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S3E1: Corporate reputation and human rights

Georgie Erangey from BRODIE Consulting talks to Daisy about how new human rights is as a concept, what the reputation risks are for companies, and whether there is any upside to getting this right. TLDR; don't do this for the accolades, do it for your conscience and as risk mitigation. Human rights and supply chain due diligence passed swiftly from a novelty to becoming a hygiene factor. You will rarely get credit for getting supply chain right - but it will protect you from supply chain instability, legal threats and reputation problems down the line. And what does that all mean for you? Our key takeaways are: 

  • Understand where you have the greatest leverage and greatest potential for impact - this will be unique to your company.

  • Focus on that sweet spot because that will also be what you can communicate most credibly.

  • Think about all those audiences that might have questions about that, whether that's your consumer, your peers, the regulator, investors - credibility is what will win.

Find the full Sustainability Sentiment Tracker report HERE or listen to the whole episode here:



Or read the transcript in full here:


S3E1 - Corporate reputation and human rights


SUMMARY KEYWORDS

human rights, supply chain, companies, consumer, impact, business, sustainability, people, world, understand, governments, broader, complexity, safeguarding, evolving, greatest impact, communication, communicate, trend, brands


SPEAKERS

Georgie Erangey, Daisy Powell-Chandler


Georgie Erangey

Hi, I'm Georgie Erangey, the co-founder of Brodie Consulting. We're a responsible business consulting firm, headquartered in London.


Daisy Powell-Chandler

Hi, Georgie, so lovely to have you with us today. Thank you, I really want to talk to you about our sustainability sentiment tracker. Because there's some really interesting findings in there, I think, on the supply chain side, which I know is your absolute passion. One of the things we noticed whilst talking to consumers in all of the many focus groups that we did was that whilst consumers do flag up their concerns about workers rights and supply chains, that's a whole load of complexity that they find very difficult to tackle and particularly to understand on packaging. So quite a lot of them use country of origin as a proxy for how employees are being treated when they're making purchasing decisions. We see that trend most strongly amongst the oldest consumers, but it's also something that we're seeing in the youngest generation. So how should firms be responding to that? And what's the impact on the way in which companies should be structuring their own responsibility approach?


Georgie Erangey

It's fascinating. I love this topic. So thank you so much for the question. So I think there's kind of two parallel trends working here. There's one around complexity, as you say, there's just that it is so complex, the different power dynamics, the different structures, policies, processes that are in place between governments and in between governments, between governments and business. This is a complex system that they're operating in. But the other and slightly conflicting trend is around transparency. So there's this trend for making the complex simple, and also telling us everything. So I think when approaching this as a company in thinking about how do we most accurately represent what the genuine risk is connected to a product and connected to a supply chain? It's about looking at the various proxies, because there's no one way and when we look at this through the kind of human rights lens, there's no one way of saying like, this is risky, this is not risky. Because it's an ever changing dynamic. It depends on how much control do you have, how much leverage do you have to make change within that part of the supply chain? And so, looking at it purely from from a business context, there are some red lines, of course there are - there are kind of core and severe and egregious human rights violations in some countries that you just know, you need to avoid, or you just position yourself as part of the solution. So I think that that's one kind of key area - understanding your position and your ability to tackle that change. But then you're confronted with a growing regulatory world where you're having to disclose: where are you sourcing? What are you doing to tackle these issues? So you're kind of stuck between these two areas of needing to needing to disclose and to be transparent. But also, it being really, really complicated, and there being so many different things at play, that have an impact on your success of being able to tackle those risks.


Daisy Powell-Chandler

I think what really stands out to me from that is that there are some companies out there who are going to get caught whilst doing something really admirable, because for the overall good and progress over time, we surely want big powerful companies that can have an impact on supply chains and can influence other countries supply chains for the better. We want them to be engaging in countries that have more dubious human rights records and demanding higher standards. But for example, what we see time and again, in the research is that, given the various current geopolitical issues that we're seeing around tariffs and human rights, we've seen a real hardening of views against China in focus groups, just as one particular example. It's not the only one, but it's definitely the one that stands out. But that poses a real dilemma, it seems to me for companies that have made the effort to go into China, and make sure that they're working with supply chains that don't have slavery in them that avoid really troubled areas of the country, and that seek to find ways of working constructively with China, which could be a really positive thing over time, both for global markets for the people who live in those areas and for geopolitical stability. So if we then see threats to the reputation of those organisations, that seems to me like it's going to have a negative impact on world stability over time. So how on earth do companies go about untangling that problem?


Georgie Erangey

Yes, yes, it is a real challenge because as you say, when when it companies have stories to tell because they've been working in these more challenging geographies, they don't always get celebrated for that because human rights and and the kind of worker rights space, once you've done work in it, and you've started to tackle problems, you're talking about problems and their solutions, but you're, you're bringing to your awareness, you're hanging out the dirty laundry, essentially - saying, we found this, this was awful. This is how we fixed it. Whereas in other types of sustainability communications, it's positive storytelling, it's like we've had this positive impact here, we've changed this, whereas effective human rights communications and disclosure is often pretty grisly. And so it's being able to position that in a way, which starts to focus more on the outcomes of actions and the impact of those actions. Whereas at the moment, what we're seeing a lot with corporate reporting on human rights is the input.. So it's like: we've done X number of audits or, or we've done X number of root cause analysis assessments. And so it's, the social side, and particularly the Human Rights side is not yet in a place where consumers understand it. And therefore there's less of a pressure beyond this regulatory pressure, which is a significant one, and is growing more in the investor space, too. But there's not so much of a clear direction of what people want to know about it. And so they, China's bad, because I've heard bad things. Rather than do I want to understand the nuance of a particular female empowerment initiative going on in a garment supply. They don't want to know that, they just want the simplicity, they want to know what they can use to make their purchasing decisions. And so that makes it really hard for a company because they've got these different audiences that they've got to satisfy, because of the human rights world touching so closely in on their relationship with governments. And that is where the kind of rule of law - if we take ourselves back a step, human rights historically didn't have much to do with corporations, it's only relatively recently, I mean, human rights in themselves as a concept are really quite young as well, if we think we're only speaking about, you know, 80 or so years, it's really, it's just so interesting to see how, how governments is the contracting government and citizen that we're talking about. And now businesses due to globalisation, due to their kind of pervasive role and employment in services and products, they've become entwined with that contract of government to citizen and we need to figure out their role. We've got international legal norms to help them figure that out with the UN guiding principles on business and human rights. And there's so many tools out there to help companies understand their roles, their responsibilities. But at the end of the day, we've got these kind of three pillars: the kind of state duty to protect human rights that's enshrined in all of the UN declarations; you've got the corporate responsibility to respect, so you've got this kind of protect, respect dynamic between state and business; and then you've got this need for the access for remedy, because bad things do happen. And with the best one in the world, no one company is going to fix all of that no one country and government could fix all of that, because it's a constantly evolving change of power dynamics. It's just it's so entrenched in so many other discourses around geopolitics around so many different other elements. So, yeah, that's not really an answer is it, Daisy - it's complicated.


Daisy Powell-Chandler

It is, it's really complicated. And I think what you say about that evolving role of the business is something that I think can be really intimidating for businesses, but can also be quite empowering, you know, saying - we understand this is hard, your role is evolving, that's always going to be hard for a big corporate structure to deal with. Because reorganisation is hard, change is hard, especially as you get bigger. But I think there's a kernel in there of something that you mentioned at the start about, also the way in which you communicate that. So it's not just, it's a lot of it is about making sure you're fulfilling your duties, and making sure that you're doing right by people and obeying the rule of law. But there is a further point about the complications of communicating that. And I suppose maybe that stands out to me, because it's quite often where our work crosses over: how can you make sure that you are communicating to regulators and legislators about the work that you're doing to comply with their evolving process, but also explain that to your internal audiences? Why you're doing that, why there's suddenly more of a paper trail required, why there's more audits, why there's a new team, perhaps doing a whole set of processing, and at the same time, trying to explain that in a way that is accessible to the consumer, so that you get at least some credit for it. But also you perhaps explain why they're seeing some change in terms of what their packaging looks like, where their product is coming from. Why you have stayed with China, despite some controversy, and I find that process of unpicking the complications, and then trying to mesh your actions and then how you communicate and articulate those to different audiences particularly fascinating. I wonder whether you've got any recent examples of where that process of articulating the problem has actually changed how you've looked at the problem.


Georgie Erangey

Yeah, I think one that springs to mind is, is where, actually sometimes we often think about how do we get credit for this, because you know, it's competitive advantage - if you're doing work, you should get the credit for it. But actually, within the human rights space, sometimes, the consumer doesn't actually want to know, they just want to be in kind of blissful ignorance that they can trust. It comes down to this whole, we actually don't want to know the details, we want just to be able to trust and continue with our, with our purchasing decisions without feeling guilty. So it's actually, we don't want to know, we just don't want to feel guilty about it. And so it's actually sometimes with the Human Rights communication space, it's just a hygiene factor, we need to just get that bit right. So then the audience becomes primarily that of a regulatory environment rather than a consumer. And that's by no means always the case. But I think that's an interesting thing that evolves because often human rights get seen in the same bucket as broader sustainability topics, because it's one of many areas that businesses need to focus on to ensure that, you know, social licence to operate, and they're kind of broader ESG credentials. But it doesn't always come forward in a very consumer facing way. I mean, you see examples of brands like Tony's Chocolonely - they've built a brand of slavery, free chocolate, I mean, that's ambitious. And it will be really interesting to see how that evolves, being able to kind of keep those claims - they've had a few examples where they've been attacked for that. Because these supply chains are vast, global and complex. And so making bold claims, and kind of having a very consumer-facing initiative about it is something that's really quite difficult to back up. Whereas then you see companies like Unilever, who've been producing specific Human Rights Reports, which are not directed towards a consumer audience, but are there openly available to anyone who wishes to read them, which go through so much of the detail and give examples connected to brands and help people understand for those very interested stakeholders, they've got that at their fingertips should they wish to have that, but I think it very much depends on on the company, because you either want to make a virtue of it and kind of put it on your packaging and say, it's slavery-free. Or you want to just be able to build the foundations of trust so that your consumer knows that's not the case. And then that's not that they need to start building into their consciousness, and that they're supporting a company that acts in that way.


Daisy Powell-Chandler

I couldn't agree more with that. I think there's a really important point here: sometimes the work that we do, to do the right thing does help safeguard our reputation, but it's not necessarily something that we're out there shouting about right now. What we're doing is, in fact, safeguarding reputation risk in the future. And we have seen over the past few years cases where big brands like VW thinking about emissions, or boohoo another sort of interesting case in their supply chain world, have seen real impact that has really hit straight at share price, at influencer relationships, at regulator relationships, and has had a very immediate impact that can be seen and felt commercially. And so actually, a lot of this work may be in the background, but that doesn't mean it isn't commercially important.


Georgie Erangey

Absolutely. And it's safeguarding it for the future exactly as you say. Because if you it's kind of a bit - you don't really get the credit when it goes right. But you certainly get the kind of harsh reality if it goes wrong. And so it's one of those things which is really important and directly connects to business success, but is sadly one that you tend not to get the credit, if you shout too loudly about it when it's all doing really well.


Daisy Powell-Chandler

And one of the other things that really came out of our focus groups was that this phrase fast fashion and the idea that it's a problem and it's something that we need to be dealing with has really penetrated the public consciousness. Where else are you seeing this come out in your work?


Georgie Erangey

So I think it feeds up into a broader trend around kind of conscious consumerism and so we're seeing consumers beginning - and I think it's very important to orientate ourselves on what stage of the journey the broader kind of consumers are at on this because there's still a pretty big value action gap around, you know, we we know that fast fashion is a problem but are we still going to be going and buying our clothes on a weekly, monthly basis at the moment? Yes, we've got some really big brands making quite a lot of money off. So, yes, I think it builds on this broader conscious consumerism trend, which is around wanting to know where things are from, and being more mindful of the choices that we make, and it's understanding of the effect that our smaller individual decisions can have when they're aggregated up to a wider society and world. So I think, I mean, we see it so much in the younger generation, about their awareness and their, their raising of awareness around the climate crisis, and the decisions that they're making around how they travel, how they live, and things that will become completely normal and mainstream. Whereas it seems quite radical to, I'd say, the broader society at the moment, but I think the fast fashion one is really interesting. It also touches in on these changing kind of economic models around circularity. And it's a really easy way for everybody to connect to something which is quite actually quite technical and complex, because we all wear clothes, or at least, we should all wear clothes. And so it's something we can all relate to. It's like, well, where does where does what I wear go to, if I'm buying clothes frequently, how can I, how can I be part of something which isn't as wasteful, and so that we can as individuals connect with and make small changes to our behaviour to have a much bigger impact, and we're seeing huge growth in the resale market which has really taken off. And so I think it's something we can all do individually, which ladders up to a much wider societal impact.


Daisy Powell-Chandler

And I thought one thing that was really interesting that fell out of our segmentation. And I really would encourage listeners to go and have a look at the report and have a look at the six segments that came out of our research because they do have quite different characteristics. I think one of the fascinating things about them, actually is that we didn't end up with an anti group, there wasn't a group out there that said, sustainability doesn't matter to me, it just got put somewhere different in the pile of priorities for some groups. But I think one thing that interests me on this topic is that the different segments had different ways of accessing this idea. So for some groups, actually reusability and supply chains, and the way in which they interacted with fashion was perhaps - I think one could be a bit mean and call it self centred. But it was about "well actually if I, if I pay a bit more, it is probably better quality, and it will last me for longer. So actually, I'm also saving money, and it will be nicer." And there were people for whom it was very much an ethical decision. And it was about their conscience, rather than perhaps the impact, it was about "I don't have to feel guilty if I buy something that comes from a better supply chain." And there were other people for whom it was definitely about their impact on the world. And they felt quite aggrieved, actually, when they felt companies weren't giving them a choice that was ethical, that also had all the features they were hoping for. So I remember vividly one woman in the focus group saying why can't I buy an anti wrinkle cream that works, but it's also in a recyclable pot, for example. So and that was also true of supply chains. So they were saying why isn't it possible if I'm out and I need a new sweatshirt urgently, why is it so hard to try and work out what the ethical choice is in in garment choice? And yes, there are also a whole load of people for whom that transparency is also overwhelming. And they were saying you know I don't know what this label means versus this label. And if I'm in the supermarket, and my kids are running around, how on earth am I supposed to choose between even two types of pasta, other than maybe looking for one that doesn't have plastic on it. So we know lots of people are feeling overwhelmed. But it really stuck out to me that people access this agenda in lots of different ways. So no matter what your brand positioning, you don't have to be Tony's Chocolonely, or a specific sustainability brand, to really help people to achieve their goals around sustainable sourcing. And in fact, when we asked people what the most sustainable brands were, almost entirely was big name brands. It wasn't sustainability specific brands that came out in that list, which I think will be a surprise to a lot of the sector, won't it?


Georgie Erangey

Yeah, absolutely. And I think that comes from, from the clear communication and the scale that Amazon - who came up at the top of our list - have, that they have the climate pledge, they've got clarity with their communication of what they're seeking to achieve. And of course, you you can look into the details of that and make your own assessments as to how much impact that's going to have but I think that when it comes to these different segments and these different consumers who are approaching sustainability, there is that common thread of well what what am I looking for, what gives me that signal that I'm making the right purchasing decision. And for even the really engaged ones who want to buy their anti wrinkle cream and know that it's know that it's sustainable, it's then also a thing from a company perspective: what signals are companies using? We've got certifications, we've got audits, we've got all these different tools in our toolkit, but actually, that there doesn't exist one single stamp of this is sustainable. And I think that is what companies across all the sectors we're supporting at Brodie are really struggling with - can we define our product as sustainable? Or must we go to these different certification bodies, to have it stamped by them? And if so, who do we use? And what part of our supply chain does that cover? And if we're looking at recycled content, how do we certify a chain of custody that is recycled. And then if we're looking at the fashion apparel sector, you've got all these really interesting external benchmarks and assessments of companies and they say different things. So you can look at one company and they're ranked pretty highly. And you look at that exact same company and the exact same reporting year, and it's a bit lower, and you think, well, which one do I trust. So I think, just to add complexity to complexity, there's this really dynamic space around how we define what's sustainable. And I think this is the guidance, so that I've not only added complexity to this conversation, but hopefully some help and clarity is that it really does depend on your supply chain - understanding where you have the greatest leverage and greatest potential for impact. And then being able to use that, rather than trying to boil the ocean, focus on where you have the greatest impact, because that will be what you can communicate most credibly, that is what will support you most from a kind of credibility and transparency perspective. And think about all those audiences that might have questions about that, whether that's your consumer, your peers, the regulator, investors - credibility is what will win, because that's where and that's where you will have the greatest impact. So it's really about focus. In all this complexity, you need to kind of be able to define clearly your path. So you can chart that yourselves, because it will be the company that can can really understand where it has the greatest impact.


Daisy Powell-Chandler

I think that's absolutely true. And it's definitely what I say to my clients. It's partly about trying to find an agenda that you can authentically own. You could commit to something against every UN Sustainable Development Goal. You could you could commit to 17 sets of targets, with KPIs against every goal, and you maybe achieve something, you might brush up internally a little bit. But where you're going to make real impact, real progress is by identifying something that your team is enthusiastic about, that your work already impacts on and that your stakeholders care about. And if you can find that, and then really understand how you can change that, you will find an agenda that is authentically yours that will organically improve your reputation if you're good at it, but also probably do the most good in the world, which seems like probably the right place to be looking at.


Georgie Erangey

Pretty good combination really.