Pablo Sánchez és professor de Negocis Inclusius al GNMI i cofundador i director executiu de B Lab Spain, l'organització que representa B Corp a Espanya.
The Université de Genève together with the Geneva School of Economics and Management gave a talk with Dorothée Baumann-Pauly, an expert in Business ethics, Corporate Social Responsibility and Human Rights, to create a unique opportunity to reinforce links with society and maintain a sense of ritual.
As Dorothée Baumann-Pauly stated, the world is moving in a direction that makes the integration of Human Rights a critical success factor for business sustainability. We need to focus now on the development of new business models that have respect for Human Rights, and that have them at the core of their business operations.
But is the environment part of Human Rights? Are they even compatible? This could sound like an oxymoron, but indeed, integrating Human Rights in businesses is one of the biggest challenges nowadays. Companies should think of both concepts as two sides of the same coin, meaning that if we destroy our planet humans cannot live anymore.
Many companies have realized this need and they are making the environment a priority in their businesses, but still, they should include in parallel social impact themes, because one does not go without the other. However, the model approach transition is not happening if developing economies are not part of the deal.
For example, the device that is enabling you to read this article has a battery power that contains cobalt, a mineral originated basically in the Democratic Republic of Congo, where 2/3 of the global cobalt consumption is from. Because of the minimum safety standards provided mining accidents happen frequently, child labour is common, and mining communities live in poverty.
Many European countries are planning to ban gas fuel cars to reduce emissions and make a transition towards electric cars. Some car companies reacted to this transition, but car manufacturers should bear in mind that on average an electric car contains 8kg cobalt. This is a massive amount compared to the tiny quantities that are used in electronic devices such as phones or computers. However, the car manufacturer would have no other choice but to source cobalt from Congo.
Sustainable model approaches
To solve this dilemma, it is evident the importance of building long term sustainable business strategies, because we cannot ignore Human Rights through all the steps of the supply chain. Then, we could ask ourselves: could mining be sustainable? Indeed, it could. It could be a path for mining communities to be lifted out of extreme poverty, but for this to happen it must be done right. The outsourcing of production has to be accurately managed and we have to carefully look at business models that offer good sustainable supply chains and that explorations are done more responsibly.
The way we address purchasing practices can make all the difference. Alternative purchasing practices and subcontracting strategies push Human Right on deeper layers. For example, committing with suppliers in the long run, which is ideally 5 years longer, is the so-called partnership approach, which has many advantages, for both the supplier and the worker.
On one hand, the partnership approach allows the brand to improve production methods and product quality over time and flexibility to discuss order changes, and, on the other hand, offers the supplier stability and enables them to invest in its business and training, upskilling the workforce and productivity levels.
Additionally, companies who integrate new sustainable business approaches help their brands to have full transparency and work with shorter supplier lines. Still, in a short-term enterprise view, engaging Human Rights may cost some money but is what it takes to create a sustainable business model to work for the long term. They also have to make a timing and economic investment in making sure that outsourcing of production helps fair globalization and lead to social-economic development in those countries to move on and diversify industries.
Governments and corporations
Despite all possible new model approaches that companies could gather in their business operations and strategies, yet many companies are not handling new model approaches as their core business models and, consequently, is the national government’s role to protect Human Rights and make them as a spotlight in corporations or at least in any democratic state should be like this. Nevertheless, it is understandable that for many companies, promoting Human Rights might sound overwhelming, but it is feasible and desirable for business and they could do that by embracing three concepts.
To begin, companies need to acknowledge that implementing and incorporating Human Rights in business operations is critical for business success. Corporate leaders recognize that they need to know how to implement it because it could be tricky, because the question nowadays is not whether the companies should work or not into human rights anymore, but to have the know-how.
For example, the company Unilever gave a thought on it by understanding that without healthy societies there are no healthy businesses. They decided that instead of putting the shareholder first, they would rather focus their company on proving lives with citizens and this would turn in good shareholder returns. Although some companies could wonder that maybe consumers do not care or appreciate that we are working on more sustainable products or approaches, what they should do is to work on their marketing strategies on educating the consumer and appreciating the added value on the product.
Second, companies must understand that this is the right time to integrate all the processes and to complete the transition. There is mandatory due diligence in Human Rights in Europe, and an emerging legal framework that enables to measure, control and report the impact of activities, such as in France there exists a Human Rights Due Diligence, or in Switzerland with the Responsible Business Initiative.
And at last, but not least, businesses need to work on three levels: in the short term, they need to respond to Human Right issues as they emerge, in the medium term there should be a transition of business models that have Human Rights at their core, and in the long term they have to teach the next generation of leaders.
In an ideal world, governments and democracies would protect Human Rights and companies would not be part of the problem. That is why the role of business schools is important to educate in the implementation of Human Rights because they play a critical role in making it real to the forthcoming generations of global leaders. We as individuals, corporations or governments, should understand that a new business strategy is not made for a single company, but an entire industry flowing in the same mainstream.
En una nova entrevista de la sèrie de converses en l’àmbit de la responsabilitat social, Xavier Carbonell, director de la Càtedra MANGO d’RSC d’ESCI-UPF, parla amb Santiago Garcia-Milà, subdirector del Port de Barcelona i responsable d’Innovació i Estratègia de Negoci de l’entitat.