Statement on the Release of the International Olympic Committee’s New Framework on Fairness, Inclusion and Non-Discrimination

New York, NY.

Since 2018, Shift has been advising the International Olympic Committee (IOC) on a range of topics related to the organization’s responsibility to respect human rights. Today, the IOC released its new Framework on Fairness, Inclusion and Non-Discrimination on the Basis of Gender Identity and Sex Variations, which is the result of an extensive research, consultation and design process carried out by the IOC over the last three years involving inputs from many stakeholders, as described here. Importantly, this included consultation with transgender and intersex athletes whose experiences and insights were essential in informing the IOC’s approach. Shift has provided expert advice to the IOC throughout each step of this process.

The Framework provides guidance to sports bodies within the Olympic Movement on how to draft and implement eligibility criteria for men’s and women’s categories in competitive sport. Historically, the creation of gender categories has played an essential role in helping to break down the structural barriers that excluded and unfairly discriminated against women and prevented their equal participation in sport. At the same time, the design and implementation of eligibility criteria for these categories has led in some instances to significant human rights harms to individual women, in particular transgender women and women with sex variations.

The Framework seeks to safeguard the rights of all athletes, in particular, the rights of transgender athletes and women athletes with sex variations who have historically faced hostile sporting environments, including discrimination and abuse, and in some cases have experienced irreversible impacts on their health, privacy, safety and livelihoods.

Shift welcomes the progress made by the IOC through this Framework in:

  • Recognizing that eligibility criteria for sex-segregated sports may lead to harm to some athletes and calling on sports bodies to conduct due diligence to identify and prevent negative impacts on all athletes’ health and well-being.
  • Acknowledging and respecting the concept of gender autonomy in line with evolving international human rights standards, which recognizes that individuals should be able to define their own gender identity.
  • Seeking to prevent discriminatory assumptions (for example, based on an individual’s physical appearance) in the development and implementation of eligibility criteria, which have disproportionately affected transgender women and women of color from the Global South.
  • Confirming the rejection of invasive physical examinations and other scientifically unfounded “sex-testing” methods as ways to determine eligibility, which have in the past led to grave forms of abuse.
  • Aiming to prevent eligibility criteria from infringing on the right to bodily autonomy, including ensuring that such criteria do not directly or indirectly pressure athletes to undergo medically unnecessary treatment or procedures of any kind.
  • Strengthening the role of informed consent as a prerequisite for the collection and use of personally identifiable information, in order to protect the privacy and safety of all athletes.
  • Ensuring that eligibility criteria set by sports governing bodies are informed by the perspectives and lived experiences of affected stakeholders, as the development of the Framework was.

The success of this new Framework in ensuring respect for the rights of transgender and intersex athletes will depend heavily on how it is implemented by sports governing bodies. The IOC will need to play an active and ongoing role in this regard. Moreover, adoption of a forward-looking Framework does not, on its own, address harms that have occurred in the past, which sports bodies will also need to consider. 

While this Framework marks an important change in the Olympic Movement’s approach to the issue of eligibility, it continues to be founded on a binary notion of gender; further work will be needed on the inclusion of athletes who are non-binary or have gender non-conforming identities.

Finally, the adoption of eligibility criteria that take greater account of human rights standards is only one element in meeting the broader responsibility of sports bodies to prevent and address all forms of abuse and harassment towards athletes and others participating in sport, particularly towards those who may be most vulnerable or marginalized.

“The rules set by sports bodies, and particularly by the IOC as the global steward of the Olympic Movement, can have an immense impact on the lives of athletes and also on the perceptions of everyone who follows competitive sport. When a sports body adopts rules that are grounded in inclusion and the prevention of harm, it is not only recognizing its human rights responsibilities; it is also sending a powerful social message about respecting the dignity of all athletes.”

Rachel Davis Shift Vice President and Co-Founder

“This is an unprecedented step in the world of sports. The IOC’s new Framework helps break the myth that fairness and inclusion are mutually exclusive; that eligibility has to be a zero-sum game between including trans athletes and protecting the female category. Rather, it is sending a strong message to the world of sports that eligibility rules cannot rely on placing unfair burdens on transgender and intersex athletes, which often lead to grave impacts on their health, careers and livelihoods.”

Daniel Berezowsky Shift Advisor who led Shift’s support to the IOC’s consultation and design process

For media inquiries regarding this statement, please contact communications [at] shiftproject [dot] org.

Photo courtesy of the IOC.

In Memory of John G. Ruggie

New York, NY

IN MEMORY OF JOHN G. RUGGIE (1944-2021)

John Ruggie passed away on 16 September with his beloved wife and son at his side. A light has gone out in the world. More than a light. John was a beaming beacon for so many of us who had the privilege to know him, to work with him, to learn from him, to laugh with him, to love him. He achieved academic heights that his colleagues at Harvard and around the world will attest to in the days and weeks to come. Yet his ideas and insights never rested on paper, for his gift was to turn them into the tools of tangible change and his passion was to make the world a more equal and just place. He did both.

Nowhere is John’s gift for crafting words that create change more evident than in the UN Guiding Principles on Business and Human Rights, which he authored in his six years as the UN Secretary-General’s Special Representative. We had the good luck and constant delight of working with John through that time as part of a wider team which he fondly dubbed ‘Team Ruggie’ and which became an enduring extended family. As we then set up Shift to be part of the movement needed to translate the Guiding Principles into practice, John was at our side – not just formally as our Chair, but as our champion, support and guide, and above all as our friend. 

John’s legacy cannot be captured in a few words. He leaves behind not just the seeds of the change he wanted to see in the business world, but the blossoming on all continents of new policies and practices, laws and regulations, fans and followers. John’s spirit will live on in all we do at Shift, alongside so many others in the business and human rights movement, to further nurture and fuel the change he set in train. Indeed, our name comes from a phrase John would gleefully pronounce, a sparkle in his eye, whenever he saw a new sign of the impact of the Guiding Principles  – ’Shift happens!’  So it does – when grounded not just in the intellectual depth and drive but in the humanity, humility, integrity and compassion that were so central to how John moved through the world.  We miss him deeply.

Our thoughts are with Mary and Andreas Ruggie and their wider family at this time. A memorial service will be held in Cambridge, Massachusetts with details to be announced in the coming days.  

Caroline and Rachel

And the Shift Team

Towards ‘Sustainability Due Diligence’: Synergies between Environmental and Human Rights Due Diligence

Today in 2021, there should be little need for a discussion on whether human rights and the environment are intrinsically connected. The question is rather, how can businesses best address risks to people and planet in a holistic way and how can the policy environment enable this transition?

The question is rather, how can businesses best address risks to people and planet in a holistic way and how can the policy environment enable this transition?

Companies operating today can no longer treat their climate, other environmental and human rights risks in silos: there are too many interconnections between these areas for this approach to work. Rather, what we need is for companies to be empowered, equipped and incentivized to adopt a comprehensive sustainability approach to risks to people and to the planet. The upcoming EU legislation under the Sustainable Corporate Governance Initiative offers a golden opportunity to design a due diligence structure to do just that. And importantly, there are already examples of harmonized due diligence that can serve as a foundation on which new legislation can build.

Here we offer some key reflections that we believe can help inform a harmonized due diligence obligation.

We have applicable international frameworks already

The UN Guiding Principles on Business and Human Rights (‘UNGPs’) provide a clear and authoritative reference point for what is expected of companies when it comes to human rights due diligence. The OECD Guidelines for Multinational Enterprises (‘OECD Guidelines’) echo the UNGPs’ expectations on human rights and extend the due diligence framework set out in the UNGPs to environmental impacts and risks (as well as other relevant risks). An overarching 'sustainability due diligence' Group 33 Created with Sketch. (This term draws on a research-based concept of sustainable value creation within planetary boundaries, as described further in the SMART project’s reform proposals for EU company law and corporate governance.) framework should clearly build on these soft law due diligence standards and methodologies, and create further connections and synergies between them.

An overarching ‘sustainability due diligence’ framework should clearly build on these soft law due diligence standards and methodologies, and create further connections and synergies between them.

Companies navigate the relationship between international expectations and national requirements in both areas

In the area of human rights, companies are expected (under the UNGPs and OECD Guidelines) to look at internationally recognized human rights standards set out in core UN and ILO instruments which inform their due diligence approach and define the baseline against which they assess their impacts on people.

National laws also regulate human rights: they may compel company actions in a range of areas, such as discrimination, labor arrangements and health and safety. However, if these standards fall below, or conflict, with international standards, companies are still expected  to meet, or seek to meet, international standards. Notably, the UNGPs expand these expectations to the company’s business relationships, whereas applicable law typically focuses on the company’s own operations. 

We find a similar picture when looking at the environmental side. Companies are expected under the OECD Guidelines to take due account of the need to protect the environment – referencing in turn principles and objectives contained in international agreements. Similarly, companies can rely on national environmental laws, but this is often insufficient on its own to meet international environmental expectations of business – and, again, may not extend beyond the company’s operations.

Of particular note, a recent court case in the Netherlands held an energy company (Royal Dutch Shell) to international climate standards (the 2015 Paris Agreement) rather than to national standards. The court also relied on international expectations contained in the UNGPs, rather than applicable national law, to conclude that the company had a responsibility for scope 3 emissions, beyond its own operations.

In both areas then, companies are increasingly accustomed to navigating international and national standards.

In both areas then, companies are increasingly accustomed to navigating international and national standards. On the environmental side however, and in contrast to the human rights side, there is no comprehensive body of international standards on the protection of the environment. This can be addressed by EU regulators defining the adverse environmental  impacts that companies should be assessing as part of their due diligence and specifying the key principles of environmental law that companies should have regard to in carrying out their due diligence (such as the precautionary principle).

Growing convergence around the scope of responsibility

Companies are expected to take a full value chain approach to human rights due diligence under the UNGPs and the OECD Guidelines. (This full value chain approach is coupled with a specified method for prioritising impacts within the value chain, as further described below). The scope of due diligence extends to impacts that may be directly linked to their operations, products or services through their business relationships. For environmental due diligence, a similar full value chain approach is expected under the OECD Guidelines. Companies should incorporate both direct and indirect environmental impacts connected to their operations into their due diligence. There is also a growing consensus that individual methodologies used for specific environmental areas (such as water, greenhouse gas emissions and biodiversity) should cover impacts beyond a company’s direct operations and tier one suppliers. Taking a full value chain approach to sustainability due diligence is becoming the expectation.

Not only looking at risks to business – but also risks to people and planet

The risks companies will identify through their due diligence will look different – depending on whether they are viewed from the perspective of people, the planet, or the business.

In the human rights space, companies are expected to look at risks to people from the perspective of those who are or may be affected, using international human rights standards. Similarly, in the environmental space, companies are expected to look at risks to the environment from the planet’s perspective – meaning that they need to consider environmental impacts whether or not they also pose risks to the business. This is where new legislation can provide greater clarity for companies, in defining what would constitute an adverse environmental impact.

Beyond this, by bringing these areas together under one ‘sustainability due diligence’ umbrella, we have the opportunity of more clearly understanding the inter-connections between these impacts.

Beyond this, by bringing these areas together under one ‘sustainability due diligence’ umbrella, we have the opportunity of more clearly understanding the inter-connections between these impacts. For example: impacts on the environment and the climate that, over a longer timeframe, will manifest as impacts on human rights; or impacts on human rights that can be mitigated but in a way that harms the environment in the immediate term. This being said, we also need to ensure that bringing these areas together under one umbrella does not result in the dilution of environmental risks which do not have immediate human rights impacts.

Potential to take a longer term view of risk

One point to consider when looking at environmental and human rights risks together is that companies commonly use different timeframes and geographic locations for assessing them.

Looking at risks to people and planet today will yield a different result than looking at impacts that could occur in a year, in ten years or in a generation’s time.

Looking at risks to people and planet today will yield a different result than looking at impacts that could occur in a year, in ten years or in a generation’s time. The timeframe for assessment of human rights impacts tends to be more immediate, with a focus on human rights impacts that could occur in the short- or medium-term. Due diligence can also include longer-term impacts (e.g. from the future decommissioning of a project or transitions to automation), however, capturing long-term human rights impacts can be a challenge because of limitations in predicting future activities and behaviours. When it comes to environmental impacts, the time horizon for assessing impacts tends to be longer and commonly relies on scientific projection data.

Furthermore, human rights due diligence will typically capture impacts on people close to the company’s site, or those impacted by its suppliers’ operations. Some environmental impacts also have localized impacts on a specific habitat or water source, while others have both cumulative impacts and ripple effects on the environment elsewhere, and/or are global in nature. Where environmental impacts are local, this could more visibly result in local human rights impacts (e.g. impacts on a community’s access to water or sanitation). In contrast, where the environmental impacts manifest elsewhere or are global, this could connect to human rights impacts elsewhere (e.g. communities’ livelihoods impacted by greenhouse gas emissions) – but it is more challenging to identify the specific groups of people affected.

In practice, we are seeing that companies are finding it easier to bring environmental and human rights considerations together under one broader umbrella when both sets of impacts are more localized in nature. New legislation can reflect the differing timelines and locations of where risks may manifest, and help ensure that due diligence enables capturing change over time, both to the risk and to the expected mitigation/action.

Whose views determine which risks to prioritize?

The human rights risks that companies are expected to prioritize for attention are those that pose the greatest potential harm to people. Since human rights risks should be understood from the perspective of those who are or may be affected, the most effective way to conduct due diligence is to conduct stakeholder engagement – with those who could be impacted or their legitimate representatives, or with credible proxies where direct engagement is not possible, as well as with human rights experts. In the environmental space, we are seeing a growing number of companies including elements of human rights-based stakeholder engagement as part of their environmental work – and this is also expected for environmental impacts that result in impacts on people (as evidenced for instance by the European Parliament’s 2020 proposal for an EU legal framework to halt and reverse deforestation).

The opportunity here is to support companies in conducting stakeholder engagement that can inform both their environmental and human rights due diligence, while recognizing where the objectives of, and audiences for, engagement may differ.

The opportunity here is to support companies in conducting stakeholder engagement that can inform both their environmental and human rights due diligence, while recognizing where the objectives of, and audiences for, engagement may differ. Further, engaging on both human rights and environmental risks together can help companies see the interlinkages, develop more nuanced prioritization criteria and methodologies, and inform and explain their prioritization decisions.

What actions is a company expected to take?

The actions that a company is expected to take in response to a human rights impact differs depending on how the company is, or could be, involved with an impact. There are different expectations for action depending on whether a company has caused the impact, contributed to the impact, or whether the impact is directly linked to the company’s operations, products or services by a business relationship. Actions range from ceasing the impact, preventing the impact, building and using leverage (alone or with others) to prevent and/or mitigate the impact (or seeking to do so), and remedying the impact.

Cause and contribution as modes of involvement are also well-known in environmental due diligence. In particular, we often see companies talk about cumulative environmental impacts: how their actions alongside those of other parties can combine to create environmental impacts. This is akin to contribution in parallel, an accepted mode of involvement in the human rights space. The actions expected for instances of cause or contribution are similar to the human rights space: cease, prevent, and/or mitigate the impacts and remedy the contribution.

Although not necessarily framed as such, a number of environmental methodologies expect companies to build and exercise leverage. But there may be some areas of distinction to consider when it comes to remedy. A company’s responsibility to remedy a human rights impact seeks to restore the person to the situation they would have been in, had that impact not occurred, or as close to it as possible. Companies may also be expected to remediate their environmental impacts – with the appropriate remedy being defined by regulation or the applicable international framework. At the same time, when it comes to environmental harm, there may be broader repercussions where environmental degradation has had ripple effects and led to other forms of environmental harm. Where environmental harm results in impacts on people, the remedy expectations of companies are clear. When they have not (or have not yet), the remedy expectations are less clear.

Where environmental harm results in impacts on people, the remedy expectations of companies are clear. When they have not (or have not yet), the remedy expectations are less clear.

A new corporate duty could reinforce the importance of companies using leverage to tackle risks, and articulate what can be reasonably expected of companies in terms of action depending on their mode of involvement with an impact, including what remedy can look like (and to whom it can be delivered) in the environmental space.

Conclusion: Embedding due diligence in governance

As the connections between the ‘E’ and the ‘HR’ of ‘HREDD’ grow, so too will the need for cross-functional structures and discussions that enable companies to take a holistic approach to due diligence. This extends to when companies are setting overarching targets, as well as how they set up their internal accountability and responsibility structures. Synergies should start to happen between functions, budget lines, programming and expertise on these areas within companies. And this in turn will start to inform business models that are viewed as sustainable for the long term – as well as those that are not. New EU regulation can play a pivotal role here in supporting companies to take a holistic approach to sustainability risks, which builds on and amplifies existing methodologies and standards, in a way that is embedded in appropriate governance structures. 

Introducing Shift’s Financial Institutions Practitioners Circle

New York, NY

Shift, the leading center of expertise on the UN Guiding Principles on Business and Human Rights, is delighted to announce the launch of our Financial Institutions Practitioners Circle, a space carefully designed for a small number of leading practitioners from banks and export credit agencies (ECAs) to discuss common human rights challenges and co-create cutting-edge solutions that put people first.

The first generation of the FIs Circle will gather virtually for the first time in early March and will include a limited number of practitioners from institutions in the financial sector who have demonstrated a serious commitment to advancing their understanding and implementation of the UN Guiding Principles.

Discussion and learning in the FIs circle will be facilitated by experts from Shift, who will also contribute creative solutions that we have been fine-tuning in our one-on-one engagements with financial institutions. Together, through group workshops and discussions, practitioners will foster leading practice by sharing and co-creating approaches to putting the responsibility to respect human rights into practice in the FIs context.

Shift is committed to disseminating the learnings from this group for the benefit of a wider audience of FIs practitioners and other stakeholders.

LEARN MORE>

Participant selection

Shift is currently evaluating candidates for the first generation of the FIs Circle. Admissibility is determined through an in-depth discussion, based on where the organization is on their human rights journey and, regardless of its level of maturity, its commitment to sharing its experiences and improving performance.

To learn more about the FIs Circle, or to inquire about joining, please email communications [at] shiftproject [dot] org.

Opening Remarks by John Ruggie at the Conference “Human Rights and Decent Work in Global Supply Chains”

The recording of these remarks is available here.

The UN Guiding Principles on Business & Human Rights are approaching the tenth year since their unanimous endorsement by the Human Rights Council. It is encouraging that their uptake continues apace, not only by businesses but beyond. For example, human rights factors make up the bulk of the S elements in ESG investing, with investors clamoring for more robust metrics. Also, global sports bodies, including the International Olympic Committee and FIFA, have made human rights a mandatory part of their host city agreements.

The UNGPs were conceived to generate an ongoing interactive dynamic of a smart mix of measures – voluntary and mandatory, national and international – that would strengthen the business and human rights regime over time.

But I confess that governments, with exceptions, have been a weak link in this dynamic. So, I am pleased to see action picking up on two significant fronts in the EU context.

The first is human rights due diligence. This is the foundational construct for businesses to identify, prevent, mitigate and account for their adverse human rights impacts – throughout their operations and business relationships.

The experience of the past decade has demonstrated that many multinationals understand the importance and utility of human rights due diligence. But the record also shows shortcomings and weaknesses in implementation.

In response, Germany, like several other governments, is giving serious consideration to making human rights due diligence mandatory, as foreshadowed in its 2016 National Action Plan. Similarly, mandatory human rights and environmental due diligence is on the legislative agenda of the European Commission.

…many details still need to be worked out. Perhaps none is more important than the question of liability. It may be helpful for me to recall that the UNGPs foresaw the possibility of liability…

I appreciate that many details still need to be worked out. Perhaps none is more important than the question of liability. It may be helpful for me to recall that the UNGPs foresaw the possibility of liability, and how it might play out in practice. The Commentary to UNGP 17 state that:

Conducting appropriate human rights due diligence should help business enterprises address the risk of legal claims against them by showing that they took every reasonable step to avoid involvement with an alleged human rights abuse.

Of course, case-specific facts would also be considered in any such assessment.

A second area that shows progress is the strengthening of non-financial disclosure requirements, including on human rights. Indeed, there is a rush into this space by private international standard setting bodies, large asset managers, alliances of consulting firms and the like, all wanting a piece of the ESG standards market.

The EU, as the world’s largest trading bloc, has a golden opportunity here to provide authoritative standards, which inevitably would have international spillover effects.

Here the EU, as the world’s largest trading bloc, has a golden opportunity to provide authoritative standards, which inevitably would have international spillover effects.

Perhaps there is still time for the Germany Presidency in collaboration with the Commission to establish a measure of policy coherence across the related EU initiatives, so as not to contribute to overwhelming businesses with potentially overlapping or, worse, inconsistent requirements.

Progress on these two fronts would contribute significantly to the overarching concern of this conference with promoting decent work in supply chains.

Indeed, I believe it would go even further and help inform the grand debate taking place on both sides of the Atlantic on the social purpose of the corporation, on the need for it to better serve a broad array of stakeholders in addition to shareholders.

So in conclusion, thanks again, and I wish you every success on the journey ahead.


John G. Ruggie, the Berthold Beitz Research Professor in Human Rights and International Affairs at Harvard’s Kennedy School of Government, has served as UN Assistant Secretary-General for Strategic Planning, and as the Secretary-General’s Special Representative for Business & Human Rights. He chairs the Board of Shift.

The Global Pandemic Reveals what it will take for Stakeholder Capitalism to Succeed: a Focus on the Most Vulnerable People

A version of this article originally appeared in Ethical Corporation Magazine

This article is available in PDF format. To download it click here.

The human toll of COVID-19 is growing daily, with over 3 million confirmed cases globally and 26 million unemployment claims in the US alone – well before April is out. The burden is falling disproportionately on the people least able to bear it: those in low-paying jobs, exposed to health risks on the frontline of the pandemic response; losing those jobs altogether in western workplaces and overseas supply chains; or cooped up in worker dormitories far from home and without protection. Against this backdrop, the reactions of business to the pandemic are under as much scrutiny as those of governments. Even mainstream business media are keeping a log of the ‘sinners and saints.’

 One clear rule of thumb is emerging as to who is getting their response to the COVID-19 crisis (at least mostly) right: those companies that focus first on the most vulnerable.

As the accounting continues, one clear rule of thumb is emerging as to who is getting their response to the crisis (at least mostly) right: those companies that focus first on the most vulnerable. The language of ‘vulnerability’ peppers the news and commentary as never before. Yet it is far more than just a label for the people who stand to lose the most as this crisis unfolds. It is the essential lens we must apply if a new stakeholder capitalism is to succeed: the difference between how our economies have worked in the past and how we need them to work going forward.

Before the pandemic hit, there was already a growing movement away from Milton Friedman’s idea that business should focus on maximizing shareholder returns. The gross and growing inequalities in our societies are the now inescapable result of externalizing risks and costs of business onto vulnerable ecosystems, workers and communities.

And so, a return to a supposedly kinder ‘stakeholder’ capitalism had begun to grow in favor, at least in most developed economies. It called for business to respond to the interests of ‘stakeholders’ beyond shareholders alone. In just the last nine months we had seen nearly 200 CEOs espouse the idea in last year’s Business Roundtable statement; the head of the world’s largest asset manager, BlackRock, urge company leaders to take it seriously; and the Davos Manifesto from January’s World Economic Forum identify it as essential to, “shared and sustained value creation.”

Yet this new narrative of ‘stakeholder capitalism’ always risked being far less radical than it appeared – potentially even the ‘virtuous side hustle’ some have feared from the get-go. Why? At least in part because the categories of stakeholder beneficiaries – employees, suppliers, customers and communities – were defined so generically that they necessitated little real change from the status quo. 

The new narrative of ‘stakeholder capitalism’ always risked being far less radical than it appeared – potentially even the ‘virtuous side hustle’ some have feared from the get-go.

Take ‘employees.’ The term includes those generously compensated in safe jobs as well as those whose pay, security and benefits are vulnerable to cost-cutting initiatives. It also excludes altogether people whose roles are externalized by evolving business models and strategies into categories of ‘contractor’ or the nominally ‘self-employed.’ The category of ‘suppliers’ blurs the line between large, strategic partners and small or more remote businesses whose cash flow is fragile and whose workers’ wages are the first to give under pressure. 

Similarly, ‘customers’ are by definition those who can afford to access a company’s products or services; yet the term does not call out those who are stretched to do so, and excludes, of course, those who simply can’t. Meanwhile, ‘communities’ can continue to be viewed as the beneficiaries of corporate philanthropy rather than groups whose health, livelihoods and opportunities may be directly affected by company actions and decisions.

With all this flexibility in interpretation, the new ‘stakeholder capitalism’ built a broad church. It certainly embraces companies committed to understanding how business practices may harm people across their value chain, and to reducing those impacts. However, it also readily accommodates companies hoping for little more than marginal adjustments to usual practice, or continuing to bank on business models that embed risks to people at their core. Little surprise, then, that some CEOs seemed taken aback to find that their new commitments raised expectations of real and substantive changes to address the inequalities of today.

Yet this pandemic, with all its awful consequences, is fast removing the ambiguity about what matters. At least in the Global North, it is showing the lens of vulnerability to be essential for businesses to determine how they should act, and a guide for how popular opinion will react. This focus on vulnerable people, once seen by many as idealistic, is becoming a primary expectation from investorspublic figurescivil society and business commentators alike.

A focus on vulnerable people, once seen by many as idealistic, is becoming a primary expectation from investors, public figures, civil society and business commentators alike.

Companies are making decisions about their employees, being explicitly called on to take pay cuts at the top to preserve jobs at the bottom – and increasingly doing so. Some businesses quickly committed to keep paying the hourly workers providing canteen, cleaning or other services in their facilities; a growing number have increased sick leave and benefits to workers in gig economy roles, whose finances and health are often most at risk.

We see the same expectation to focus on vulnerability in supply chains. More companies are now committing to ease cash flow for businesses in their value chains whose viability and workforces are at risk by paying smaller suppliers first and fastest or extending loans or deferred payment terms to customers in need.

Meanwhile, companies are identifying and prioritizing those customers who are most exposed to harm, with grocery stores offering earlier hours to the elderly, and some key service providers prioritizing the vulnerable over those who can better cope. And we see businesses thinking afresh about impacts on communities. Some that can afford to make new hires are drawing from local, hard-hit populations; others are collaborating with governments to address systemic risks to those most in need

Of course, the trend is far from universal. Many companies have genuinely little latitude in how they can respond, lacking both resilience and options. And far too many that are not so constrained have nevertheless defaulted to protecting their shareholders and leaders at the expense of the vulnerable.

But the tally is now being kept of which companies are rising to the occasion and which are failing the test. This is not a blip that will be forgotten, it is an acceleration and proliferation of an idea whose time had already come.

The same Milton Friedman who spawned the ‘shareholder primacy’ theory that stakeholder capitalism now proposes to replace, ironically also wrote, “Only a crisis, actual or perceived, produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe is our basic function: to develop alternatives to existing policies, to keep them alive and politically available until the politically impossible becomes politically inevitable.”

It can no longer be viewed as impossible to make it the ‘new normal’ once we emerge from the pandemic. We just need to make it inevitable.

The idea that businesses must look beyond generic categories of ‘stakeholder’ to hone in on those individuals in workplaces, supply chains, transportation networks and communities who are most vulnerable is alive and available. It is embodied in the UN Guiding Principles on Business and Human Rights: a ready blueprint for governments and businesses to reorient capitalism to protect and respect those most at risk: a true ‘stakeholder capitalism.’

Companies that have led the way in putting the UN Guiding Principles into practice have shown a more natural reflex to focus on the most vulnerable in their response to the crisis, getting it right while others have fumbled.  Yet it is the crisis itself that is now taking the lens of vulnerability to scale. It can no longer be viewed as impossible to make it the ‘new normal’ once we emerge from the pandemic. We just need to make it inevitable.

Realizing Trade Union Rights: Diagnosing Barriers and Moving to Action

Between 2010-2014, the Peruvian fruit growing company Composol was in ceaseless conflict with its workers and their union representatives. It had strong turnover of staff, low motivation among those remaining, and, according to its own accounts, very high litigation cost due to constant cases before the labor courts. The company’s labor troubles were even featured as a prominent case example in complaints filed by Peruvian and international unions with the US Department of Labor and the European Commission related to beneficial trade agreements.

It was not until 2014 that the company started to realize how much of an impact this was having on its business, and decided more meaningful action was necessary. Together with local and internationally focused unions and business associations, the company embarked on a path towards fully embracing social dialogue and trade union rights. Through a process of trust-building, negation training and capacity building on labor rights -among others- the company and unions were able to fundamentally transform their relationship. In addition to more satisfied workers and meeting company commitments, results also included lowered costs in recruitment, transportation and legal fees, among many others.In the words of Javier Morales, Camposol’s Managing Director of the Fruit and Vegetable Division: “We have been able to be profitable while focusing on people. (…) Now workers come to Camposol because they choose to, not because they have to as in the past. Competitors are raising the salaries to attract workers more but it is not the only thing that workers seek. What they seek is also a healthy emotional relationship with their employer. We demonstrate that we can align the interests of workers and shareholders.” Perhaps most central to turning things around was the realization that in order to ensure respect for trade union rights companies need to take proactive steps to realize them in practice. This, in a nutshell, is the key message of our newest publication ‘Respecting Trade Union Rights in Global Value Chains’, developed with Mondiaal FNV, to help companies approach trade union rights proactively.

What are trade union rights?

What are trade union rights?

Freedom of association and the rights to collective bargaining (collectively referred to in the publication as “trade union rights”) are recognized by the International Labour Organisation (ILO) as one of a set of four core labor standards that all governments and companies should adhere to. While they are fundamental rights in and of themselves, trade union rights are also recognized as “enabling rights,” meaning that respecting these rights can often lead to the fulfillment of a number of other labor rights, including adequate wages, reasonable working hours, workplace safety, and a work environment free from discrimination and harassment.

Action on trade union rights is hard…

Those who have worked on trade union rights know that this is all easier said than done.

While many companies list respect for trade union rights in their policy commitments, pledge to adhere to industry standards, and participate in multi-stakeholder initiatives, many still struggle to identify and implement meaningful action to address the risks to trade union rights in their global value chains. 

In our work with Mondiaal FNV we recognized three categories of barriers that often create challenges for global companies to ensure respect for trade union rights in their global operations and value chains:

  1. External factors: Respecting trade union rights in many contexts can be extremely challenging: local laws may prohibit them, union-relations may be seen to be political, and local business partners may not see the value in changing what already works.
  2. Business models and practices: some companies have risks embedded in how they are structured or in how they operate. For instance, extensive reliance on contract labor, or sourcing strategies that rely upon production in markets with lower labor costs and often weaker labor protections.
  3. Internal company governance and due diligence pitfalls: a number of challenges arise from weaknesses in corporate governance and due diligence. For example, a lack of understanding of trade union rights, limited visibility into conditions in the supply chain, or strong commitments on paper not being translated into action on the ground.

Our publication provides a detailed diagnostic tool with simple questions to help companies identify the specific barriers they might face in a particular context or relationship. 


… but there are ideas and experiences to inspire action

We have seen that those companies who identify their salient human rights issues (one of the practical steps the publication suggests) now often include freedom of association and right to collective bargaining among them. I believe it reflects a broader understanding of how interconnected human rights impacts are and that one of the most sustainable ways to improve human rights for workers—in a way that also brings benefits to business—is to give workers a voice and take proactive steps to reduce barriers and reinforce constructive relationships that enable them to organize, make their voice heard and take a stake in the long-term interest of the company.

But identifying trade union rights as important is only the first step. We need to move to action. Our work with companies on these issues has surfaced a range of practical approaches companies are taking to address these barriers in new and meaningful ways.  Whether it is the Freedom of Association protocol that was developed by apparel and footwear companies with local suppliers and stakeholders in Indonesia to address the locally challenging context for trade union rights or the way that companies have collaborated in Mexico to jointly apply leverage to improve union relations.

Different types of approaches are almost certainly going to be necessary to address the range of situations a company might face and the different types of barriers that may be present.  The resource offers a continuum of different types of leverage that can be applied internally and externally, with practical case examples to illustrate these approaches in practice:  for example, working jointly with peer companies and international and local trade unions to advance collective bargaining to improve living wages in the garment sector, or exerting collective leverage with peers vis-à-vis a government to improve laws and regulations that protect trade union rights (both of which have concrete case examples in the publication).

Our aim is to inspire companies with ideas for concrete action, to move from recognizing risks to trade union rights to taking meaningful action to address those risks, by drawing from a menu of potential options for action. We hope it can provide companies with a roadmap for developing thoughtful, meaningful and targeted actions necessary to tackle these issues more effectively in practice.