By Aron Cramer, President and CEO
Ever since Al Gore was focused on NAFTA, not climate change, debate has raged over whether globalization has helped or hurt workers, communities, and national economies. One question in particular has been front and center: what about the treatment of workers in the thousands of factories that make products for western consumers? But too often, the particular needs of women driving the global economy have been overlooked.
In recognition of International Women’s Day this week, perhaps it’s time to think about the fate of the millions of women—often aged between 16 and 25—who now make the clothes, toys and electronics we buy, and who toil in the fields that produce the tomatoes and flowers that land on our kitchen tables.
For many of these women, export-related jobs are the best opportunity to gain a foothold in the formal economy. This is why so many women have taken the risk of migrating to big cities: to step out of poverty and away from traditional rural lives that offer little chance for autonomy.
And while the need to prevent mistreatment is clear, we shouldn’t overlook how we can make this step into formal employment an opportunity for economic and social advancement. BSR’s HERproject marks this 100th International Women's Day with a new report that shows how to make this happen.
When women migrate from rural to urban environments, often very far from their families and support systems, and enter the formal workforce for the first time, they are often without access to health care. They work very long hours in countries whose public health care systems are patchy at best. They also have very distinct reproductive health care needs which, if unmet, can be a matter of life and death.
HERproject (“HER” stands for “health enables returns”) has delivered information and access to health care for 50,000 women from India to China to Egypt. Two key assumptions underlie the project. First, the presence of such large numbers of women in export factories around the world actually presents a unique opportunity—often largely ignored—for social and economic development. Second, there is a strong business case for enabling women to access quality health care. The combination of these two ideas means that global trade can be something other than a race to the bottom.
According to a 2010 McKinsey study, among companies who invest in programs targeting women in developing countries, at least one-third have measured improved profits, and an additional 38 percent are expecting returns. Speaking about this phenomenon at last year’s World Economic Forum in Davos, Nike President and CEO Mark Parker called young women in the developing world “a powerful force for social and economic change.” Companies like Nordstrom, Ambercrombie & Fitch and others have been central to the success of this project.
The project works closely with NGOs, but also aims to build women-to-women networks to offer support, guidance and access. In Mexico’s Pegatron Juárez factory, 47 peer educators were trained, enabling them to provide information to a workforce of over 1000. One of these peer educators noted the “personal satisfaction of learning new things and being able to use that knowledge to help others.”
But the real power of this effort is the multiplication effect that empowered women can have. The project aims to raise health awareness, change health behavior, and provide access. But equally important, it is designed to promote cultural change and grow leaders.
The words of the women who have contributed, benefitted, and grown thanks to this project are the best testament to the vision and the achievements of HERproject. Samira el-Sayed, a peer educator in Egypt, said “I value this knowledge and believe that it is my duty to pass on the messages I am blessed with. ...I started talking to other women on the bus, at the mosque, at the market, and anywhere else I could reach.”
Women are writing much of the history of the globalized economy. Let’s take a moment today to recommit to efforts like HERproject that help women shape and capture the human potential—and dignity—of our integrated world.
Wednesday, March 10, 2010
Monday, March 8, 2010
International Women’s Day: Supporting Women’s Empowerment Across the Globe
By Cody Sisco, Manager, Advisory Services
As we take a moment to reflect today on International Women’s Day, it is important to recognize the progress we’ve made on ensuring respect for human rights for women around the world. We must also take this opportunity to consider the challenges that still need to be overcome in order to ensure women’s full participation in the global economy.
Last week in an address to the global community, United Nations Secretary-General Ban Ki-moon said that while we should celebrate the advancements in education for girls and the greater participation of women within the private sector, we must also acknowledge and make progress on the great unmet needs related to maternal health, family planning, violence against women, and, in particular, the vulnerabilities of women displaced by conflict. These challenges greatly impact women’s ability to participate in and benefit from economic development.
Over the past few years, BSR has engaged on several projects focusing on increasing attention and action on issues of women empowerment that are relevant to the private sector. For example:
As we take a moment to reflect today on International Women’s Day, it is important to recognize the progress we’ve made on ensuring respect for human rights for women around the world. We must also take this opportunity to consider the challenges that still need to be overcome in order to ensure women’s full participation in the global economy.
Last week in an address to the global community, United Nations Secretary-General Ban Ki-moon said that while we should celebrate the advancements in education for girls and the greater participation of women within the private sector, we must also acknowledge and make progress on the great unmet needs related to maternal health, family planning, violence against women, and, in particular, the vulnerabilities of women displaced by conflict. These challenges greatly impact women’s ability to participate in and benefit from economic development.
Over the past few years, BSR has engaged on several projects focusing on increasing attention and action on issues of women empowerment that are relevant to the private sector. For example:
- Our women’s health initiative, HERproject, catalyzes partnerships between international companies, suppliers, and local NGOs. These partnerships focus on promoting female workers’ general and reproductive health through workplace training programs that use a peer education model. Through this model, a subset of female workers receive health education from qualified organizations and professionals, and in turn, educate their peers. A new report reveals the results of research conducted after the first year of HERproject programs in China, Egypt, India, Mexico, Pakistan, and Vietnam.
- BSR and the International Finance Corporation are researching the potential of special economic zones (SEZs) to create regulatory frameworks and initiatives that promote gender inclusion and female entrepreneurship. Together, we are examining current practices of gender inclusive policies and initiatives within SEZs in eight countries, with an in-depth look at Bangladesh. This study will focus on identifying opportunities to support gender inclusion on three levels: low-wage female workers, female managers with an emphasis on opportunities for upward mobility, and female entrepreneurs.
- BSR has also participated in the development of the Gender Equality Principles—a set of principles and indicators designed to help the private sector assess their progress on seven fundamental gender equality issues. The principles can help companies achieve greater gender equality and build more productive workplaces for both women and men. Companies can also use the self-assessment tool to evaluate their current performance against the principles.
Thursday, March 4, 2010
Rewarding the Right Performance
By Peder Michael Pruzan-Jorgensen, Managing Director, Europe, Middle East, and Africa
A French weekly magazine recently reported on its front page, “They are doing it again.” And by “it” they were referring to yet another banker’s feast of exorbitant bonuses as reward for the sector’s “terrific year.”
Much as we were locked in debate in the late ‘80s and early ‘90s when options were introduced as a means for rewarding management’s performance, so again do we find ourselves grappling with compensation—and more importantly incentive—schemes to reward superior financial performance. Unfortunately, this debate continues to be focused on financial performance and schemes that incentivize management to deliver ever-increasing shareholder returns. As a result, we have a system that spurns excessive upside risk taking while leaving the equally excessive downside risk to taxpayers or other stakeholders—all in the name of short-term profits.
Don’t get me wrong, it’s important that we discuss how to reward superior performance. The problem is that rewarding just financial performance offers only a partial view of the bigger picture of the health and long-term success of a company. And we need to discuss what we reward as much as how we reward performance.
In this light, it was refreshing to read the other week that two Dutch companies have decided to include non-financial metrics in the compensation schemes of senior executives. The life-science company DSM took the view that its management should be rewarded on performance related to reduction of GHG emissions, improvement in workforce morale, and the introduction of “green” products. Even more interesting is that the scheme has come about through a process of stakeholder consultation, including not only investors but also trade unions, politicians, and workers.
Similarly, TNT, the Dutch mail operator, unveiled plans that included customer satisfaction. This comes at the same time that oil giant Shell introduced a new management compensation plan that links to the company’s rating on the Dow Jones Sustainability Indexes.
These are not entirely new developments, as other companies, such as Novo Nordisk, have long been rewarding their executives for ensuring performance across the triple bottom lines. But they are timely amid the current financial performance media maelstrom and help draw attention to the ongoing question about how to balance short-term profits with long-term performance. And, as recently concluded in a BSR report, these compensation schemes that look beyond financial performance are well aligned with the growing emphasis on non-financial metrics in the mainstream investor community. That being said, there is still a way to go, as even companies leading in the field of sustainability continue to struggle with aligning their procurement bonus schemes with the long-term objective of promoting sustainable supply chain, according to a recent BSR study.
So while compensation will continue to be high on the agenda, we can only hope that a more nuanced debate will evolve that is focused less on the size of the reward and more on the performance that is rewarded.
A French weekly magazine recently reported on its front page, “They are doing it again.” And by “it” they were referring to yet another banker’s feast of exorbitant bonuses as reward for the sector’s “terrific year.”
Much as we were locked in debate in the late ‘80s and early ‘90s when options were introduced as a means for rewarding management’s performance, so again do we find ourselves grappling with compensation—and more importantly incentive—schemes to reward superior financial performance. Unfortunately, this debate continues to be focused on financial performance and schemes that incentivize management to deliver ever-increasing shareholder returns. As a result, we have a system that spurns excessive upside risk taking while leaving the equally excessive downside risk to taxpayers or other stakeholders—all in the name of short-term profits.
Don’t get me wrong, it’s important that we discuss how to reward superior performance. The problem is that rewarding just financial performance offers only a partial view of the bigger picture of the health and long-term success of a company. And we need to discuss what we reward as much as how we reward performance.
In this light, it was refreshing to read the other week that two Dutch companies have decided to include non-financial metrics in the compensation schemes of senior executives. The life-science company DSM took the view that its management should be rewarded on performance related to reduction of GHG emissions, improvement in workforce morale, and the introduction of “green” products. Even more interesting is that the scheme has come about through a process of stakeholder consultation, including not only investors but also trade unions, politicians, and workers.
Similarly, TNT, the Dutch mail operator, unveiled plans that included customer satisfaction. This comes at the same time that oil giant Shell introduced a new management compensation plan that links to the company’s rating on the Dow Jones Sustainability Indexes.
These are not entirely new developments, as other companies, such as Novo Nordisk, have long been rewarding their executives for ensuring performance across the triple bottom lines. But they are timely amid the current financial performance media maelstrom and help draw attention to the ongoing question about how to balance short-term profits with long-term performance. And, as recently concluded in a BSR report, these compensation schemes that look beyond financial performance are well aligned with the growing emphasis on non-financial metrics in the mainstream investor community. That being said, there is still a way to go, as even companies leading in the field of sustainability continue to struggle with aligning their procurement bonus schemes with the long-term objective of promoting sustainable supply chain, according to a recent BSR study.
So while compensation will continue to be high on the agenda, we can only hope that a more nuanced debate will evolve that is focused less on the size of the reward and more on the performance that is rewarded.
Tuesday, February 23, 2010
Evaluating the Impact of Supply Chain Sustainability
By Blythe Chorn, Associate, Advisory Services
As discussed in BSR’s recent report on key performance indicators for responsible sourcing, metrics for identifying and evaluating the impact of sustainable supply chain initiatives on society are generally underdeveloped.
However, a few weeks ago, I had the opportunity to participate in the first meeting of the United Nations Global Compact (UNGC) Supply Chain Advisory Group in Oslo. The UNGC and BSR have launched a joint project to develop strategic guidance materials for business on the implementation of the Ten Principles in supply chain programs and operations. During the meeting, we heard about an exciting initiative to procure and evaluate the impact of sustainable products by integrating rural communities into the supply chain.
Restaurantes Toks, which operates 84 restaurants in 20 cities throughout Mexico, has begun sourcing from a strawberry marmalade production group of thirteen women in the rural community of Santa Rosa de Lima. In 2005, before the project began, the Santa Rosa de Lima Enterprise provided an income of US$1K to all the families in the community, and the per capita income was less than US$60 per month. The Santa Rosa de Lima Enterprise now sells over US$461K worth of strawberry marmalade to Restaurantes Toks each year, radically increasing the community’s per capita income.
Restaurantes Toks is also working with the company to implement sustainable farming practices and to build a new facility with environmentally friendly technologies. Human rights conditions—particularly for women in the community—have improved dramatically. And due to the demonstrable impact of this model on protecting and promoting human and economic rights, Restaurantes Toks has duplicated the approach with ten other community food and handicraft production groups.
This is a great example of sustainable procurement and evaluating the impact of supply chain sustainability on communities, and we’re anxious to hear your reactions. Have you heard of similar initiatives undertaken by other companies? Do you find these kinds of metrics useful?
As discussed in BSR’s recent report on key performance indicators for responsible sourcing, metrics for identifying and evaluating the impact of sustainable supply chain initiatives on society are generally underdeveloped.
However, a few weeks ago, I had the opportunity to participate in the first meeting of the United Nations Global Compact (UNGC) Supply Chain Advisory Group in Oslo. The UNGC and BSR have launched a joint project to develop strategic guidance materials for business on the implementation of the Ten Principles in supply chain programs and operations. During the meeting, we heard about an exciting initiative to procure and evaluate the impact of sustainable products by integrating rural communities into the supply chain.
Restaurantes Toks, which operates 84 restaurants in 20 cities throughout Mexico, has begun sourcing from a strawberry marmalade production group of thirteen women in the rural community of Santa Rosa de Lima. In 2005, before the project began, the Santa Rosa de Lima Enterprise provided an income of US$1K to all the families in the community, and the per capita income was less than US$60 per month. The Santa Rosa de Lima Enterprise now sells over US$461K worth of strawberry marmalade to Restaurantes Toks each year, radically increasing the community’s per capita income.
Restaurantes Toks is also working with the company to implement sustainable farming practices and to build a new facility with environmentally friendly technologies. Human rights conditions—particularly for women in the community—have improved dramatically. And due to the demonstrable impact of this model on protecting and promoting human and economic rights, Restaurantes Toks has duplicated the approach with ten other community food and handicraft production groups.
This is a great example of sustainable procurement and evaluating the impact of supply chain sustainability on communities, and we’re anxious to hear your reactions. Have you heard of similar initiatives undertaken by other companies? Do you find these kinds of metrics useful?
Monday, February 22, 2010
Water Numbers for Real People
By Linda Hwang, Manager, Research & Innovation
In preparation for my participation in a water scarcity risks and footprints conference in San Francisco this week, I’ve been thinking about the data that bring life to corporate water footprints. These footprints typically include a company’s water usage and wastewater discharges throughout a value chain, and allow companies to effectively account for water use and impacts. However, collecting meaningful water-related information is difficult at best, and today there is no clear guidance on what information should be collected, especially when it comes to a company’s supply chain.
I started keeping a list of water-related statistics mainly because I noticed that when it came to people, the numbers were never consistent. Consider these:
- 12 billion gallons can supply 200,000 people for one year.
- 200 million gallons is enough for 614 typical U.S. families.
- 10 billion gallons is enough for 400,000 Americans.
- 1 acre-foot can support two families of four for one year.
How much does a village of less than one thousand people in Mali need? How much does one person working as an agricultural day laborer need? How much will it cost to supply that water? These questions make calculating the amount of water required to make one pint of beer or one cotton T-shirt seem relatively straightforward.
BSR is working with one global agricultural company that is struggling with the questions related to drinking water required for individual workers and surrounding communities. What I found fascinating is that the company’s seemingly thorough initial water footprint analysis—providing detailed metrics including blue water, green water, source of irrigation, and 10-year average rainfall for hundreds of production sites—did not highlight the fact that at many of those sites, the company’s contract laborers did not have sufficient access to clean drinking water.
At many of the sites, the company’s contract growers sub-contract the labor to work the fields, which means the company does not account for the volume of drinking water required for these workers. Moreover, at each production site, this amount pales in comparison to the volume of irrigation water required, a second reason that this number often goes unseen. There are no red flags that will draw attention to this volume of water.
But despite the size, the workers’ water is a component of the company’s water footprint, and without it, the company can’t address a fundamental challenge that could pose a significant risk to its agricultural operations.
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