Highlights from the OECD’s Responsible Business Forum 2016
In a previous post, I offered my reflections on the OECD’s Responsible Business Forum, which took place on 8–9 June 2016. I focused in particular on what I saw as the main themes, as well as some points that I thought were missing and could have further enriched discussions.
“Only through active dialogue can we hope to address the serious issues that persist in global supply chains” — Angel…medium.com
This post takes a different approach by rounding up what struck me as exciting during the Forum.
*Abbreviations include RBC (Responsible Business Conduct) and MSI (Multi-Stakeholder Initiative)
By OECD Secretary General Angel Gurría
- Placing the OECD Guidelines for Multinational Enterprises in its wider context, Secretary General Gurria argued that responsible business conduct needs to support the Sustainable Development Goals, as well as the Paris Agreement.
- He noted that a cross-sector guideline is in preparation, which distills the common elements across sectors.
- A total of 19 major firms have reported an audited use of the OECD Guidelines in their SEC filings.
Session 1: Making an impact through responsible business
Panel A: Making an impact through innovative policies
“We need a mix of voluntary and mandatory [approaches].” — Douglas Frantz, Deputy Secretary General of the OECD
Moderator: Douglas Frantz, Deputy Secretary General of the OECD
- Marten van den Berg, Director-General, Foreign Economic Relations, Ministry of Foreign Affairs, Netherlands
- Signe Ratso, Director, Trade Strategy and Analysis, Market Access, EU
- Pierre Duquesne, Ambassador to the OECD, France
- Harrison Cooter, Head, Transparency in Supply Chains Policy, UK Home Office
- Aung Tun Thet, Focal Point on Responsible Business Conduct, Government of Myanmar
Douglas Frantz: States are putting teeth into RBC and sustainable development — Canada through an inter-departmental working group, France by developing supply chain legislation, the UK through the Modern Slavery Act, and the US through its new trade act.
Marten van den Berg from the Dutch: The Netherlands have found it more effective to address issues such as forced labor through voluntary discussions and agreements with stakeholders.
Panel B: Using leverage to advance responsible business
Moderator: Roel Nieuwenkamp, Chair, Working Party on Responsible Business Conduct, OECD
- Steve Waygood, Chief Responsible Investment Officer, Aviva Investors
- Giulia Guidi, Executive Director, Global Environmental and Social Risk Management, JP Morgan
- Kamil Zabielski, Head of Sustainability, Norwegian Export Credits Guarantee Agency
- Christy Hoffman, Deputy General Secretary of UNI Global Union
- Gillian Caldwell, CEO, Global Witness
Roel Nieuwenkamp opened the session by stating that RBC-related issues are being solved by investors in collaboration with NGOs and other actors — examples include the divestment movement.
Steve Waygood from Aviva Investors: “Where are the standards for responsible investment? They don’t exist!” Though the Principles for Responsible Investment have become a reference, they are not a standard: membership only proves the firms have filled in a questionnaire and paid their fee.
He also announced the recent launch of the Corporate Human Rights Benchmark:
The Corporate Human Rights Benchmark (CHRB) is the first-ever ranking of the world’s largest publicly listed companies on their human rights performance. The CHRB has now begun its pilot benchmark process. The final scores will be available in November 2016.
(See also this article about CHRB in Forbes)
Giulia Guidi shared JP Morgan’s approach to ESG and how the bank uses its leverage for RBC:
- An overarching policy based on three cross-cutting themes: human rights, climate change, biodiversity/conservation.
- Looking at three levels: transactions, portfolio and strategy (on this level JP Morgan works with a range of actors including the OECD and the Task Force on Climate-related Financial Disclosures of the Financial Stability Board).
- Effective control system for transactions based on sector, geography (where the asset is based and where the client is operating), and type of transaction.
- Overall, due diligence for ESG is based on the product and contextual risk. If the bank is not satisfied, it will pull out.
Christy Hoffmann from UNI Global Union discussed how a lot investors say they invest in ESG, although they mostly just look at the G[overnance]. There is a need to transform how we look at the social element of due diligence and human rights, moving beyond only looking at child and forced labor.
WWF lunch session: Protecting World Heritage Sites and the role of the OECD Guidelines
Moderator: Roel Nieuwenkamp, Chair, Working Party on Responsible Business Conduct, OECD
- Mechtild Rössler, Director, UNESCO World Heritage Centre
- Okko-Pekka Salmimies, Ambassador, Permanent Representative to UNESCO and the OECD, Finland
- Sandy Stash, Group Vice President, Safety, Sustainability and External Affairs, Tullow Oil Plc
- Giulia Guidi, Executive Director, Global Environmental & Social Risk Management, JP Morgan
- Zach Abraham, Director of Global Campaigns, WWF International
Sandy Stash from Tullow Oil delved into the history of how the extractive industries gradually became committed to protecting World Heritage sites through ‘no go’ decisions. Tullow Oil reached the decision about three years ago, but didn’t formalize it until last year. The challenge was to hard-wire commitments into company policy.
She also helped elucidate the difference in approaches between mining and oil & gas industry associations: whereas the large mining ones are led by CEOs, the oil & gas ones are either very political organizations or operating more at the level of “good ideas”.
Session 3: Addressing severe human rights impacts in global supply chains
Moderator: Lene Wendland, Head, Business & Human Rights Team, Office of the UN High Commissioner for Human Rights
- Klara Skrivankova, Europe Programme and Advocacy Coordinator, Anti-Slavery International
- Sawit Kaewvarn, General Secretary of State Enterprise Workers’ Relations Confederation
- Dante Pesce, Chair, UN Working Group on Business and Human Rights
- Thomas Kendrick, Customs and Border Protection, U.S. Department of Homeland Security
- Francesco Tramontin, Director of External Affairs Europe, Mondelez International
- Giovanni di Cola, Special Advisor to Multilaterals, Office of the Deputy Director General, ILO
Lene Wendland introduced the issue of human rights impacts in supply chains as requiring multi-faceted interventions at both states and company, but also a role for civil society and trade unions.
Klara Skrivankova from Anti-Slavery International argued that while it is almost inevitable for there to be slavery somewhere in complex supply chains, it is the failure to address it that distinguishes frontrunners and laggards. At the same time, though it would be misguided to ask business alone to address such problems, they are often too quiet when confronted to them.
Session 4: Taxation and responsible business conduct
Moderator: Caroline Malcom, Counsellor, Centre for Tax Policy and Administration, OECD
- Susana Ruiz Rodriguez, Director of the Private Sector Department, Oxfam America
- Teresa Fogelberg, Deputy Chief Executive, Global Reporting Initiative
- Germán Miñano Fernández, Head of Tax Policy, Repsol
- Fiona Reynolds, Managing Director, Principles for Responsible Investment
- Toufik Saada, Certified Accountant, Syndex
Susana Ruiz from Oxfam noted that there is no responsible business without responsible taxation: taxation is one of the most direction contributions a company can make to a country.
Teresa Fogelberg of the Global Reporting Initiative argued that reporting and transparency have a self-cleaning effect, which generates both change and trust. For this reason, a “reporting” turn in policy and regulation has emerged, the latest outcome being the EU Directive on Non-Financial Reporting.
Session 6A: Multi-stakeholder initiatives and RBC
Moderator: Joris Oldenziel, Head of Public Affairs and Stakeholder Engagement, Accord on Fire and Building Safety in Bangladesh (tbc)
- Ben Collins, Program Coordinator, Institute of Multistakeholder Integrity
- Serena Lillywhite, Corporate Social Responsibility Development Advisor, Cooperation Committee for Cambodia
- Anne-Marie Fleury, Director of Standards and Impacts, Responsible Jewellery Council (RJC)
- Christian Hagemann, Senior Policy Officer, Sustainability Standards, German Federal Ministry for Economic Cooperation and Development (BMZ)
- Kristin Komives, Executive Director, ISEAL Alliance
Ben Collins from MSI Integrity is conducting a mapping project with Duke University. So far, they have found that:
- MSIs are focused on human rights and environmental governance.
- Two main categories of MSIs: on standard-setting (i.e., as a forum for shared learning, dialogue, etc.); standard setting. The latter tend to emerge in areas of weak or absent regulation, often following disasters.
- Many MSIs model themselves after regulators.
- Overall, they are very formalized and being integrated into international frameworks.
Joris Oldenziel posed the fascinating question: To what extent are MSIs actually part of the regulatory framework? And if so, do states recognize them?
Serena Lillywhite of the Cooperation Committee for Cambodia highlighted a number of pitfalls for NGO involvement in MSIs, including:
- There is a risk of perception that civil society has been co-opted. Being part of an MSI also makes it harder for them to take a harder stance in their work.
- Compromise is central to MSIs, especially if they are consensus-based: this can mean ending up with something very much watered down and lacking in legitimacy.
Christian Hagermann from the German BMZ presented the Sustainable Textiles Partnership, which is a benchmark rather than a standard-setting initiative — it makes use of existing standards and systems. The innovation at the core of the initiative is the move away from action plans towards a focus on process and continuous improvement through road-mapping and review processes.
Kristin Komives from ISEAL Alliance argued that organizations such as her own provide an operationalization of sustainability: by joining MSIs, firms are able to access knowledge and expertise.
She added that there remains a lot of room for innovation in sustainability standards and that no single initiative can be powerful enough to create the change that we need.
Anne-Marie Fleury from the Responsible Jewelry Council noted that for MSIs there is both a timeframe issue and one of expectations. When commodity prices are high, there is a lot of pressure from & from companies to go fast, often at the expense of the need to engage.