This position paper clarifies the ambitions of the B4IG coalition through a roadmap built in collaboration with the member companies to advance Inclusive Growth. It covers key areas of action on which members are willing to work to implement the B4IG Pledge that is anchored in three objectives that are fundamental to inclusive business: advancing human rights in direct operations and supply chains; building inclusive workplaces; and promoting inclusion in company value chains and business ecosystems.
Read the full pdf version here : Board meeting position paper: Building an Inclusive Recovery
Tackling inequality is more necessary than ever
In 2019, the French Presidency of the G7 put the fight against inequality at the centre of its policy agenda, with cross-cutting discussions which covered employment, gender, development, education and finance, along with a dedicated session on “Fighting Inequalities” at the G7 Leaders’ Summit in Biarritz. The session stressed that inequalities significantly challenge global stability and prosperity, the cohesion of our societies, and our citizens’ trust in democratic institutions. In turn, these all contribute to undermining robust and inclusive economic development. Against this background, on the eve of the Biarritz Summit, President Macron hosted the launch of the Business for Inclusive Growth (B4IG) coalition, bringing together governments, business and investors around a common agenda for inclusive growth.
Now more than ever, tackling inequalities is a necessity as the most vulnerable have been hit hardest by the COVID-19 crisis and as social movements such as Black Lives Matter have demonstrated the persistence of systemic discrimination.
In today’s context, it is essential that the fight against inequalities remains at the top of governments’ and businesses’ agendas.
Roadmap for an inclusive recovery
Today’s crisis has exposed how serious existing vulnerabilities are and has put workplaces under increased pressure. Those groups of workers that have always been vulnerable to systemic inequities and discriminatory behaviours and practices have been disproportionately affected by the pandemic and its economic aftermath. Today’s economic crisis compels us to reject the temptation to return to “business as usual”. Instead, businesses and governments must seize the opportunity given by the recovery to tackle systemic inequalities and build resilience in the face of unknown yet impending future shocks.
Governments and businesses must coordinate their efforts to define a common approach to an inclusive recovery which will ensure opportunities for all in the future of work and building longer-term resilience.
In line with its Pledge, the B4IG business coalition is committed to playing an active role. As such, we have already begun several initiatives and are working collectively on guidelines and actions inviting governments to define a joint roadmap for an inclusive recovery that cuts across four areas of intervention: (1) The Future of Work, (2) Responsible Restructuring, (3) Diversity and Inclusion, and (4) Living Wage and Social Protection.
The future of work
The global economy is going through rapid and massive changes, and some have been exacerbated by the current crisis. We must ensure the workforce is prepared for the future of work and that no one is left behind.
Preparing for accelerating automation
Many workers are now at a higher risk of seeing their jobs automated, as the pandemic forces automation which fundamentally transforms the economy. It is essential that we prepare for accelerated automation and restructuring by supporting training and transitions for workers whose jobs at risk of automation.
Preparing for future growth sectors
Global unemployment has risen sharply due to the pandemic and lockdown measures, while many growing sectors still struggle to find employees. As millions of workers need to be re-employed, training, re-skilling and workforce transition efforts should be oriented towards jobs with the most sustainable prospects for the future. We must step-up work-based learning, especially for young people. This includes the development of experiential learning initiatives and training systems that guide workers towards the jobs of tomorrow.
Bridging the digital divide
The pandemic has shown that, even in countries with strong digital economies, large sections of society do not have adequate access to digital infrastructure, tools, or skills. As economic activity reignites, a significant portion of our daily business activities will likely remain online, with digital channels remaining critical and even essential. We aim to group efforts to have more impact, share and spread the best initiatives to improve affordable and universal access to secure digital infrastructure, tools, content and skills, and promote training in digital and technology related skills.
Responsible restructuring
The COVID crisis may lead to accelerated restructuring resulting in job loss which can be significantly disruptive for local communities, especially in areas which lack economic diversity. As a coalition, we have an opportunity to initiate concrete collective action from member companies on specific topics linked to responsible restructuring. It is important that companies assess their impact on the workforce, the supply chain and subcontractors, and local communities, as well as take a proactive view on how jobs and skills will evolve to prepare employees for the future of work. Our goal is to provide guidance and tools to organisations to help manage change and ensure it takes place in a responsible and inclusive manner.
Diversity and Inclusion
The COVID-19 crisis distracts business leaders from progress on Diversity & Inclusion (D&I) and risks back-sliding on D&I progress, as financial sustainability is prioritised at the expense of broader objectives. We insist that the crisis demands a greater focus than ever on D&I, especially as disadvantaged groups have been disproportionately affected by COVID-19. Our ability to build truly diverse and inclusive societies and workplaces is more than ever essential to a responsible and sustainable recovery.
Strengthening commitment to a culture of equity and inclusion
As attention turns to driving business sustainability and growth, it is essential that organizations adhere to the commitments they have made towards building inclusive workplaces, where all people can be themselves and work at their full potential. This means looking at diversity in its broader scope, from gender, ethnicity, culture, disability to sexual orientation, aiming at reflecting the society in which we are operating, translating it into a set of actions, sponsored by top leadership and ingrained into key organizational processes and company culture, nurturing flexibility and work life balance for all.
Fighting racism inside and outside the organisation
Workers facing discrimination are all particularly affected by the crisis. While discrimination varies depending on the local context, common reasons for discrimination include ethnicity, nationality, religion, and sexual orientation. The major challenge lies in identifying and reaching out to those who face discrimination, building trust and ensuring them access to relevant support services, as well as training and work opportunities to address unconscious bias and opportunities for under-represented and under-privileged groups and collaborate with external organizations to proactively confront racism.
Supporting mental health
Workers with underlying health conditions were already inadequately integrated into the workforce and their prospects have worsened during the pandemic. Social distancing and confinement are likely to have impacted citizens’ physical and mental health. We must take action to destigmatize and actively support mental wellbeing.
Living wage and social protection
As we enter the next phase of the pandemic and its subsequent employment crisis, action on ensuring good jobs with decent wages and adequate social protection is urgently required to mitigate the aggravation of poverty, inequality, and social instability.
Living wage measures
Workers and their families should be able to afford a basic but decent lifestyle that is considered acceptable by society at its current level of economic development, which allows them to live above the poverty level and participate in social and cultural life. It is important to distinguish this living wage from the minimum wage, which is the lowest remuneration that employers can legally pay their workers. Action must be taken to advance the concept of living wage within our own operations as well as along our supply chains. A sequential approach would allow each company to be gradually on-boarded. This first entails scoping towards a harmonised methodology to calculate the living wage level by reviewing and analysing the best practices from existing methodologies; and secondly implementing the necessary measures within our own operations, and then involving our suppliers as well. It is important to note that living wage is a complex topic, and therefore details and technicalities will be addressed by the responsible working group as the work progresses.
Upgrading social protection
The pandemic has revealed the precarious nature of many forms of work, such as gig work, casual work, informal work, and self-employment. All demonstrate weak or non-existent social protections in times of crisis, a challenge we need to address together with governments who are responsible for social protection systems. For these workers, the option to work from home often does not exist, which means workers could find themselves out of work for a long period of time. Adequate protection should be ensured for workers across all types of contracts.
All these actions will help pave the way for a truly inclusive recovery. However, to bring systemic change, businesses must be able to measure the impact of our actions on the well-being of workers and citizens.
Impact Measurement, the key to systemic change
While corporate financial reporting based on internationally recognized accounting standards has become a common practice, the same cannot be said for the non-financial dimensions of performance. Developing a measurement framework and methodology that can be used to assess impact is a key commitment of the B4IG Pledge, and being able to accurately measure a company’s positive social impact is a clear step towards defining and measuring inclusive growth.
As a coalition of major companies operating around the world, we stress the need for global environmental, social and governance (ESG) standards including harmonized metrics and disclosure rules. Governments have a critical role to play in this regard. We will play our part in this effort, especially regarding the social dimension of these indicators, as they are in an earlier stage of development than environmental indicators and are relevant to the B4IG Pledge areas.
However, ESG reporting is only part of the puzzle.
In the face of critical issues like climate change and rising inequalities, responsible businesses must go beyond ESG reporting, which aim essentially at managing and mitigating non-financial risk for the enterprise. Businesses must complement ESG reporting with metrics and standards that assess the outcomes and impact of companies’ activities on well-being and report both negative and positive externalities. Assessing the business impact on inclusive growth is the key to truly inclusive business models.
Impact measurement will pave the way for impact accounting. It will supplement the statement of financial health and performance by reflecting a company’s positive and negative impacts on employees, customers, the environment and society at large. Impact measurement, and its harmonisation through common and accepted metrics, can help create the level playing field that different stakeholders require and need to evaluate and quantify the corporate impact. Such a framework should inspire companies to integrate impact objectives into their strategies, accelerate the shift of investment capital towards investments that promote inclusive growth, and enable governments to fine-tune policies based on the negative and positive impact of corporate activities, products, and services. While B4IG’s contributions remain focused on the Pledge areas and inclusive growth, it recognizes the importance of initiatives such as the G7-OECD-UNDP Framework for SDG-aligned Finance that aims to define a common framework to assess financial performance through the lens of Sustainable Development Goals.
Impact measurement has the potential to align the interests of corporations, investors, and governments. As a coalition committed to fighting inequalities, B4IG actively participates in advancing impact measurement and valuation, in particular for calculating corporate social impact, and supports the most advanced frameworks of impact measurement.
Governments and businesses must cooperate on the development of a common impact measurement approach and metrics to complement the financial indicators of business performance. A joint roadmap should cover key issues such as transparency and disclosure rules, and define the best way to advance towards common metrics, align on a unified methodology and thereafter define a clear roadmap towards impact accounting.
Strengthening Fundamentals
As the economic crisis hits, we must ensure that we keep advancing the fundamentals. We must not lose the progress made over the last decades both in our companies and along our supply chain. We must maintain our efforts, partnering with governments, social partners and other stakeholders.
Human Rights
The unprecedented COVID-19 crisis the world is facing has exacerbated existing inequalities and discrimination. Human rights violations are more prevalent and the most vulnerable individuals in society are suffering the worst impacts of the crisis, reinforcing the essential role of Responsible Business Conduct (RBC) for building trust and setting the foundation for more inclusive business models.
As the respect for human rights is core to our way of doing business, we are already working to advance human rights in our direct operations and in our supply chains, both individually and collectively, through B4IG and other initiatives. We therefore reaffirm our resolve to eliminate child labour and forced labour, and to respect freedom of association. To that end, we intend to further develop and mobilize tools relating to due diligence, to the support towards our suppliers to advance their respect for human rights and to grievance mechanisms.
Due diligence
In line with the OECD Guidelines for MNEs, the OECD Due Diligence Guidance for Responsible Business Conduct and UNGPs , and with the B4IG pledge, members share the objective to put in place robust human rights due diligence systems in order to take preventive measures and mitigate identified risks and impacts including responses to grievances.
As we work to implement our due diligence processes, we welcome the announcement that the European Commission will launch a legislative initiative on mandatory human rights due diligence.
We will use our best efforts to support and communicate transparently about due diligence procedures and practices on human rights, and, where they exist, promote collaboration with lawful collective representatives, such as companies’ worker representatives or trade unions, in relations to the development and implementation of due diligence processes. We will also work to leverage a common assessment platform and ensure transparency for users with advanced technologies and labels. Aligned with each member’s Supplier Code of Conduct and contractual relationships, we will work towards ending commercial relationships if a supplier is unwilling or unable to meet human rights expectations.
Certain B4IG members have already committed to establishing and deploying human rights due diligence systems in their own operations with the aim of reaching 100% coverage by 2025 to address forced labour risks. We will work to leverage this commitment as part of B4IG collective action.
Supporting suppliers to advance their respect for human rights
Members will support suppliers to advance their respect for rights in their own operations. This includes Members’ approach to engaging their direct suppliers on human rights, assessing their performance and including relevant expectations in contractual agreements.
Amongst others, this entails further developing contractual language on human rights expectations in procurement provisions and supplier contract, assessing suppliers based on risk with regards to non-compliance with human rights and taking appropriate action following assessment. Volunteering members will also develop a pilot for collective action, potentially supported by the B4IG incubator.
Grievance mechanism
Members strive to provide effective mechanisms for workers from their operations, and for other affected stakeholders in their supply chains, to raise concerns about human rights impacts relating to company business. Employees may also raise such concerns through lawful collective representatives (unions). Persons making such reports in good faith must be protected from retaliation, threats, or harassment, and their identity held in confidence to the extent possible and as permitted by law. Members will also work to encourage suppliers to develop grievance mechanisms in their own operations.
We recognize the importance of engaging with the OECD National Contact Points for RBC and will explore new and innovative ways of private-public cooperation beyond the B4IG coalition. We will renew leadership commitment to a ‘speak up’ culture. We will work to engage in tripartite dialogue with both employee representatives and government organizations, recognizing the importance of leveraging trade unions as whistle-blowers to advance on human rights. We will identify existing grievance mechanisms with worker representatives and/or trade unions, and where they already exist, look for opportunities to promote these mechanisms.
Inclusive Sourcing
Inclusive Sourcing ensures that workers from vulnerable populations have an equal opportunity to compete in the labour market through the sourcing policies and practices of larger companies. Existing inclusive sourcing initiatives either focus solely on natural raw material sourcing or on the social and solidarity economy in non-raw material categories, such as contract manufacturing, services, facility management, etc. The B4IG coalitions combines both approaches to create a holistic model, addressing both raw material and non-raw material sourcing categories, essentially covering the entire supply chain of a company.
Leveraging the B4IG Inclusive Sourcing Self-Assessment and Toolkit, volunteering member companies will assess their current standing in inclusive sourcing policies, benchmarked against peers, and then engage in pilots to test the impact of inclusive sourcing in specific supply chains, measuring the outputs and outcomes of the program.
B4IG inclusive sourcing programs will incorporate measurements as well as accountability and audibility in company operations to ensure that targets are met. Different categories of vulnerable populations will be clearly and properly defined, relying on official data to understand the needs of a community and respecting legislation around data management.
Financing inclusive growth
The B4IG coalition includes as one of its pillars the Inclusive Growth Financing Forum (IGFF), a locus for interaction between B4IG and the financial sector, to better understand how inclusive growth can be financed. The IGFF is a venue where impact investors focusing on inclusive growth investments can interact with B4IG corporates and provide feedback on financing and non-financing parameters. Under the auspices of OECD, the IGFF is headed by an Advisory Board of inclusive growth financing professionals.
Key findings
The IGFF’s consultations with important actors present in the impact investment space has led to three key findings
Finding 1: The Inclusive Growth ecosystem is under-developed
Many initiatives are underway in both the public and private sectors aimed at promoting inclusive growth. So far, and despite the existence of a growing impact investment sector in advanced economies, relatively limited amounts of financing have been specifically channelled to fund inclusive growth investments. Potential investors have difficulty sourcing inclusive growth investments because of the lack of a common definition of what constitutes inclusive growth, and generally accepted indicators and measurement methodologies. In essence, the financial ecosystem around inclusive growth is not yet mature.
Finding 2: Specific IG actions do not currently scale up to system-wide change
For growth to be inclusive, specific IG initiatives will need to be scaled up to the economy at large. For economy-wide inclusive growth, the entire private sector will need to adapt their core businesses to make them more inclusive. This is not happening because in addition to issues relating to the definition and measurement of inclusive growth, the necessary feedback loops to recognize and reward inclusive growth actions taken by firms, and thus creating a virtuous circle, are not yet in place.
Finding 3: Public and private financing initiatives do not work collaboratively to support inclusive growth actions
Despite the innovativeness of public sector IG initiatives, the absence of significant joint financing with the private sector limits their reach. For their part, private financiers do not have the same access to data or legitimacy to work in the public policy space. This diminishes their impact and reduces the possibility of implementing corporate, investor and government joint actions on inclusive growth. It is urgent to seek collaborative public-private financing arrangements that work across the entire financial sector to increase the impact of IG initiatives.
Actions
Members are conscious of the need to encourage the development of a financial ecosystem which supports investments in inclusive growth, and which lead to system-wide impact. We will remain engaged over the medium term and will work with OECD and other actors on a common definition of inclusive growth, associated with a monitoring and evaluation framework of measurable impact indicators (both ex ante and ex post) at the economy-wide, firm level and investment level.
We will work in coming years on developing the financial ecosystem through the following actions:
- We will continue the IGFF’s analytical work on how best to orient impact investment to inclusive growth, which we will disseminate through various channels.
- We have created an Inclusive Growth Marketplace, where developers of inclusive growth projects can meet with impact investors to seek financing and will hold several marketplace cycles per year.
- We will work on creating Investors for Inclusive Growth, an association of impact investors currently financing or interested in financing inclusive growth in advanced countries.
We will explore with Investors for Inclusive Growth the opportunity of creating one or several Inclusive Growth Financing Initiative(s), where the private and public sectors can come together in joint operations financing inclusive growth.
Acknowledgements
This position paper has been prepared by the Business for Inclusive Growth (B4IG) coalition, in collaboration with the OECD. The following companies have been instrumental in its production, as leaders of the different working groups:
- Sodexo and Schneider Electrics, as lead companies for Working Group 1 on Human Rights.
- Accenture, as lead company for Working Group 2 on Inclusive workplaces, specifically on Diversity & Inclusion, and with Michelin & Unilever for Responsible Restructuring and Capgemini for Bridging the Digital Divide.
- L’Oréal, as lead company for Working Group 3 on Inclusive Value Chains & Ecosystems.
- BASF, as lead company for Working Group 4 on Impact Measurement.
- Danone, as co-chair of the coalition.
The opinions and arguments expressed herein are those of the authors and do not necessarily reflect the official views of the OECD or its member countries.
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Appendix. Inclusive Business Initiatives
Roadmap for an inclusive recovery
The Future of Work
- Preparing for accelerated automation and restructuring
- Accenture’s Inclusive Future of Work initiative targets workers who face the double disadvantage of vulnerability to automation and lack of access to training and transition support
- Michelin ensures restructuring takes place in an inclusive and responsible manner. As a principle, when closing a site, Michelin aims at creating jobs and developing new opportunities for the workforce, to minimize potential negative impact on local communities.
- Unilever’s Future Fit Plan is a methodology that helps people explore the skills they might need to reskill, upskill in line with their purpose and opportunities within or outside the company. This purposeful approach has been found to be very successful in motivating people to commit to lifelong learning.
- Preparing for future growth sectors
- BNP Paribas has introduced different programs to encourage the training and inclusion of young people from disadvantaged areas in “tomorrow’s industries” such as tech, in which women and young people from rural and modest areas are under-represented
- Danone is working with the IUF, the global federation of unions in the food industry, to pioneer an innovative approach called “FutureSkills”. The objective of this joint initiative is to counter upcoming challenges and support Danone employees whose job may be at risk and who will need new skills by offering them the opportunity to be trained and upskilled for the jobs of the future. Throughout their long-term training program, they will remain Danone employees and keep their benefits.
- Johnson & Johnson’s Bridge to Employment initiative partners with nonprofit FHI360 to help young people improve school attendance, enhance academic achievements, and gain awareness of career possibilities in healthcare.
- Pret A Manger’s Coffee Fund addresses the declining youth involvement in coffee farming, by equipping the next generation of farmers with the tools they need to build a sustainable business. The average age of coffee farmers in the company’s network is over 65 years which, now more than ever, in the light of the impact of Covid-19, is a major challenge for the future of the sector. Each year, a group of approximately 65 young people from across Peru enroll in the course, which provides intensive training on smart technologies, improving crop yield and coffee quality, and adaptation to climate change, as well as a post-training support services (grants, loans). The program has direct links with the local cooperative to ensure career opportunities after graduation. The Coffee Fund is now in its 6th year and is having a real and lasting impact on the young people who have participated, with 94% of students having remained in coffee farming.
- Bridging the digital divide
- Microsoft is driving an initiative to help 25 million people worldwide acquire the digital skills needed in a COVID-19 economy. The initiative uses data to identify in-demand jobs and the skills needed to fill them; provides free access to learning paths and content to help people develop the skills these positions require; and delivers low-cost certifications and free job-seeking tools to help people who develop these skills pursue new jobs. In three months since its launch in July 2020, the initiative has reached 10 million learners.
- Capgemini launched in 2019 a Digital Literacy stream of initiatives to impact a maximum number of beneficiaries by imparting foundational digital skills to enable them to take their first steps towards digital autonomy (In 2020 more than 100,000 Digital Literacy beneficiaries were impacted thanks to efforts from our local CSR teams and NGO partners in shifting projects online in the context of the current global crisis). In France Capgemini is partnering with WeTechCare and Emmaus Connect engaging the expertise of the employees by pro bono or volunteering actions to support these key players in the mission of bridging the digital divide. Capgemini launched also a Digital Inclusion module with a UK NGO partner, Digital Unite to help our colleagues understand Digital Inclusion and pledge to become Digital Champions being skilled and equipped as “helpers” to support the digitally excluded.
- Ricoh has supported small and medium companies who weren’t equipped with the necessary digital tools to work from home since the start of 2020. In Japan, Ricoh provided a two-month free trial period of its remote working solutions and supported over 10,000 small and medium business to make the digital transition seamless. In Europe, Ricoh launched “SCALA” a 6- to 9-month talent development programme that will develop and up-skill delegates, providing specialist technical skills and expertise, along with an industry-recognised accreditation, to subsequently support the growing areas of Ricoh’s business.
- Henkel’s digital upskilling and digital working initiatives have been adapted and accelerated in response to the COVID-19 crisis. Confinements have raised the importance of effective remote and flexible working, as well as digital learning programmes, and digital tools to ensure full business continuity independent from location.
- Accenture provides courses to help unemployed workers develop digital skills, as well as providing hardware and connectivity to households lacking Internet access during confinement.
- GINgroup’s “Digital Inclusion” programme in Mexico aims to collaborate in the development of open, inclusive, integrated and intelligent business ecosystems that promote electronic commerce and the digital economy in Mexico, through projects and programmes of dissemination, training and networking.
Diversity & Inclusion
- Strengthening commitment to a culture of equity and inclusion
- Credit Agricole SA believes that, even if reducing social inequality is first and foremost a political issue and investors cannot replace governments, by investing in stocks from listed companies, we can play a part in contributing to the reduction of inequalities. Indeed, we believe all the major listed companies can widen or narrow social inequalities through their policies. And we, as investors, can influence their practices through disinvestment on one hand and dialogue on the other one. AMUNDI – through its subsidiary, CPR AM, has just launched a Social Fund called CPR Invest Social Impact, the world’s first global equity fund with a portfolio core fu