EU companies will be forced to check their supply chains (however that is defined) but if I had to bet whether reporting requirements on the state of supply chains will increase, I'd say it will.

Reporting, after all, is the great government compromise between campaigner demands and big company progress, without being seen as going too far in 'restricting trade'.

In this second recent NGO piece, "Child laborers bring case against food companies: “You’re enabling enslavement” Oxfam write that:

"A class action suit brought by a group of trafficked children from Mali to the US 9th Circuit Court may have an impact on how corporations develop their business models in the future.

In John Doe et al v. Nestle et al, child plaintiffs argued that Nestle, ADM, and Cargill aided and abetted enslavement (and numerous violations of international and US law) in the companies’ cocoa supply chains. The former child slave laborers were allegedly trafficked by cocoa growers into Cote D’Ivoire and forced to work in fields that supplied cocoa beans to the defendants in the case. The court held that they could bring the action under the US Alien Tort Statute. Since 1980, courts have interpreted this statute to allow foreign citizens to seek remedies in US courts for human rights violations for conduct committed outside US borders."

Now, this is just the latest salvo in a long running series of cases against companies for alleged connections to human rights abuses.

In the long run, the companies involved, in this case, Nestle, matter less than the fact that lawyers are trying to find ways to use old US laws to attack companies on human rights issues.

In this particular case, if asked my view, I'd say the idea that Nestle, ADM and Cargill knowingly aided and abetted enslavement is rather far fetched.

However, the lawyers may be able to make the companies uncomfortable in the public eye, and that's been enough to claim victory and secure money for lawyers and some others in the past. And if the case goes to trial, (none have yet, they are usually thrown out, or settled) there's always the chance that the companies can be criticised for unknowingly aiding and abetting enslavement, at least in the court of public media opinion.

The Oxfam blog notes that:

"The John Doe can is significant because it exploits the narrow opening that the Supreme Court left open for Alien Tort Statute plaintiffs following their ruling in the Kiobel v. Royal Dutch Petroleum Co. case in 2013. In this case, the Supreme Court effectively closed the door to most foreign nationals suing foreign corporations in US federal courts. The plaintiffs in Kiobel were Nigerian citizens who claimed that Dutch, British, and Nigerian oil-exploration corporations aided and abetted the Nigerian government during the 1990s in committing violations of customary international law when they brutally crushed peaceful resistance to aggressive oil development in the Ogoni Niger River Delta."

So the case, and its outcome, is worth keeping an eye on.

---

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Three focused, detailed and practical sustainable business events for your diary

How to get beyond policy, manage risk and build relationships

10 November, 2014, London. More details here. (In Association with the Institute of Human Rights and Business)

With: John Lewis, Nestle, First State Investments, Aviva, RBS, New Look, ABB, Ericsson, Novartis, PUMA, the Economist, Oxfam and many others.


An exclusive two-day executive training workshop, certified by the CSR Training Institute

30-31 October, 2014, London. More details here.

With direct experience from: Arcelor Mittal, BP, Anglo American, Rexam, Golden Star, BHP Billiton, Shell, and many others 


Collaborate effectively with suppliers and NGOs, understand policy and enforcement trends
28th-29th October, 2014, London. More details here.

With: Unilever, Lord Mandelson, Greenpeace, Nestle, Wilmar, TFT, ADM, Mondelez, M&S, Waitrose, APP, Golden Agri, and many others 

Tuesday, September 30, 2014

Greenpeace exclusive on High Carbon Stock land use, and what it means for business

Grant Rosoman offers an update on what's happening in this complex and highly important area for businesses concerned about deforestation and sustainable land use

Market transformation is happening: a growing number of companies involved in palm oil and pulp and paper have adopted No Deforestation policies, and have declared they will implement these commitments through the High Carbon Stock (HCS) Approach.

Now as a next step, leading plantation companies with commitments to eliminate deforestation from their supply chains, NGOs and technical support organisations met recently in Singapore to establish a HSC governance and standardisation body.

This body, the HCS Steering Group, will work together to demonstrate that immediate action can be taken to break the link between deforestation and high-risk commodities, such as palm oil and pulp and paper. (continues below)


Go figure 

The companies involved in the process are Asia Pulp and Paper (APP), Cargill, Golden Agri-Resources (GAR), Golden Veroleum Liberia, Wilmar and the producer members of the Palm Oil Innovation Group, Agropalma and New Britain Palm Oil.

The international NGOs involved include: Conservation International, Forest Heroes, Forest Peoples’ Programme (FPP), Greenpeace, National Wildlife Federation, Rainforest Action Network, Rainforest Alliance, Union of Concerned Scientists and World Wide Fund for Nature (WWF), and as observers, The Nature Conservancy and World Resources Institute as well as the technical support organisations Daemeter, Proforest and The Forest Trust (TFT).

The mission of the HCS Steering Group is ‘To ensure that there is a practical, transparent, robust, and scientifically credible approach that is widely accepted to implement commitments to halt deforestation in the tropics while ensuring that the rights, livelihoods and aspirations of local peoples are respected.’

The HCS approach was first developed by Golden Agri Resources, TFT and Greenpeace in 2011.

Put simply, it is a tool to help companies and others implement commitments to end deforestation. The methodology to implement the approach aims to provide a practical and credible way to identify degraded areas suitable for plantation development and forest areas that merit protection to maintain and enhance carbon, biodiversity and social values.

For companies, HCS is part of a suite of actions to deliver on their commitments to prevent further deforestation. Various consumer companies including Mars, Nestle, Colgate Palmolive, Neste Oil and Unilever, refer to the HCS methodology in their responsible sourcing policies.

In practice the approach is to integrate HCS assessments with High Conservation Value (HCV) assessments, protection of peatlands, and processes to accommodate local communities’ livelihoods and aspirations, respect their rights to their lands and to give or withhold their free, prior and informed consent (FPIC) to proposed developments.

In a significant breakthrough, the companies involved have all have agreed to stop any further land clearing for plantations until High Carbon Stock assessments have been completed and management plans enacted to protect High Carbon Stock areas.

The parties which met in Singapore nominated representatives for the HCS Steering Group to lead a process for further development and global standardisation of the HCS methodology. This includes seeking review and advice from a science committee and expert guidance based on a range of field trials.

To assist its widespread adoption, the Steering Group will develop a process to ensure quality control of the use of the methodology, in coordination with institutions including the RSPO, FSC and the High Conservation Value Resource Network.

A ‘Consultative Forum’ will be established, and we welcome all relevant stakeholders to take part in it, to ensure that the Steering Group has a means of sharing its progress and to receive feedback to hone the HCS Approach. The wider the participation, the broader the positive impact can be for social and environmental protection.

Grant Rosoman is the solutions coordinator for Greenpeace’s Forests campaign.

For more information, see www.greenpeace.org/forestsolutions

---

Andy Tait, senior campaign adviser for Greenpeace, will be discussing the above at Innovation Forum's conference "How business can tackle deforestation - Collaborate effectively with suppliers and NGOs, understand policy and enforcement trends" on October 28-29 in London.

He'll be alongside all the leading players in the debate, including APP, Wilmar, Golden-Agri, New Britain Palm Oils, Unilever, Nestle, Mars, M&S, McDonald's, Aviva Investors, EIA, Lord Mandelson, Robertsbridge, Tony Juniper, The Forest Trust, Ikea and many others. Sign up at the link above. Full brochure here.

The conference will then be repeated on April 14-15 205 in Washington DC. Contact me if interested. tobias.webb@innovation-forum.co.uk

Excellent three minute video on why sustainable urbanisation matters



Click here if you can't see it on the blog or in your email. Edward Norton narrates. It's very well done.

Some context is here.

"The video, entitled An Urbanizing Planet, takes viewers on a stunning satellite-viewed tour around our planet. By combining more than 10 datasets, and using GIS processing software and 3D graphic applications, the video shows not only where urbanization will be most extensive, but also how the majority of the expansion will occur in areas adjacent to biodiversity hotspots."

"Wildlife numbers plunge by 50%" - WWF report in pictures

Here's a link to the Guardian story/picture gallery about the new WWF and the Zoological Society of London report on wildlife decline. 

You really ought to take a look at it. 

It makes for pretty sad reading. Chart below. 

We're obsessed with carbon, we should be more obsessed with plants and animals (sorry, 'natural capital', see my last post on language if interested)

The inevitable question for this blogger that then occurs, as usual is "what can business do about all this?"

Rather than write yet another five point checklist, key elements of which would be found all over the web from people smarter than me, let me just point you towards a free useful briefing on a key element of all this, forestry footprints, which can be found here.

Monday, September 29, 2014

Does jargon numb us against reality in sustainable and responsible business?

An email at the weekend from someone who inspired me to work in this odd area of responsible business made me think.

Why, he asked, are we using such vapid and meaningless terms to describe what matters to us?

Why do we talk about 'natural capital' when we perhaps might also, alongside, use terms like 'wildlife', or 'plants and animals', or 'the planet'?

Have we used terms like 'stakeholders' to accidentally suck the meaning from the more emotive 'people?' (I may be as guilty of that as anyone)

What does that mean for actually making things change? Quite a lot possibly.

Does 'natural capital' really inspire anyone as a term? Does 'capacity building' turn CEO heads?

Yes yes, I realise that as the field evolves, technical and terms are needed to describe what we mean succintly and to encapsulate complexity.

'Natural capital' is one of these. I get that.

Capacity building is really important to put into action, I realise.

But my friend who wrote to me has a point.

If we suck all the meaning out of what we fight to achieve with technocratic or worse psuedo-management terms, it does become much easier to justify under-performing against our only real metric.

That's being able to look at what we do, and say we make a positive difference.

At the end, that's all that matters.


An excellent further rant on all this by Brendan May can be found here

Sunday, September 28, 2014

Date for your diary: Abu Dhabi Sustainable Business Leadership Awards and Forum 2015 - February 17-18 2015

I'm happy to tell readers that we're working with the Abu Dhabi Sustainability Group, to organise and run the Abu Dhabi Sustainable Business Leadership Awards and Forum 2015 in Abu Dhabi.

The awards and gala dinner will be held on February 16th. This will be followed by a leadership, strategy and management conference on February 17-18 2015.

The conference will be a mix of CEOs, senior managers, NGOs and others in the usual way.

The event will be a mix of international best practice and local expects discussing how to drive sustainability and corporate responsibility into companies operating into the region, and the benefits of doing so well.

If you are interested in taking part in some way, please contact my colleague Nadine.Hawa@innovation-forum.co.uk 

More details to follow in due course. Thanks for reading. 

Wednesday, September 24, 2014

Asia Pulp & Paper video on sustainability, six reasons why it's an example of good communication

There's a good video here and below from Asia Pulp and Paper about their progress to date on sustainability.

I've covered the company for years, more recently with good news, rather than bad, which is nice.

Here's a link to read some past and recent posts and see a captioned set of photos on their supply chain.

This video is a really effective piece of communication, for these six simple reasons, which other companies would do well to take note of:

1) It communicates complexity clearly. This is hard to do. It does it well.

2) It has credible voices, environmentalists, NGOs, local experts and of course the company. BUT:

3) The company itself is not always centre stage, it's about the issues, not the company in isolation.

4) It's not cheesy. That matters. There are no smiling stakeholders, no bad elevator muzak. Thank god.

5) It strikes a nice balance between mini documentary and very effective PR (nothing wrong with that).

6) It's about the right length. From doing lots of online training, I've found any information rich video longer than ten minutes should usually be broken up in two or more videos. Retention for the viewer seems to improve if you do this.

I noted that YouTube comments are turned off. I can understand why given the controversies surrounding deforestation.

That raises an interesting question for me. At what point does preventing critical comments, or any comments, become prevention of rights to reply on social media?

The issue though, as we all know with social media, is it is so easy for people to make casual, often damaging comments which are sometimes not rooted in fact, or are deeply subjective.

I have to say, if I was APP, I would have done the same thing in this case. But one must be careful not to set precedents with this rationale.

That aside, the sustainable forestry issues and dealing with them, are what matter more.

See the video, linked here and below.




(I should declare a potential conflict of interest here. Robertsbridge, the consulting group, is sponsoring my conference on this area of preventing deforestation on October 28-29 in London. Tony Juniper, the video's presenter, is a founding partner. They also sponsored this management briefing on the topic. However, this is not why I am posting this, I'm doing it because I do think this is a good piece of communications)

Tuesday, September 23, 2014

Seven proven ways to get colleagues on board with sustainability and corporate responsibility

Wayne Dunn, author of a few recent excellent pieces on stakeholder engagement, offers some thoughts for readers on that all important stakeholder group of internal executives and managers

Here's his other recent articles that may be of interest, all highly practical:

The top five mistakes companies make in engaging stakeholders



Internal stakeholders may be the best investment you can make in the sustainability of your stakeholder engagement and corporate social responsibility (CSR) programs!! Seriously.

We all know examples where the people dealing with communities, stakeholders and responsibilities are ghettoized in a corner of a project or company and not seen as part of the ‘real business’.

Best...
They are tolerated, sometimes even encouraged, but when budgets get tight they are often squarely in the cutting line.

Not a very sustainable position to be in. You don’t want to be there and if that is where you are you want to change your positioning.

Successfully engaging internal stakeholders is key. Do it right and other parts of your organization will recognize the important contribution your work makes to profitability, shareholder value and their specific interests.

Drop the ball on internal stakeholder engagement and you are likely near the front of the line the next time cuts and downsizing happens and near the back of the line for budget increases.

The core principles for successfully engaging internal stakeholders are much the same as for other stakeholder groups.

Some of them include (in no particular order):

1) What’s in it for them? Think of their interests

Take ‘what’s in it for me’ from top to bottom and side to side of your company through finance, human resources, investor relations, engineering, C-suites, etc.

Think through what is in it for them if your work is successful. How does your success help their success?

Then think through what impact it has on them if your work fails? What happens if your project or company loses its social license?

Think these through, make lists and communicate them (more on that later). Keep them updated with specific examples

2) Build allies, find champions

Even with your most compelling arguments not everyone will become a raving fan of your work. But, if you engage appropriately some will, or at least they will be overtly supportive.

Work with them. Help them to know more about your work and what it means for their area and interests, for the company and for other key areas.

Give them the information, support and rationale to be a champion for you.

3) Share stories from their peers

Stories are great for communicating. Find some that can help you to reach internal stakeholders.

Find short, pointed stories on how CSR/stakeholder engagement and other related areas had big impacts on particular areas and then share them appropriately.

One of my favourites involves a CFO of major global mining company. I met with him near the conclusion of a project where I was doing an assessment of their social license/CSR work in a particular geographic region they were working in.

They were doing incredible in that region, clearly one of the best examples in the world (this was in 1999 and it is still one of the best – they were way ahead of the game).

But, the systems and successes they realized in the region I assessed were not consistent across their operations. They had countries and regions where they were doing little or nothing. Big risks. And they didn’t see them.

I explained the risk to the CFO and that if they had a problem, if something came up in those areas they would have a hard time to respond to an agitated public and confrontational stakeholder groups (think about making friends in the middle of a mob!)

I think he was quite happy to see me leave his office.

About a month later the company had a cyanide spill that, while technically not a major concern, quickly became a major international issue for them and even for the country they were headquartered in.

The spill happened some distance from their mine and in a community in which they had literally zero relationships, but one that had seen their impact and traffic for a few years. All vehicle traffic to and from the mine passed through this community.

One can imagine how the community felt as trucks drove through it daily, going to and from the mine and nobody from the company ever came by, nor did they have much of a chance at jobs or business at the minesite.

The community used the spill to get attention, and attention they got. Suddenly there were advocacy and special interest NGOs all over the community and the incident got a lot of global media attention.

Share price plummeted and the company went into emergency response. Except, they didn’t really have the relationships with international stakeholders to mount a quick and effective response to this situation. (think again of building relationships in a mob)

A couple of months later when I was back at headquarters, the CFO actually asked to see me. He had been through a pretty rough period.

As the share price tanked the company was suddenly getting all sorts of attention it didn’t like from investors, lenders and other financial stakeholders.

They found themselves offside of important agreements like debt to market capitalization covenants. 

Suddenly, a skeptical CFO was a believer. The success of stakeholder engagement and CSR programs did have real meaning and value for his job. 

4) Don’t be a do gooder. Keep your organization’s interest paramount

Do good work but don’t be a do gooder. Your work and the good you do is important for sure. But, so are the interests of your company. Keep your work consciously aligned with the interests of your company.

Always, always, keep company’s interests at forefront. Link what you want to do to what is good for the company or will mitigate risk for the company. Lose that link and you are lost.

Keep that link present in your thinking and your communications. Your company wants good work but not a do-gooder. Same for the stakeholders you are working with.

5) Learn their language

You will be much more effective at communicating with various internal stakeholder groups if you ‘learn their language’. Hint: Do-gooder language won’t get you very far in the CFO’s office!

Learn enough about their world and priorities that you can communicate with them in a way that they can hear and that doesn’t make you seem like you’re from a foreign planet (which is how some of them may see stakeholder engagement and CSR before you start to educate them). 

6) Be passionate, but not fanatical

Most of us working in CSR and stakeholder engagement are passionate about our work. So too are many working in other areas of your organization.

Passion is a gift. Cherish it.

It is perfectly fine to be passionate about your work and the impact it is having (on stakeholders AND for shareholders). But, don’t be fanatical about it. Passionate is constructive. Fanatical is destructive.

This is a simple communication skill but often can be challenging to apply, especially when projects and initiatives feel so important.

Be conscious that there is a fine line between passionate and fanatical and stay on the constructive side of it.

7) Assertive humility: Humble AND assertive

Temper all internal stakeholder engagement with assertive humility. We’ve all seen do-gooders that come across as ‘holier than thou’. It is a turn-off.

We’ve also seen the meek and mild who struggle to make a point and don’t communicate effectively.

The work you are doing is important. Very important. So is the work that others in your company are doing. Recognize both of these realities.

Internal stakeholders are key to the success of your work. Do not assume that they are automatically on your side. Invest time in understanding them and their interests and why your success supports their success.


Learn to engage and communicate with them in effective ways and you, your work, your company and your other stakeholders will all benefit.

Advertisement:

Wayne Dunn and Toby Webb are leading an intensive two-day session on How to effectively engage stakeholders in frontier markets.  The program runs on Oct 30-31 in Central London.  Information and registration is available here. Eight places remain on the course from a maximum of 20 participants.

The experts taking part in this workshop have experience at working with companies such as Arcelor Mittal, BP, Anglo American, Rexam, Golden Star, BHP Billiton, Shell, Vedanta and many others.

  • Find out how the world's leading high impact companies engage stakeholders successfully
  • Learn how your company can get difficult engagement right, in process, in practice and on the ground
  • Discover how to make the case for more resources to senior management - and how to make that stick
  • Expert tips from your peers in a closed environment, learn from those who got it right, and wrong
Objectives & learning outcomes
The programme objective is to provide participants with insights, understanding, tools, techniques, strategies and networks that will help them and their companies to be more effective at engaging and working with stakeholders in what used to be known as emerging markets – now frontier markets.
Who attends?
The Program is designed for professionals from industry, NGOs, governments, civil society and the multi-lateral/international world. The training is cross-industry and is relevant for a  
Participants will include senior executives, those with hands on CSR roles and those new to CSR.
Learn more about the programme here. There are five places remaining.

Other upcoming Innovation Forum events in 2014:


Collaborate effectively with suppliers and NGOs, understand policy and enforcement trends
28th-29th October, 2014, London. More details here.

With: Unilever, Lord Mandelson, Greenpeace, Nestle, Wilmar, TFT, ADM, Mondelez, M&S and many others 

----

How to get beyond policy, manage risk and build relationships

10 November, 2014, London. More details here.

With: John Lewis, ABB, Ericsson, Novartis, PUMA, the Economist, De Beers, Anglo American, Bechtel, Amnesty, Oxfam and many others. 

Monday, September 22, 2014

Eight reasons that sustainability drives financial outperformance

A new report has just been published which makes a compelling business case for sustainability.

Here are the brief highlights, and a link to the full report is here.

Thanks to Bob Eccles at Harvard to bringing this to my attention. It's well worth a read. 

It's based on analysis of 190 papers and significant sources and is written by Gordon Clark of the University of Oxford, Andreas Feiner of Arabesque Asset Management Ltd, and Michael Viehs of the University of Oxford.

According to the email Bob sent me, the report "examines the relationship between sustainability and corporate operational performance, sustainability and the cost of capital (both equity and debt), and sustainability and stock prices. In all three cases, the paper summarizes findings from the literature in terms of the usual three dimensions of sustainability: environmental, social, and governance."

In brief, the report writers conclude that:

•   Companies with strong sustainability scores show better operational performance and are less risky
•   Investment strategies that incorporate ESG issues outperform comparable non-ESG strategies
•   Active ownership creates value for companies and investors.

Now, one might argue that academics and research folk who get paid to promote sustainability (as I do) are bound to make the business case for what they do. That's true, but our world is full of minor conflicts of interest. Ultimately academics and research outfits will live or die by the quality of their work over time. 

This report is no panacea for persuading the deeply sceptical CEO, who will make the point above, no doubt. Sometimes only generational change will deliver paradigm shifts. But the report is well written, easy to read and even for a non-finance industry layperson like myself, makes memorable points. 

We've moving on from Orlitzky et al (2003), a huge meta study that showed: "that corporate virtue in the form of social responsibility and, to a lesser extent, environmental responsibility is likely to pay off".

Now studies, such as this new one, are becoming more confident, and more evidence based as researchers have more time (in that year on year data is available) to back up their assertions. 

Look at the work of Alex Edmans or Ioannis Ioannou of London Business School for evidence of this.

Here's the eight quick takeaways from the new report mentioned above:

1.      Sustainability is one of the most significant trends in financial markets for decades.

2.      This report represents the most comprehensive knowledge base on sustainability to date. It is based on more than 190 academic studies, industry reports, newspaper articles, and books.

3.      90% of the studies on the cost of capital show that sound sustainability standards lower the cost of capital of companies.

4.      88% of the research shows that solid ESG practices result in better operational performance of firms.

5.      80% of the studies show that stock price performance of companies is positively influenced by good sustainability practices.

6.      Based on the economic impact, it is in the best interest of investors and corporate managers to incorporate sustainability considerations into their decision making processes.

7.      Active ownership allows investors to influence corporate behavior and benefit from improvements in sustainable business practices.

8.      The future of sustainable investing is likely to be active ownership by multiple stakeholder groups including investors and consumers.


Advertisements:


Three focused, detailed and practical sustainable business events for your diary

Upcoming Innovation Forum events in 2014:


Collaborate effectively with suppliers and NGOs, understand policy and enforcement trends
28th-29th October, 2014, London. More details here.

With: Unilever, Lord Mandelson, Greenpeace, Nestle, Wilmar, TFT, ADM, Mondelez, M&S and many others 
----

An exclusive two-day executive training workshop, certified by the CSR Training Institute
30-31 October, 2014, London. More details here.

With direct experience from: Arcelor Mittal, BP, Anglo American, Rexam, Golden Star, BHP Billiton, Shell, and many others 
----

How to get beyond policy, manage risk and build relationships

10 November, 2014, London. More details here.

With: John Lewis, ABB, Ericsson, Novartis, PUMA, the Economist, De Beers, Anglo American, Bechtel, Amnesty, Oxfam and many others. 

‘The Social License - How to Keep your Organization Legitimate’ - book review by Paul Hohnen

Useful reading 

Paul Hohnen offers a few thoughts on John Morrison's new book below.

Yes I have plugged the book on the blog before, but it's an excellent addition to anyone's library, so I don't mind doing it again.

Looking for a good ‘bluffer’s guide’ to human rights written by a recognized expert?  This book is not it.

It contains few or none of the slick consultant Venn diagrams, tables and check-lists one often finds in the ‘how to’ business management literature.

Nor is it a book written for an academic audience, rich in theory and new perspectives, and festooned with footnotes.  Bluffers and academics alike, however, will find much to learn.

Anyone who has had the privilege of hearing John Morrison speak, or read his other writings, will know broadly what to expect.

This book is a deeply thoughtful and informative analysis of evolving social, business and regulatory expectations and trends, drawing on the author’s score of years experience at the front line of the business and human rights movement.

The ‘Social License’ is primarily addressed to a policy and practitioner audience in the business, governmental and civil society (including academic) sectors interested in gaining a deeper insight into one of the great challenges of our time: how best to understand and respond to the growing - and even existential  - challenges posed by our current development model.

Drawing on a broad range of well-documented human rights cases, including from the extractives and electronics sectors, John describes and methodically unpacks the concept of the corporate ‘license to operate’.

Noting that societal consent – at a regulatory, political and social level – is needed for most development projects to be successful in the long term, John defines the social licence as ‘the sum of expectations between an organisation and relevant social groups in relation to a specific activity or set of activities.’

Readers hoping to find a comprehensive ‘plug and play’ humans rights framework will be disappointed.

As John points out, while instruments such as the UN Guiding Principles on Business and Human Rights (a.k.a. the ‘Ruggie Principles’) and the OECD MNE Guidelines are valuable and instructive, the realities on the ground are more complex and ever shifting. Like everything else in the sustainability field, a one-time ‘tick-box’ or compliance approach only takes you so far.

The real lesson is that corporate and other actors derive most value from listening carefully to the views of all stakeholders and, using relevant laws and standards, craft a balanced decision.  Thereafter, they need to monitor the situation closely and fine-tune as needed.

As practitioners know, this is a time and resource consuming – and frequently frustrating - task.  As John notes, there are always stakeholders who will disagree, even after being consulted extensively.  There are no easy answers.

He argues convincingly, however, that recognition of the need to acquire and maintain the ‘licence to operate’ and to engage in quality consultation processes is now (and has always been) an essential element of good governance. Failure to integrate such considerations in due diligence measures often ends in tears and, moreover, unexpected costs.

The emphasis on structured and sustained stakeholder consultations and dialogue is, of course, also to be found in the ‘materiality’ approach used by an increasing number of global companies.

Indeed, such is the maturity of this approach, once confined to financial accounting, that ‘materiality matrixes’ mapping stakeholder views of a company’s main sustainability issues, and the company’s own view, are happily becoming common place in sustainability reports.

My main reservation about the book was a nagging sense that it does not always strike the right balance between advocacy (of what should be, and why) and implementation (how to achieve it, within current development model and within the limits of governmental decision-making).

In this context, I would like to have read more about how to address the fact that all too many organizations, both public and private sector, continue to get away with flagrant human rights abuses, with little or no NGO or media coverage or regulator intervention.

If history has taught us anything, it is that the dark default mode of mankind is to pay as little as possible for its labour, energy and raw materials.  And that is precisely why it is so important to constantly promote and defend human rights.

‘The Social Licence’ is an important and welcome new contribution to the body of literature exploring why and how humankind can better live up to the high standards it has set itself, knowing that failure to do so will surely diminish our collective future.

More on the book, here.

John Morrison will be speaking and facilitating debate and discussion at Innovation Forum's conference "Business and Human Rights - How to get beyond policy, manage risk and build relationships" on November 10th in London. Blog readers get a discount to attend, details on the event are here. Contact Charlenne Ordonnez if you'd like to come along. The conference is organised in association with the Institute for Human Rights and Business.

John will be alongside speakers and facilitators from BP, PUMA, Amnesty International, Oxfam, RBS, De Beers, Anglo American, New Look, ABB, Bechtel, Ericsson, Richard Howitt MEP and Daniel Franklin, executive editor of the Economist, amongst others.

This upcoming workshop ten days before may also be of interest:

How to effectively engage stakeholders in frontier markets
An exclusive two-day executive training workshop, certified by the CSR Training Institute
30-31 October, 2014, London

Experts taking part in this workshop have experience at working with companies such as Arcelor Mittal, BP, Anglo American, Rexam, Golden Star, BHP Billiton, Shell, Trafigura, Vedanta Resources and many others. Five places remain for executives.