The Case for Living Wages: How Paying Living Wages Improves Business Performance and Tackles Poverty

This report, authored by Shift, Business Fights Poverty and the Cambridge Institute for Sustainability Leadership, helps show how living wages not only offer a way out of in-work poverty and help tackle inequality, but also support business resilience, stability and growth.

As a route out of working poverty and a prerequisite to tackling growing income inequalities, living wages have growing support among business, civil society, and governments. This new collaboration of academics and experts has explored the business benefits of living wages alongside the high cost of inaction and found that paying a living wage can deliver:

  • More motivated and productive workforce, with lower staff turnover
  • Improved revenues and profits, for example, PayPal attributes much of its recent growth to the decision to pay ‘decent wages’ to all employees
  • Increased value chain resilience and performance
  • Reputational benefits
  • Improved investor prospects
  • Readiness for future regulatory reporting

Making ‘Stakeholder Capitalism’ Work: Contributions from Business & Human Rights

For the first time in four decades, leading business associations, corporations, and the corporate law and governance community are seriously debating the social purpose of the corporation. The idea of stakeholder governance – moving beyond shareholder primacy toward some form of ‘stakeholder capitalism’ – is in play. But the how question unveils significant differences of opinion as well as difficulties. Some advocates place their bet on enlightened voluntary cooperation between corporations, large institutional investors, and other stakeholders. Yet considering the financial incentives, the current system affords corporate directors and executives, especially in the Anglo-American system, driven by equity-based compensation, voluntarism by itself is unlikely to move the needle far enough. Others provide long and detailed lists of a dozen or more bodies of law and regulations that should be reformed to ensure that accountability to wider stakeholders is established. But that inevitably poses multiple political impediments and therefore takes time. For their part, critics of ‘stakeholderism’ posit what amounts to an impossibility theorem, contending that corporate leaders simply are unable to identify ex ante who the relevant stakeholders are, or to devise a formula regarding how to weigh and balance their conflicting interests – let alone how their concerns would be represented at board levels. 

In contrast, we focus on a pathway that reflects the ambition of stakeholder capitalism, but which current reform proposals have largely overlooked. We draw on practical experience in the field of business and human rights, where leading companies are increasingly embedding human rights due diligence processes into their strategic decision-making. As human rights due diligence is made mandatory for companies, which it is in a growing number of jurisdictions – with debate centered in but not limited to Europe – risks to stakeholders become a significant corporate governance issue. It makes it necessary that their concerns are addressed and requires demonstration that indeed they are. Such changes by themselves may not constitute a full-blown system of multi-fiduciary obligations, but they mark substantial strides on the path toward it, and they are doing it in the relatively near-term. 



This is an interactive version of The Human Rights Opportunity report, prepared by Shift to offer a format that you can read and use online. Through this report, we seek to provide inspiration for how companies can harness innovation, leadership, influence and partnerships to tackle negative impacts in ways that maximize positive outcomes for people, in line with the SDGs. Contexts vary, and none of these examples would claim to be perfect. But they are all a substantial step in the right direction.

Use the numbers above to navigate between the introduction and each of the four chapters. To reference a specific case study of the fifteen used to build this report, use the case studies menu located to the right of each chapter page. You can also download the PDF by using the button on the header of this section and share this resource on social media. In addition, you’ll see some of our resources and tools referenced throughout, to help you guide your reading.

To get started, watch this short video:

Shift’s “The Human Rights Opportunity” offers 15 practical examples of how companies and multi-stakeholder initiatives are aiming to address human rights impacts and, at the same time, are showing great promise in delivering significant contributions to the Sustainable Development Goals (SDGs).

How to use this resource:

We have selected four issue areas to focus on, in order to provide an illustrative set of potential business impacts on people across sectors, geographies, and steps in the supply chain:

Living Wages

Living Wages

The provision of living wages for workers in global value chains could contribute to supporting entire families and communities in surfacing from conditions of poverty, fueling the economic and social development called for by both public and private actors in their endorsement of the SDGs.

Forced Labor

Forced Labor

Combatting forced labor situations, including those that involve children, is a necessary component in building sustainable economies that work for all.

Gender Equality

Gender Equality

Women and girls comprise half of the planet’s population; their empowerment is essential in expanding economic growth and promoting social development in a sustainable way.

Land Rights

Land Rights

Land is life. Regardless of geographical location and socioeconomic status, each person relies on land, at least to some degree, for the provision of basic human needs such as clean water to drink, nutritious food to eat, and safe housing to shelter in.

You can click on any of the above, or use the chapter menu at the top of this page to select the issue area that you want to explore. Each issue area page also has a side menu with a list of corresponding case studies. You can also download this resource in PDF format to review offline.

Sustainable development is about the planet. And it is about people.

With their ever-expanding power and influence, companies have a critical role to play in achieving the Sustainable Development Goals (SDGs). The way they work, source, hire, produce, sell and deliver can have a major impact on our natural resources; and it can also affect all of us as people, and our ability to advance our lives with dignity.

Every day, more companies are acknowledging that responsibility. But, words are easy. Delivering is much harder. With 17 Sustainable Development Goals and 169 related targets, companies may feel overwhelmed or not know where to start.

The risk is that they look for an easy way out by repackaging what they already do in glossy “SDG wrapping.” Or, even worse, that they focus resources and efforts on certain Global Goals based on ease and marketability, rather than their true impact.

The focus has to change.

In order to adopt a coherent and effective approach that maximizes their contributions to what the world needs, companies need to place human rights at the center of their SDG strategies and activities.

What does that mean in practice? It means that businesses need to think about the people part of sustainable development just like they do the planet part.

First, companies should work out where the salient (most severe) risks to people and planet are within their operations and value chains and map those priorities to the most relevant SDG goals and targets. Then, they need to find ways to tackle those risks in ways that maximize positive outcomes and therefore support the Global Goals.

Second, companies should see if and how they could provide beneficial products, services or investments that can bring positive impacts to people and planet and thereby contribute to the SDGs. However, they must make sure to develop and deliver those new innovations with respect for people and planet along the way.

By bringing these two steps together, a company can develop a strategy for the SDGs that enables it to prioritize its efforts and be true to its business, what it does, where it works, and how it impacts people in the most practical sense; a strategy that is principled, coherent and capable of bringing our world closer to a sustainable future.

Shift is grateful to the Governments of Sweden and Norway for their generous financial support, which made this work possible, and to all those who participated in the extensive interview and review processes that fed into this compendium.

Shift also thanks the Danish Institute for Human Rights and the UN Global Compact for additional inputs into this project.

Respetar los Derechos Sindicales en las Cadenas Globales de Valor

Seguido, las empresas tienen dificultades para identificar e implementar acciones significativas que atiendan los riesgos a los derechos sindicales en sus cadenas globales de valor. Ello por distintos factores:

  • Externos, como los que surgen del contexto en el que operan y en el que se extienden sus cadenas de valor. Ello incluye las leyes y regulaciones, el estado de derecho, las prácticas sociales que enmarcan las percepciones culturales sobre los sindicatos y la capacidad local de sindicatos y empresas socias para llevar a cabo acciones en la práctica.
  • Modelos de negocio, que pueden resultar en riesgos exacerbados a los derechos sindicales si no son propiamente administrados. Ello incluye el tener insumos de mercados de alto riesgo (o bajo costo), el uso intensivo de trabajadores contratistas o temporales, y las propias práctiacas de adquisición de las empresas.
  • La cultura corporativa y las prácticas empresariales, lo que puede incluir suposiciones y actitudes hacia los sindicatos por parte de las oficinas centrales, así como debilidades en el proceso de debida diligencia.

En la parte 2.2 de esta publicación se incluye también una herramienta de diagnóstico, que puede servir para que las empresas entiendan cómo y dónde pueden existir los riesgos para los derechos sindicales. 

Asimismo, se delinean algunos ejemplos de pasos que pueden tomar las empresas dependiendo de los riesgos que existen, y ocho casos práticos de casos reales en los que otras empresas han logrado sobrepasar estos retos. 

Business and Human Rights Impacts: Identifying and Prioritizing Human Rights Risks

This report reflects learning from a workshop with 12 Dutch companies together with expert stakeholders, hosted by the Social and Economic Rights Council of the Netherlands, about how companies can identify and prioritize human rights risks and test their findings through stakeholder engagement. The annex features examples of real company risks and prioritization exercises within a set of analysis tools. This workshop supported the process leading to the development of sectoral covenants in the Netherlands to address human rights risks in global supply chains. | Learn more about our work supporting the broader covenant process

This report summarizes the key lessons learned from a workshop facilitated by Shift on identifying and prioritizing human rights risks. The workshop was convened by the Dutch Social and Economic Council of the Netherlands (SER) on January 15-16, 2014, in The Hague. The workshop involved over 20 representatives from 12 participating companies, as well as 12 expert stakeholders, including from trade unions, NGOs and other non-profit organizations.

The objectives of the workshop were to:

  1. Build practical experience in applying key tools and approaches for identifying, appropriately prioritizing and taking action on human rights risks;
  2. Generate broader learning about implementing these approaches to share with a wider audience in order to contribute to evolving understandings of how to put business respect for human rights into practice.

The workshop focused on the first two steps of human rights due diligence as they are elaborated in the Guiding Principles, and incorporated in the OECD Guidelines for Multinational Enterprises – assessing impacts and integrating and taking action on identified impacts. It drew on existing methodologies developed by Shift through its work on putting the Guiding Principles into practice.

In advance of the workshop, participating companies were asked to prepare an initial identification of human rights risks related to their operations. In addition, three pilot companies applied the relevant methodologies in more depth, with support from Shift. During the workshop, participants engaged in table discussions (with three companies and 2-3 expert stakeholders at each table) about the methodologies for identifying, appropriately prioritizing, and taking action on human rights risks. The companies shared their own efforts and received feedback from the other participants.

The role of the expert stakeholders was two-fold: to provide sector-specific knowledge about human rights risks in a particular commodity and/or country, and to help stimulate critical thinking by company participants. Each session ended with a plenary discussion about key learning, as well as common pitfalls and challenges experienced by companies, which are summarized in the body of this report.

From Audit to Innovation: Advancing Human Rights in Global Supply Chains


Over the last several decades, global companies have increasingly recognized their roles and responsibilities in addressing social impacts and labor conditions within their supply chains – a responsibility reaffirmed by the Guiding Principles.

As awareness of this responsibility has increased, so too has a recognition of the limitations of the conventional approach to tackling these issues – social compliance auditing. Despite the hundreds of thousands of social compliance audits conducted each year to ensure minimum workplace conditions in companies’ supply chains, there is little evidence that they alone have led to sustained improvements in many social performance issues, such as working hours, overtime, wage levels and freedom of association.

There are many reasons why the traditional audit paradigm has struggled to produce sustainable improvements in these and other key areas of social performance, with each of the following playing their respective roles:

  • A lack of disclosure by suppliers of accurate information on their performance during some audit processes, calling into question the value and validity of information gathered;
  • A lack of capacity among suppliers to address issues that have been identified for remediation in a sustainable way;
  • A lack of perceived incentives among suppliers, both external and internal, to address social performance issues, and a corresponding lack of commitment to invest in sustainable improvements;
  • Systemic challenges that are beyond the control of individual suppliers, including social context, regulatory environments, and industry-wide issues;
  • The purchasing practices of global brands and retailers, and a need to recognize and improve upon the role they themselves may play in contributing to impacts on workers.

These issues are no secret to global brands and retailers, many of whom have grown increasingly frustrated with the limitations of the traditional audit paradigm. In the absence of clear alternatives, many companies continue to base their due diligence and remediation solely on an audit approach that they privately acknowledge is not producing sustainable results.

However, a number of leading brands and retailers are attempting to change the conversation. They are openly acknowledging what everyone knows – that audits alone have not produced sustainable change.

Instead they are asking – themselves, their industries, their suppliers, and other stakeholders – what to do about it. They have a growing body of individual and collective experience with alternative and supplementary approaches to addressing social performance issues in their supply chains – approaches that seek to recast their relationships with suppliers, from “policemen” to “partners.”

This research, undertaken by Shift in collaboration with the Global Social Compliance Programme (GSCP), is based on conversations with leading companies, industry experts, and – for the four case studies presented – suppliers and other stakeholders. The first part of the report begins by identifying 10 leading trends and elements that form this new generation of social compliance programs for supply chains:

  1. The shift from pass/fail compliance to comprehensive continuous improvement programs;
  2. Replacing audits with collaborative assessment and root cause analysis;
  3. The role of grievance mechanisms in improving social performance;
  4. The integration of capacity-building approaches for suppliers;
  5. Different forms of partnerships between global brand companies and civil society organizations;
  6. Providing commercial incentives to suppliers for improvements in social performance, such as price, volume, duration, and supplier preference;
  7. Developing metrics to help suppliers identify the business case for better social performance;
  8. Efforts by brands to use their leverage to address systemic issues;
  9. Industry-wide collaboration to tackle systemic issues;
  10. Aligning internal purchasing practices with social commitments made by global brands and retailers.

In the second part of the report, we highlight four company case experiences in more depth, whose approaches combine many of the elements identified above to address complex social performance challenges in supply chains:

  1. Timberland’s approach to collaborative assessment, which has transformed its relationship with suppliers globally (p. 22);
  2. Chiquita’s holistic approach to its passion fruit supply chain in Costa Rica, which combines commercial incentives and innovations, capacity-building, civil society partnerships, and adherence to social and environmental standards and practices (p. 34);
  3. Tesco’s approach to promoting sustainable improvements in addressing issues within its agricultural supply chain in South Africa, premised on the support of local initiatives driven by local actors (p. 42);
  4. HP’s multilateral approaches to a range of systemic challenges in different parts of its IT supply chain, through which it collaborates with industry, civil society, and government actors to address industry-wide issues (p. 49).

This report does not attempt to imply that any company has the best model for, nor a perfect record in, addressing supply chain human rights challenges. Nor did the research seek to rigorously test the models discussed. Rather, it explores innovative models used by leading companies, who themselves report their effectiveness, as a basis for further analysis and evaluation.

European Commission Sector Guides on Implementing the Guiding Principles

The link above leads to all three guidance documents in English. There are also a few unofficial translations of these guides: Japanese: ICT sector | French: oil and gas sector

While implementing the Guiding Principles is very specific to each company, there are common challenges and strategies by industry or sector. These guidance documents feature “a to z” guidance for companies in three sectors: information and communication technology (ICT), oil and gas, and employment and recruitment. The guides were developed through an extensive process of multistakeholder consultation.

Learn more about the collaboration that supported the development of these resources.

Unternehmensverantwortung für Menschenrechte: Ableitung von Handlungsempfehlungen auf der Basis von Experteninterviews und internationalen Fallstudien

Also see: our news update on support to the German government on its National Action Plan on implementing the Guiding Principles.

This study was a precursor to the consultation process on a German National Action Plan on Business and Human Rights and is available in German only. The summary is excerpted from the resource.


Das Bundesministerium für Arbeit und Soziales (BMAS) hat die vorliegende Studie zur Umsetzung der VN-Leitprinzipien im Rahmen der „Nationalen Nachhaltigkeitsstrategie zur gesellschaftlichen Verantwortung von Unternehmen (Corporate Social Responsibility – CSR) – Aktionsplan CSR – der Bundesregierung“ vergeben (im Folgenden kurz: CSRAktionsplan).

Der CSR-Aktionsplan sieht u. a. ausdrücklich die „Stärkung von CSR in internationalen und entwicklungspolitischen Zusammenhängen“ (Bundesregierung 2010: 23) vor. Vorliegende Studie ist im Kontext dieser Bemühungen zu verorten und soll laut Ausschreibungstext dazu beitragen, „Voraussetzungen und mögliche Wege für die Umsetzung der von Prof. Ruggie beschriebenen ‚Guiding Principles‘, insbesondere zum Kapitel ‚The corporate responsibility to respect human rights‘ […, zu] erörtern. Dabei soll es im Kern um die Frage gehen, ob und inwieweit staatliche Institutionen Unternehmen hierbei unterstützen können.“

Vor diesem Hintergrund stellt die Studie als Basis für die weitere Untersuchung und Analyse zum einen die Anforderungen der Leitprinzipien der Vereinten Nationen (VN) an Unternehmen in Bezug auf deren Verantwortung, die Menschenrechte zu respektieren, dar. Zum anderen berücksichtigt sie die korrelierenden Anforderungen an Staaten, die sich aus der Verpflichtung ergeben, die Menschenrechte zu schützen. Entsprechend der Konzeption des Gesamtprojektes basiert die Studie des Weiteren auf 22 leitfadengestützten, vertraulichen Experteninterviews mit Vertretern/-innen von Unternehmen (kleiner und mittelständischer sowie großer Unternehmen), Unternehmensverbänden und -netzwerken, der Zivilgesellschaft, von Ministerien, der Wissenschaft und aus dem gewerkschaftlichen Bereich sowie auf fünf Fallstudien zu Beispielen guter Praxis aus Dänemark, Norwegen, Großbritannien, den Niederlanden und den Vereinigten Staaten von Amerika (USA).