Wednesday, September 17, 2014

Useful free briefing on modern slavery and what companies can do about it

The Institute of Business Ethics, the excellent UK charity that focuses on pragmatic solutions, amongst other things, has put out a decent new briefing on modern slavery and what business should be aware of, and can do about it.

Here's the link, it's worth a read.

I know from tracking the stats that more of you read text put in from of you than click on links (natural really) so here's a few key nuggets from the briefing.

Apologies to IBE for over-quoting, but I thought this would be a good way to get some key facts out.

There's a lot more in their briefing than these quotes below:

"The International Labour Organisation (ILO) estimates forced labour leads to $150 billion in profits every year – more than the annual profits of the entire US banking industry".

That's a compelling stat to put in front of senior management. No company wants to be associated with forced labour, but I know many people think it just takes place in isolated North Korean prison camps. Not true at all.

"Risk affect most industries, electronics and high- tech, steel and automobiles, agriculture and seafood, mining and minerals, garments and textiles, and shipping and transportation are all especially at risk."

Shipping and transportation are an interesting inclusion here. More on those below. So of course is construction, as the Government of Qatar is belatedly discovering.

"Despite The Global Slavery Index 2013 awarding the UK and Ireland the best ratings of 162 countries surveyed, “this does not mean these countries are slavery free”, and further research suggests there is no room for complacency in UK businesses with “between 4,200 - 4,600 people in modern slavery in the United Kingdom alone”."

OK that's not many, but it's still shocking. Us Brits (including Scotland, today at least!) pride ourselves on fair play and being a liberal democracy. So hard numbers are shocking. One slave is too many. No company wants to be the one that was involved in domestic market slavery, even inadvertently.

Here's a few cases from the UK which I think are really interesting, and how how easily brands working hard on the issues can end up in the headlines:

"Case 1: In 2013 a group of Lithuanian men agreed to pay for passage to Britain and the prospect of employment: they were to repay the sum through their earnings. On arrival they found themselves shuttled from farm to farm at all hours of the day and night controlled by unlicensed labour providers or gang-masters and unable to escape. The farms they worked on supplied eggs to McDonald’s, Tesco, Sainsbury’s, Asda and Marks and Spencer.

"Case 2: In May 2014 two Hungarian men who forced migrants to work in conditions of slavery were jailed in the UK. The victims, all Hungarian, had been lured to Britain with promises of well-paid jobs but on arrival were forced to work very long days for little money. They were working in a factory in West Yorkshire, run by the bed manufacturer Kozeesleep that supplies mattresses to John Lewis."

More on all this, the Government agenda and some solutions can be found here:


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

Business and human rights      (Lots of coverage of difficult rights issues such as slavery and trafficking)

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, ABB, Ericsson, Novartis, PUMA, the Economist, Oxfam 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, 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 

Stakeholder engagement: Six best practices and one critical principle for success

Wayne Dunn, president of the CSR Training Institute and professor of practice in CSR at McGill, a veteran of 20+ years of global CSR and sustainability projects, offers some advice.

I recently wrote a piece on five mistakes companies make in stakeholder engagement and many of you asked me to give a list of best practices. Here are six.

This list, like the last one, comes from a couple decades of rubber meets the road experience (remember, experience mostly comes from making mistakes or great mentors, or, like mine, both)
Do it right, and reap the benefits 
Honesty, trust & integrity

This is the critical principle and if you don’t get that one right the rest won’t matter.

You may have some short term results but I’m going to be shorting your stock because it’ll blow up sooner or later.

And, if it doesn’t, it should.

In no particular order here are six best practices in stakeholder engagement.

1. Think value and interests – and do it transparently

Remember, you are engaging with the stakeholders because you believe it is in your interest and that it will help you to create value.

Guess what, they are engaging with you for the same reason.

Maybe they value a pollution free world or a reduced carbon world or a child labour free supply chain, or maybe it is better schools or hospitals or something else.

Don’t judge what stakeholders value and what their interests are.

Accept it and, as much as possible, try to figure out how your business, your activity, your work might further your stakeholders’ interests.

Be creative in discovering the value propositions that can align your value and interests with those of your stakeholders.

And be transparent about what your value and interests are. Your stakeholders have it figured out anyway!

2. It’s OK to disagree – but, disagree without being disagreeable.  And stay curious

You will disagree with stakeholders, sometimes with most of them. That doesn’t make them wrong, or you wrong. And no need to be disagreeable. Stay open, stay engaged, and so important to stay curious.

One of the biggest, and possibly most unexpected, social license wins that I’ve ever been part of happened because the geologist, who ‘got stuck’ with community relations, stayed open, engaged and curious.

This was an exploration project 15 years ago and an, at the time, very small gold producer.

Because it was just down the road from a shuttered mine that had lost its social license the company knew they had to do something.

The opposition that had shut down the other mine didn’t want this one to become the first modern producing mine in the country. They had won over some of the local communities.

The engineer spent months, many months in the community. Getting to know the residents, including those who were in vehement disagreement. Trust developed. Transparency happened. Shared interests emerged and were built on.

Not everyone agreed, but the mine got built. Disagreements remained, but people were not disagreeable. And the company’s share price went from 70 cents to over $20!! And the local agricultural economy flourished.

Probably none of this would have happened without a patient, engaged, curious and agreeable geologist.

3. Do compliance but think and act strategic – check the boxes yes, but that is just the foundation

There seems to be an exponentially increasing list of standards, norms and regulatory requirements for stakeholder engagement and all things CSR [Corporate Social Responsibility].

Prof. Wayne Dunn
They are important (some of them anyway) so you can’t ignore them.  But, don’t be consumed by them. If you want stakeholder engagement to add value to your operation and meet your stakeholder’s interests and needs then mere compliance is just the foundation

Figure out what you want to be compliant with, and why. But resist the urge to embrace more and more standards and norms, to check more and more boxes.

There is a comfort and certainty to compliance. There are boundaries and a sense of completeness when you know you are compliant with yet another standard.  It is auditable and defensible.

On the other hand, strategic stakeholder engagement is often ambiguous, uncertain and sometimes even downright scary.

There is no certainty of success.

Getting out there and engaging around value and interests, accepting disagreements and continuing to search for mutually beneficial common ground and shared value is not for the faint of heart. But, it is often where the breakthroughs occur, where value is created and strong relationships developed.

Compliance focus / strategic focus.  It’s not one OR the other.  It’s BOTH.

Spend time thinking about the blend and mixture that is right for your business. It's an investment that will pay dividends

4. Share the credit, multiply the resources.  Find partners!

Actually, the foundation of this best practice was set out in #1 Think value and interests – and do it transparently. But it is so important that I decided it had to be listed separately.

This mostly focuses on your initiatives and collaboration with stakeholders, the ones focused on creating value and meeting interests for you and the stakeholders.

If that initiative is successful who else or what else benefits. Are there other people or organizations that have objectives that would be furthered by success of your collaboration with stakeholders.

If so, they could be potential partners and may well bring financial, organizational, reputational and other resources to the table.

This all sounds a bit academic and theoretical.  What does it really mean?

Say you are a consumer goods company operating in a frontier market and want to increase your local supply chain because it will reduce your costs, add unique marketing pitches to your product, and build reputational capital and social licence.

Or you are a mining company operating in a remote community and want to improve local educational capacity. Your value and interest in this includes; better educational system makes it easier to attract and retain employees, helps create a more qualified and engage-able local labour force, helps expand local livelihood potential, etc.

Or you are a petroleum company and want to enhance local skills training capacity so you are able to recruit and advance more local workers.

In all of these the value and interests of local stakeholders are self-evident. And there are many other examples in health care, environment, agricultural development, etc.

The opportunity is in thinking about who or what else shares an interest in this. Local economic, social, educational and health issues are of interest to national governments, international agencies, multi-laterals such as the United Nations, World Bank, etc., NGOs, National Development Agencies such as USAID, DfID, DFATD, GIZ*, etc.

They are also stakeholders in the success of your efforts.

Your company’s investment and support in these areas can help these stakeholders to meet and further their objectives. And they can bring resources and expertise to support your efforts. Note – the above are all real world projects.

Spend time thinking about who else benefits if you succeed. Be creative. Be strategic and remember – broad and inclusive value propositions can create a lot of value for you and for stakeholders (this is a fundamental tenant of Silicon Value entrepreneurship but that is another story…)

One of the great things about finding partners and sharing the credit in stakeholder engagement and CSR is that it is seldom a zero sum game. By sharing the credit you often get more credit yourself, and more resources to contribute to success.

(continues below)
How NOT to do it, but alas still a common approach!

5. Communicate so you are heard and understood

Communication strategies, methods and tactics will vary from group to group and area to area.

It is more than just words and message. It is about communicating so you are heard and in ways that connect to the capacities, values and interests of the audience.

6. Define stakeholders broadly and strategically – go beyond compliance

Beware of simply meeting narrow, regulatory definitions of who are your stakeholders.

Think outside the box to identify other groups and interests that would benefit from your success.

A good example of this is a real estate project that I am advising.

The project is situated in an area of large, sprawling estates in a valley on a large island.

It aims to create a ‘pocket neighbourhood’ of smaller homes, more community and less environmental footprint.

Regulatory requirements for permitting mandate consultation and engagement with local landowners/stakeholders. There is likely to be significant resistance from this group as they would see a change from large, sprawling estates as potentially reducing the value of their properties.

There are many other groups in the valley that are advocating for and supportive of the development concept that is being promoted. For the most part their regulatory involvement would be minimal unless it was stimulated.

The developer is embarking on an education campaign to help these other stakeholders better understand the specific type of development he is promoting and to help them to better educate the broader public on the Island and in the valley.

The developer is helping these people and groups to meet their interests and objectives of softer environmental footprints and at the same time he is engaging with a group of stakeholders that have an interest in the success of his permitting and can be motivated to provide support at public meetings and consultations. Hopefully avoiding the situation where the only engaged group is local residents who are likely to oppose the development.

Don’t forget internal stakeholders

You can use many of the above best practices for internal stakeholder engagement, including especially focusing on their interest and value.

What is critical is that you and your company find ways to embed best practices like these AND embed a process where you are constantly revisiting and driving this throughout the organization, permeating the organization from top to bottom and across all departments and divisions.

If stakeholder engagement is not seen as everyone’s responsibility at some level you will never achieve the success or value that is possible. Ghettoize it in some corner or department and you will seldom get it right and often get it wrong, at a cost to you and to your company.

Successfully engage your internal stakeholders and you will have easier and more consistent success with your external stakeholders.

*USAID, DfID, DFATD, GIZ are official development agencies of USA, UK, Canada and Germany.  They are examples only. There are too many others to list them all.

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 eight places remaining.

Tuesday, September 16, 2014

Quick expert Q&A on engaging difficult stakeholders in emerging markets

As regular readers (all three of you) will know, I am focusing writing and interviews at the moment around the area of stakeholder engagement.

That's alongside business and human rights and deforestation.

Of course it's no co-incidence that I also have products to sell in these areas too, but a chap has to eat, and these are absorbing areas, politically, management-wise and intellectually.

So here's a brief, and I hope useful Q&A with a good friend of mine, who also knows his stuff on the first two of these areas.

He's the only person I have met who has a Phd in the role of business in post conflict reconstruction, yes really. Here's the details on his book, well worth a read.
Cracking twist at the end too

A brief intro:

Dr Peter Davis is a specialist advisor on politics, ethics, conflict and, in his own words, "other issues that don't fit into spreadsheets". He does a lot of work with both governments and business on governance in emerging markets, and always has fascinating insights as a result

TW: Give us a bit of background on you, your experience, business and otherwise, related to stakeholder engagement

I work with international institutions such as IFC on the interface between donors and companies. I’ve also worked with companies - Anglo, Grumman, Rexam, Diageo - to help them better understand their stakeholders.

TW: What's your view on how big business approaches to vulnerable stakeholders are maturing, or otherwise?

PD: Pretty varied, but on the whole considerably improved. I think also that the scare stories one hears that implies that companies are indifferent to stakeholders are not right. Companies may not listen correctly, might mis-hear or mis-understand what they are told, but generally at least know they need to listen. The companies really good at it remain fairly few, but the general standard is improving.

TW:  Clearly, 'high impact' sectors such as oil, gas and mining tend to lead in this space, as they have fixed and valuable assets at risk. Which other sectors would you say companies can learn from when it comes to engaging difficult stakeholders?

PD: Yes I think generally that is the case, I think also some of the FMCG companies have been pretty good too - Unilever, Heineken and P&G for example. What is interesting now is that more companies are inclined, not just to ape what the extractive have done, but to work out from first principles what they need to be doing.

TW: There are lots of process tools out there, guidelines too. Would you advocate using them all to the hilt, or  good engagement is it more of a mix of art and science?

PD: Generic guidelines are often not that helpful as they tend to ‘bounce off’ established international systems. Even if managers may be broadly sympathetic with the intent of a set of guidelines it’s often a struggle to make them fit with existing systems. I think therefore that companies which take the ‘essence’ of external standards and apply them to internal systems and practice work best. Definitely more of an art than a science - really the key thing is hiring people sympathetic to these sorts of issues.

TW: Governance of emerging market nations and their institutions is clearly key in keeping communities, workers and key stakeholders happy. What can MNCs do help support good governance and institutions?

PD: Be very careful! It’s not for companies to interfere in the domestic governance of the countries where they work. If they have concerns or think they can help, the best bet companies have is to work with their home government’s development agency, or with institutions wuch as IFC or World Bank. These ‘development partners’ are still not always great at working with companies, but are getting much better.

TW: Recently, you've worked in places such as Nigeria, Bangladesh and Vietnam. Are these countries, and others, becoming more aggressive with MNCs, thereby making the case for successful ongoing stakeholder engagement more compelling?

PD: ‘Aggressive’ is not the right word - probably ‘robust’ is better. There’s a greater awareness of what MNCs can do - for good and ill - and a greater desire to harness that for wider development benefit. For example, you’re seeing a considerable increase in requirements for ‘local content’ in sourcing. This is a good thing if it fosters wider development. The challenge however is to make sure that such arrangements do not lead either to protectionism, or to contracts going to ‘favoured’ firms!

Peter will be joining us to teach on our "How to effectively engage stakeholders in frontier markets" two-day executive training workshop, certified by the CSR Training Institute, on 30-31 October, 2014, in London. There are currently less than ten places left on this limited numbers course. Attendees are mostly senior executives from mining, oil &gas and FMCG companies, Contact if you are interested in taking part. 

Monday, September 15, 2014

Free management briefing on what business can do to tackle deforestation

Here's our new management briefing on what companies can do to minimise their deforestation footprints, work with NGOs and manage legal and reputational risk.

It features contributions from Greenpeace, TFT, Marks & Spencer, Neste Oil, Canopy, Robertsbridge and many others. There's some really useful insight in there into how to deal with risk, manage transparency, engage stakeholders and work with NGOs.

How business can tackle deforestation - Innovation Forum management briefing September 2014 from Tobias Webb

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, Waitrose, 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 

Business and human rights      (Lots of coverage of License to Operate issues)
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, ABB, Ericsson, Novartis, PUMA, the Economist, Oxfam and many others. 

"Human rights violations have increased 70% since 2008 globally" - really?

According to this piece in Guardian Sustainable Business, consultants Maplecroft claim that:

"Human rights violations have increased 70% since 2008 globally"

I must say I find this quite hard to believe. In fact, I find it very hard to believe.

OK, let's be honest, I don't believe it at all.

I rang Maplecroft to ask how they worked this out.

Well, quite

They told me to look at the press release, which is here.

It looks like this number has been arrived at because Maplecroft (presumably with a black box methodology) have decided to classify more countries as extreme risk.

A spokesperson for them has confirmed this, writing that: "This relates to an increase in countries – from 20 to 34 – classified extreme risk in the Human Rights Risk Atlas from 2008 to 2014."

Here's the quote from their press release in more detail:

"Since 2008, there has been an unprecedented 70% rise in human rights violations globally, according to the seventh annual Human Rights Risk Atlas (HRRA) produced by global analytics company, Maplecroft, which reveals the number of countries classified as ‘extreme risk’ between 2008 and 2014 has increased from 20 to 34."

A spokesperson for Maplecroft also sent me this:

"...the number of countries rated as 'extreme risk' has increased by 70% over the last six years. This year, the global average risk score of 197 countries has crossed the threshold from a 'medium risk' (5.07/10) to a 'high risk' (4.98/10) classification for the first time. In the HRRA 2014, growth in the number of 'high risk' countries has abated, but the number of countries rated 'extreme risk' continues to increase...

"...Political instability has triggered the most severe human rights deteriorations. The protection of human rights has deteriorated the most in countries where political instability has undermined human security. Egypt (16), Libya (19), Mali (22), Tunisia (69) and Guinea-Bissau (74) – all of which have recently experienced forced regime change – are among the countries with the steepest decline in score over the last seven years."

Of course, there is a bit of a problem here. That's the fact that companies selling their expertise in these areas have a direct vested interest in saying that things are getting worse, that risks are increasing. No-one gives consultants fat contracts for saying things are going the other way. Not in this field anyhow.

Despite all the awful global turmoil out there, not least with Ukraine, Syria, Iraq, and parts of Africa, things are, I think, generally getting better if you look at the numbers of wars, famines, conflicts, disease deaths, etc and the trends since the tumultuous days of the 1970's, when Britain almost became a failed state.

So my instinct says this number of 70% isn't a fair way of stating things.

Since when did any of the countries listed above have a good human rights record? Not in my lifetime. Are we supposed to believe that life in Libya is worse for human rights now than under Gaddafi? Hmm, that's a subjective call. How do you measure freedom over security concerns? for example.

I asked a couple of leading experts in the field,what they thought. One had this to say:

"Whilst it is true that there is greater economic inequality these days and yes more conflict now in the Middle East region, I can see no basis for the blanket 70% assertion, given factors such as:
  • Arguably there has been some steady improvement in economic and social rights in most parts of the world.
  • Given their populations - it would be China and India that would determine such a global statistic and there is no evidence for such deterioration for the majority of the population in either state.
  • If the statistic related specifically to "human rights defenders" then it would be more credible but even then there it will be skewed to civil and political rights specifically."
My own reading and research backs up the above.

Another learned contact of mine had this to say:

"70% is a big scary number and invites all sorts of questions about definitions, statistical methodology, etc. Inevitably, these sort of things risk undermining the point if they turn out to be cobbled together from different data sets. My view is that numbers are only ever really reliable or useful if they are related to a specific set of issues, in a specific sector or supply chain, use specific indicators, and over a period of time that makes comparisons meaningful."

Another expert I contacted about all this responded thus:

"“Frankly, the 70% increase figure does sound rather incredible. Certainly, there are some nasty regimes around, and the political situation, for example in the Middle East means that significant areas of the world still have very poor records in human rights. However, to suggest that things have got so much worse simply does not stack up. Also, even if the number does stack up (which it doesn’t) how much use is it? What is making things worse? What can we do to put things right? These numbers are not helpful - they are catchy headlines, but not really much good in telling us what to do.”

Readers should take this kind of number with a dump truck full of salt.

We'll debate these figures, and a whole lot more real life practice at our event on November 10th in London on how companies can embed business and human rights into their operations, and influence other important actors. Do come and join us if you can. 

London-based readers, an invitation to a discussion on social licence and corporate legitimacy (29th September)

“SOCIAL LICENCE” - a way of keeping your organisation legitimate?

An invitation to a panel discussion (and book signing)

On 29 September 2014, Amnesty International UK will host an evening discussion for the Institute for Human Rights and Business and Palgrave Macmillan publishers. 

The occasion is the publication of John Morrison’s new book on the “Social Licence” and the chance for some critical discussion of the concept and its applications. 

In particular, is it a better way of understanding corporate responsibility than traditional CSR approaches, and does it align with human rights approaches, including the social contract that binds our society? 

As well as Gulf of Mexico, Myanmar (Burma) and Nigeria, the author will also draw examples from the current gas fracking and internet privacy debates in the UK. A lively panel will include Peter Frankental from Amnesty International and Ramanie Kunanayagam from British Gas Group, as well as the author.

Arrivals at 6.30pm at Amnesty International UK’s auditorium (near Old Street tube in London - logistical information will be supplied). 

The event is free but spaces are limited so please book at giving your name and organisational affiliation. A drink will be available as will copies of the book for those wishing to get a copy. The event will end no later than 8.30pm.

What people have said about the book so far:

“Provocative and challenging The Social License makes a compelling case for why companies must look to increase their positive social impact as an integral part of their core business strategies.”    - Paul Polman, CEO, Unilever plc

 "John Morrison has led significant initiatives on business and human rights over recent years.  Now his book takes some of that collective experience and orders it conceptually in a way that is accessible and makes an important point about the social licence of corporations to operate." - Mary Robinson, former President of Ireland, United Nations Special Envoy on Climate Change

“In this provocative book, John Morrison takes us beyond CSR into the realm of ‘the social license’ and how it is earned, and then all the way to the social contract on which any sustainable societal order ultimately must rest. The intellectual journey is well worth the while.” - John G. Ruggie, Professor of Human Rights and International Affairs, Harvard University; former United Nations Special Representative for Business and Human Rights

 "The Social License is fundamentally about accountability to people and not just powerful interests. John Morrison's book reminds all organizations - governments, business and civil society - to focus on the legitimacy of their own actions.”  - Kumi Naidoo, Executive Director, Greenpeace International

 "John Morrison has written a thought provoking, path-finding book that should be essential reading for any corporate executive seeking to achieve a growing, sustainable business.  It sets out a textured, multi-layered, challenging framework that is foundational to maintaining a social license in a social media world of increasing and rising expectations.”  -  Ed Potter, Director, Global Workplace Rights, The Coca-Cola Company

"My three words to describe John Morrison's book: Timely ­– because what used to be acceptable behaviour by business a few decades ago is no longer the case today and because social license is much more than CSR; Targeted – because it reaches out not only to business but also governments and civil society; Trustworthy – because with his vast experience and knowledge John Morrison, convinces us both theoretically and practically. A book to be read, discussed, and used!”  - Margot Wallstrom, former Vice President of the European Commission; former UN Special Representative on Sexual Violence in Conflict  [ISBN] 9781137370716

Thursday, September 11, 2014

Unilever, WRI and transparency in supply chains: Five questions for Dhaval Buch, chief procurement officer, Unilever

The world lost 2.3 million square kilometers (230 million hectares) of tree cover from 2000 to 2012, equivalent to 50 soccer fields every minute of every day for 12 years.

So now Unilever and the World Resources Institute (WRI) have announced a new partnership that will increase transparency in agricultural commodity supply chains with the aim to end tropical deforestation.

Dhaval Buch
According to the company:

"The partnership will enable Unilever and its suppliers to use the Global Forest Watch Commodities platform to monitor forest cover change around commodity supply areas and processing facilities such as palm oil mills.”

So I sent Dhaval Buch, chief procurement officer at Unilever, five questions about the announcement. Here are his responses below.

He'll be talking about all this and taking questions about it on October 28th in London at our conference "How business can tackle deforestation - Collaborate effectively with NGOs, understand policy and enforcement trends".

Toby Webb: So what changes will this partnership mean for how suppliers work?

Dhaval Buch: Unilever significantly reduced (by half) complexity in its supply base, and will source most of its volumes from a few key suppliers who will deliver from known and certified sources.

In addition, we will work with suppliers to develop individual time-bound plans that support our commitment.

Our first step is to get traceability back to all the palm oil mills we source from. This means that suppliers need to make transparent to us the exact mills the palm oil is coming from, so we can then make Unilever’s sourcing origin transparent.

The WRI partnership then lets us determine the risk associated with our supply chains, so that we can take action and mitigate any links to deforestation.

The Global Forest Watch platform will be linked to the traceability tool Unilever is using and provide transparency of our sourcing overlaid with the deforestation hotspots.

Combining the two innovative tools will provide us real-time insights into the state of forests within Unilever’s supply chain and provides a monitoring and risk assessment tool to determine high risk sourcing origins connected with deforestation and development on peat, so we can work with our suppliers to either exclude high risk mills and/or adopt sustainable best practices.

These insights are crucial to make supply chains transparent and ensure no link to deforestation.

Palm Oil will be the first focus area, but once successful, we can expand this to include other commodities such as soy and paper and pulp.

Toby Webb:  How will you 'encourage' suppliers to make use of the technology if their take up is slow?

Dhaval Buch: Unilever has been engaging with our suppliers since the start of this year, to help them understand how we need to work together to transform the industry.

This has been through face to face workshops and meetings, to really help them understand the issues and now the majority of our supplies are fully on board with traceability.

We have also made the reduction in our supplier base no secret, so suppliers know that we are only working with companies that are committed to this.

Toby Webb: What do you hope to achieve here and how is this linked with your sustainable living plan?

Dhaval Buch: The fact that we know the source allows us to identify both certified and non certified mills and to work with suppliers to move any non compliant mills and their supplying plantations to RSPO compliance and beyond.

This will enable more transparency of our supply chain. The intention here is to not only benefit Unilever but to drive the acceleration of sustainable production sheds and eventually drive market transformation.

This ultimately contributes to our Unilever Sustainable Living Plan commitment to source all palm oil from traceable and certified sources by 2020. This partnership will help to accelerate our progress and make transparent our sourcing origins.

Toby Webb: Will you share your learnings with other companies, for example, with Nestle, if asked?

Dhaval Buch: Yes indeed and in fact we have also much to learn from our peers.

In addition, Unilever is working with industry leaders and NGO’s to move towards a collaborative solution to halt deforestation, protect peat land, and to drive positive economic and social impact for people and local communities.

An industry alignment on the definition of traceability is critical. Unilever supports the IDH palm oil traceability working group, which consists of members from key palm oil industry companies, that is helping to spearhead consistency of implementation and understanding of traceability in the palm oil industry as a whole.

Later this year we will also publically share progress on our commitment.

Toby Webb: We see mixed news on tropical forests. Deforestation rates down in Brazil, up in Indonesia. How optimistic are you about companies such as Unilever having a meaningful impact on preventing deforestation to 2020?

Dhaval Buch: Advocacy is an important part of our work to reduce deforestation.

Unilever has many partnerships with NGOs such as WWF, IDH, Solidaridad, WRI and others, we were also a founder of RSPO and a Co-Chair of the Consumer Goods Forum, which led to the development of the Tropical Forest Alliance, plus we work with smallholder farmers towards sustainable production of palm oil with NGO, industry and government support.

We are optimistic that through these industry collaborations, companies like Unilever can have a meaningful impact.


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, Waitrose, 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 

Business and human rights      (Lots of coverage of License to Operate issues)
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, ABB, Ericsson, Novartis, PUMA, the Economist, Oxfam and many others. 

Wednesday, September 10, 2014

Event announcement: Cotton risk and sustainability conference, March 2015 in London

On March 16-17 2015 in London Innovation Forum and CottonConnect are bringing together the key players in cotton industry to talk about how sustainability can help the industry better manage risk and secure supply.

Sustainable cotton matters, more than you might think 
Cotton is in many more products than you might think. Yet the market is volatile, with lots of political and sourcing risk.

Here and here you can find some background on the issues. They matter, a lot.

Meanwhile demand is rising and a lack of sustainability in grower nations, in farming communities and production methods is placing strain on the industry, and prices world-wide.

The conference on March 16-17 in London will address all this in detail. If you are interested in attending, speaking, or sponsoring just email me on

The event is officially titled:

Sustainable and ethical cotton sourcing: How to get it right, and make it pay for your business

A two-day business event organised by Innovation Forum

16-17 March 2015, Central London location

Sponsored by and in Partnership with CottonConnect.

Here's the draft agenda and the invitation letter. Please do get in touch if interested.

Invitation letter 

Monday, September 08, 2014

Corporate social license and why it matters. Five questions for John Morrison

In this Q&A, I asked the Institute for Human Rights and Business’s John Morrison, author of The Social License, how far human rights issues are now being tackled properly by international business

John has this new book out on social license and what it means for business.

John Morrison, biz/human rights pioneer
TW: What is social licence for business? Is it just good corporate responsibility by another name, or is it more specific?

JM: In some ways it is good corporate responsibility by another name – but it roots corporate responsibility within the perspective of society and not just the business itself.

For me, the social licence is only meaningful if it relates directly to the social contract that binds society and communities in the first place, and one which gives government its legitimacy (or not).

In other words, social licence (or the sort of corporate responsibility I am advocating) cannot be self-proclaimed or self-rewarded by the company itself.

It needs to be earned and conferred on to a company’s activities by others.

It is pretty clear when a company’s operations do not enjoy social licence – there is opposition, protest and even sometimes blocking of daily activity. When activities do have good social licence things run in harmony – so the foundations of good CR can be subtle.

TW: Extractive company managers talk about social licence like it’s on an MBA course – i.e. all the time. How far has it really penetrated in senior management?

JM: Social licence seems to have penetrated the board rooms of mining companies in particular – and to some extent other parts of the extractive sector.

What’s interesting is how often I am beginning to hear senior management in food and beverage companies use the term. Grassroots NGOs are starting to do so too.

Maybe it is because I have been writing the book that my ears have tuned in to the social licence term – hearing it in recent meetings from Nairobi to Tokyo – but I think it is more than my own wishful thinking. It seems to be in the zeitgeist.

Fundamentally, I think it is an attractive term for managers as it describes a positive and not a negative – the conditions a business should work towards and not just what it needs to avoid.

I am convinced that we need this for the human rights agenda, in the same way as anti-corruption campaigners have developed concepts of integrity, and anti-discrimination also requires a focus on diversity to really drive organisational change.

Unhappy stakeholders cost companies $$$
TW: You write that social licence for business is about “finding ways of building capacity within the existing social contract without replacing it”. Isn’t that a) a bit academic to mean anything in business and b) outside how most companies view responsible business? (In that most companies don’t focus much on building capacity.)

JM: You say “academic” as if it were a dirty word! I am not an academic but it doesn’t mean that us policy people and practitioners should not be interested in ideas.

It has been a fundamental flaw of corporate responsibility, in my view at least, that it has not been locked into some more objective view of society.

It is why much CR lacks legitimacy in the view of many communities and NGOs.

Linking CR into a more objective way of thinking about how society works – such as the social contract – is the best way of achieving such legitimacy in the eyes of others.

So yes, I am not offering up anything easy here, nor do I give all the practical steps, but I am asking for a paradigm-shift. There are many business managers who feel that CR needs some kind of reboot – I hope mine is helpful.

TW: Turning to John Ruggie and the UN framework on business and human rights, we’ve had it agreed since 2012, so what’s your sense on how it’s being used by companies in a serious, embedded way?

JM: Those who read the book will note that as the chapters unfold so more and more Ruggie framework stuff comes in.

That is because when we really start thinking about what it means for a business (or other organisation) to operate in social contract terms, we are talking about rights-based and rights-aware approaches.

I am constantly surprised by how much the UN framework has become common currency in just three years.

I was recently in Japan, meeting many companies, NGOs and the government and it is clear that the embedding process is starting there.

More globally, there have been some impressive steps – such as companies issuing human rights white papers on methodology, participating in sector-wide impact assessments that are then fully disclosed, or participating in multi-stakeholder attempts to create objective human rights performance benchmarks.

In many ways the serious work is only just starting, but it is starting.

TW: What will it take to bring big companies in laggard countries such as India, China and Japan to the table on business and human rights? What’s your view on the state of play with these countries and their companies today?

JM: What do you mean by laggard countries? In broader human rights terms – say, for example, an issue such as the death penalty – then all three countries still execute people although India is less prone to do so. But then of course so does the US, whilst Russia or Brazil do not at all, although both still struggle with extra-judicial killings.

So the question of who is a laggard depends on the specific human rights question you are asking.

On business and human rights, I would no longer call China or Japan laggards as there are serious efforts now afoot in Beijing and Tokyo that can properly be called business and human rights, and not just broader corporate responsibility.

What is fascinating is that a key driver for businesses in these countries is social licence issues they are facing in third countries – such as Burma/Myanmar or across Africa and Latin America.

In many ways, social licence is an increasingly material concept for these companies – perhaps more than is understood by many European companies, for example.

John Morrison is executive director of the Institute for Human Rights and Business [] and author of the new book The Social License: How to Keep Your Organization Legitimate []. He will be participating in the Innovation Forum Business and Human Rights conference on 10 November in London.


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, Waitrose, 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 

Business and human rights      (Lots of coverage of License to Operate issues)
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, ABB, Ericsson, Novartis, PUMA, the Economist, Oxfam and many others. 

Sunday, September 07, 2014

Five key points about stakeholder advisory panels, groups and boards

I recently finished a piece of research for a large company on external stakeholder advisory groups.

The final report, all 8000 words of it, is of course confidential to the client.

But what I can share with you are some of the (alas by no means all) key findings from the research, which are below.

We interviewed 15 or so leading experts and did quite a bit of secondary research alongside the primary.

Here's a few high level nuggets from the work below.

You may not be very surprised by most of them but sometimes it's just nice to have what you thought, backed up by proper research.

Stakeholder advisory groups and panels, some key points:

1. They are used by leading companies

  • The companies interviewed and studied are all recognised leaders in the field
  • These firms, and the experts we interviewed who study them, have spent some years refining their processes
  • Their usage seems to be rising as companies look to better manage risk and consider social and environmental related opportunities 

2. The business case is clear

  • Much deeper insights into structural and reputational risk and future trends by: Establishing meaningful dialogue to consider where the world is heading (for example, upcoming short, medium and long term changes in the operating environment)
  • A broader audience for critical decision making 
  • An ongoing demonstration that the company understands the importance of accountability to stakeholders 
  • A method of spotting new business opportunities, now and in the future 

3. There is not one size fits all solution

  • Some companies have general boards
  • Some focus only on reporting feedback
  • Others combine both: Receiving feedback on general strategy and risk issues AND on specifics such as reporting or more technical issues, such as water or nutrition

4. Process and selection is important

  • Companies and NGOs think differently: Understanding different perspectives is crucial
  • The process must suit the participants but be owned by the company
  • Timescales and turnover matter: Stakeholder engagement is a long term strategy, but stakeholders should not be too comfortable as the quality of their inputs may suffer 

5. But the benefits outweigh the risks

  • The business case is clear despite some risks to business through stakeholder engagement
  • Companies who want to be leaders are so far those who engage in this process
  • But it is clear any company with a global footprint and even national sourcing and operations risk can benefit for feedback
  • Regulatory/disclosure drivers are increasing 

My company, Innovation Forum, alongside our events on deforestation, business and human rights and stakeholder engagement, also provides research, stakeholder engagement, and training services. Contact me if you are interested in knowing more about these on tobias.webb AT

Advertisement: (Note to readers, I will be facilitating/teaching on this course below) 

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

30-31 October, 2014, London

An unhappy stakeholder with a cell phone and internet connection can turn a problem into a crisis that can threaten the very survival of your company 

Twenty executives will spend two intense days learning from and with global experts on how to effectively engage stakeholders in emerging markets. 

This course is a practical blend of lectures, case studies, discussions, dilemma-solving group work and individual reflection. 

The two-day programme combines real-world tools and strategies with strategic insights and down-to-earth approaches. These will equip executives to engage and work better with stakeholders especially in lean or frontier markets.
  • Find out how the world's leading extractive 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
  • Our 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, and many others