The Role Of Industry Associations And Civil Partnerships .
The Role of Industry Associationsand Civil Partnerships inCorporate ResponsibilityPreliminary Findings
T H E R O L E O F I N D U S T R Y A S S O C I AT I O N S A N D C I V I L PA R T N E R S H I P SI N CO R P O R AT E R E S P O N S I B I L I T Y – P R E L I M I N A R Y F I N D I N G SContents03. Introduction –The Purpose of This Report03. Executive Summary06. The Growth of Partnerships and IndustryInitiatives Working on Sustainability30. Appendix B –Business Leadership in Society DatabaseAnalysis: Industry Initiatives31. Introduction34. The Governance of Industry Initiatives07. Key Issues Addressed35. Lessons Learned: Factors That Drive Success10. Achieving Impact36. Case Studies – Industry Associations12. Trends13. Characteristics of Effective Partnershipsand Industry Initiatives46. References48. About the Authors15. The Business Leadership in SocietyDatabase Series16. Appendix A –Business Leadership in Society DatabaseAnalysis: Multi-Stakeholder Partnerships17. Introduction18. The Governance of Partnerships21. Lessons Learned: Factors That Drive Success22. Case Studies - Partnerships02www.highmeadowsinstitute.org
T H E R O L E O F I N D U S T R Y A S S O C I AT I O N S A N D C I V I L PA R T N E R S H I P SI N CO R P O R AT E R E S P O N S I B I L I T Y – P R E L I M I N A R Y F I N D I N G SIntroduction –The Purpose of This ReportThis paper explores the role of industry and multistakeholder initiatives in supporting businessleadership and responsibility in our global economy.The analysis in this report is drawn from over 200initiatives High Meadows Institute has identified thatcollectively are an increasingly important contributorin setting a framework for corporate responsibilityand leadership in the 21st century.While the number of these “civil” and industry-levelcorporate social responsibility and sustainabilitybusiness initiatives is rapidly growing, there iscurrently no central resource for tracking theseinitiatives or understanding their relative impact andeffectiveness. To help address this challenge, HMIhas created a publicly accessible database of leadingPartnership and Industry Initiatives. The database isdesigned to be a comprehensive platform for trackingand assessing leading industry and multi-stakeholderinitiatives working on promoting and supportingbusiness leadership and responsibility in society. Theobjectives for this platform and our research are to: Provide a resource for academics, investors, themedia and business leaders to gain perspective andinsight into the current state of play, trends, impactand best practices in the evolution of businessleadership and responsibility initiatives Provide a resource for businesses and businessleaders looking for opportunities to collaborate with03others to increase their impact in terms of responsiblebusiness practices and leadership in society Provide a platform to identify which companies areparticipating in leading initiatives and which issuesand industry sectors are most and least activeThe report that follows provides a summary of initialfindings from our research and areas of impact we willbe exploring further. It also includes a more in-depthexploration of the two categories of initiatives includedin the database and eight case studies demonstrating thescale and range of initiatives underway. Our objectivewas to track the rise of these initiatives and pose thefollowing questions: In what sectors are these initiativesmost active? What has been the direct impact of thesecoalitions? How are these initiatives governed and arethese governance models optimal? What constitutesbest practice in the field? What kinds of broader systemschange can we see as a result of these initiatives?We welcome your feedback to our findings andsuggestions of other initiatives we should add to thedatabase and research themes we should explore. Wealso want to thank and recognize the contributionsof Deborah Leipziger, Sakis Kotsantonis and ChloeCardinaux in building the database and the analysis inthis report.Chris PinneyPresident & CEO, High Meadows Institutewww.highmeadowsinstitute.org
T H E R O L E O F I N D U S T R Y A S S O C I AT I O N S A N D C I V I L PA R T N E R S H I P SI N CO R P O R AT E R E S P O N S I B I L I T Y – P R E L I M I N A R Y F I N D I N G SExecutive SummaryOver the last 50 years, globalization has dramaticallyincreased the influence of business in society. Seventyof the top 100 economies in the world are now globalcompanies, with a reach and power that exceedsmany nation states. As the influence of businesson society has grown, so have public demands andexpectations for firms to take greater responsibilityfor their impact on society and provide resourcesand leadership, working with governments and otherstakeholders to address systemic social challenges.In response to this environment and in the absenceof a clear global regulatory framework for corporatesocial responsibility, global companies are enteringinto an increasing number and variety of voluntary“soft law” agreements and social responsibilityinitiatives to manage stakeholder expectations andsafeguard their license to operate. These “privateand civil” initiatives engage the private sector withnon-government and market-based regulatoryorganizations to develop codes of conduct andstandards for corporate social responsibility, as well asto involve business in helping address systemic socialchallenges, from climate change to income inequality.The variety and number of these kind of initiatives hasgrown rapidly in the last few decades. Today, there arefew large global firms that are not engaged at somelevel in one or more of these kinds of “self-regulatory”and social responsibility initiatives. The range ofinitiatives currently underway includes: Industry-led CSR/Sustainability standards - Theseare often developed by leaders in the industry as aresponse to an industry-wide crisis in credibility.One of the most sophisticated examples of this isthe Responsible Care initiative,1 developed by thechemical industry in 1985 after several disastrouschemical spills. Responsible Care now requiresindependent auditing of member companies tocertify their compliance with RC standards, andmembership in Responsible Care is a prerequisitefor membership in the American ChemistryCouncil. More recently, we have seen the growth ofsocial responsibility standards for financial markets,supported by leading institutional investors, such asthe Investment Stewardship Group’s Framework forU.S. Stewardship and Governance. Multi-stakeholder-led CSR/Sustainability standardsfor industries - These “voluntary” codes of conductand standards target specific industries and areusually negotiated between business and a varietyof external stakeholders that may or may notinclude governments. The Forest StewardshipCouncil2 and the Apparel Industry PartnershipAgreement are examples of these types of multistakeholder-led industry-level standards initiatives.More recently, these have begun to target investorsas well as companies, with initiatives such as thePrinciples for Responsible Investment and theSustainability Accounting Standards Board3 settingstandards for corporate reporting to investors.1. See case study in Appendix B: Analysis: Industry Initiatives 2.Ibid 3. See case study in Appendix A: Analysis: Multi Stakeholder Partnerships04www.highmeadowsinstitute.org
T H E R O L E O F I N D U S T R Y A S S O C I AT I O N S A N D C I V I L PA R T N E R S H I P SI N CO R P O R AT E R E S P O N S I B I L I T Y – P R E L I M I N A R Y F I N D I N G S Business and Multi-stakeholder-led socialresponsibility initiatives – These initiatives engagebusiness as an active or leading partner workingwith other stakeholders to address critical socialchallenges. These include the World BusinessCouncil for Sustainable Development4, The WorldEconomic Forum and Climate Action 100 .As David Vogel, the former Professor of BusinessEthics at the Haas School of Business and leadingcommentator on the emerging civil regulation field,observes, “On balance, in their effectiveness as wellas in their limitations, global civil regulations havehad an impact roughly comparable to that of manyinternational treaties, which also make extensive useof ‘soft’ law.” In sum, civil regulations and initiativeshave partially reduced the governance deficits thataffect many global firms and markets. They are nota panacea, but neither are they an unimportantcomponent of global governance. Moreover, manyinitiatives have been established relatively recently,which means their impact and effectiveness couldincrease, especially as some codes become morestringent, comprehensive and better enforced.4. See case study in Appendix A: Analysis: Multi Stakeholder Partnerships05www.highmeadowsinstitute.org
THE ROLE OF INDUSTRY ASSOCIATIONS AND CIVIL PARTNERSHIPSIN CORPORATE RESPONSIBILITY – PRELIMINAR Y FINDINGSThe Growth of Partnerships and IndustryInitiatives Working on rumnsConsumerstaples0CoOver the past three decades, Partnerships andIndustry Initiatives that promote social andenvironmental goals have become commonplacein most industry sectors. These coalitions inturn create new networks and collaborationsthat have led to action at many levels: sectoral,national, regional and global. Figure 1 one belowshows data that we have collected for over 200leading initiatives. The majority we identified arewithin the consumer discretionary and consumerstaples sectors. For example, Bonsucro promotesthe production of sustainable sugar cane and theInternational Tourism Partnership encouragesenvironmental and social responsibility within thehotel industry.GICS SectorNumber of initiativesPercentageConsumer staples3721%Consumer als1911%Health care169%Industrials106%Communication services85%Utilities74%Real estate53%Information technology32%Figure 1. Number of initiatives per GICS sector (includes initiatives with a specifiedGICS sector only)06www.highmeadowsinstitute.org
T H E R O L E O F I N D U S T R Y A S S O C I AT I O N S A N D C I V I L PA R T N E R S H I P SI N CO R P O R AT E R E S P O N S I B I L I T Y – P R E L I M I N A R Y F I N D I N G SKey Issues AddressedFigure 2 below provides a breakdown of differentEnvironmental and Social issues and the number ofinitiatives that are actively trying to address theseissues. This analysis clearly shows issues that haveattracted “overcrowding” of initiatives and issues thathave received less attention.20Count151050AirCCGCDHBEEEMBELPh Pro Pro SeSu SyWa WaslpysiQu usin usin omp usto usto ata S colog mplo mplo nerg HG E uma abor anagcal duct duct ling P ply C temi ste & ste &ynali ess ess eti me memPeyyeityIm De Qu rac ha c Ri Ha WaEth Mo tive r Pr r W curit cal Im ee E ee H Man issio Righ racti menzipa sig alissics del Be iva elfa ypa ngag ealt agem ns ts & ces t ofcts n & ty & tices n Ma k Ma ardo tewarectsRe hav cytheCoem h &ofenLifSa & Pr nage nag us M tersiliimtySoCteLefearont,eglim cymuenedu me me ater Manal &ceDiv fetyate cle tynitnctntial ageMayRLa tersResM mChabeguelaityan entng entThemeSASB DimensionEnvironment07General Issue CategoryNumber of initiativesGHG Emissions64Air Quality20Energy Management43Water & Wastewater Management32Waste & Hazardous Materials Management34Ecological Impacts83www.highmeadowsinstitute.org
T H E R O L E O F I N D U S T R Y A S S O C I AT I O N S A N D C I V I L PA R T N E R S H I P SI N CO R P O R AT E R E S P O N S I B I L I T Y – P R E L I M I N A R Y F I N D I N G SSASB DimensionSocial CapitalHuman capitalBusiness Model & InnovationLeadership & GovernanceGeneral Issue CategoryNumber of initiativesHuman Rights & Community Relations82Customer Privacy2Data Security5Access & Affordability55Product Quality & Safety15Customer Welfare16Selling Practices & Product Labeling12Labor Practices48Employee Health & Safety16Employee Engagement, Diversity & Inclusion13Product Design & Lifecycle Management16Business Model Resilience14Supply Chain Management61Materials Sourcing & Efficiency25Physical Impacts of Climate Change35Business Ethics32Competitive Behavior6Management of the Legal & Regulatory Environment21Critical Incident Risk Management0Systemic Risk Management37Figure 2. Number of initiatives per ESG theme08www.highmeadowsinstitute.org
T H E R O L E O F I N D U S T R Y A S S O C I AT I O N S A N D C I V I L PA R T N E R S H I P SI N CO R P O R AT E R E S P O N S I B I L I T Y – P R E L I M I N A R Y F I N D I N G SFigure 3 below shows the cumulative number ofinitiatives established since 2000 across the 5 SASBdimensions. We are currently analyzing major eventsthat might have contributed to the increase of thenumber of initiatives across certain categories. Forexample, 2010 was the first time that climate changeor climate-related issues occupied the top five spots ofmost likely global risks at the WEF in 014EnvironmentSocial CapitalHuman CapitalBusiness Model & Innovation20162018Figure 3. Cumulative number of initiatives per SASB Dimension 2000-201809CountLeadership & Governancewww.highmeadowsinstitute.org
T H E R O L E O F I N D U S T R Y A S S O C I AT I O N S A N D C I V I L PA R T N E R S H I P SI N CO R P O R AT E R E S P O N S I B I L I T Y – P R E L I M I N A R Y F I N D I N G SAchieving ImpactIn the case studies presented in Appendix A and B,we profile a broad range of initiatives underway.Preliminary analysis of these has identified a rangeof factors that contribute to the ability of theseinitiatives to achieve impact. These can include:Providing a safe space for conversationbetween diverse stakeholdersPartnerships such as the Ethical Trading Initiative,for example, include trade unions, companies, civilsociety, governments and academics. The UN GlobalCompact is another partnership that brings togetherdiverse stakeholders during forums to communicatearound implementing sustainability principles andtaking steps that advance societal goals.Piloting new approaches to addressingsustainability challengesMany of these Partnerships have created blueprints foraction that enhance environmental efforts, create socialvalue, lead to new modes of governance and impactpolicy through legislation and new types of systemsfor labeling and certification The Forest StewardshipCouncil, for example, has created a publicly recognizedlabeling system for products made from trees, includingpaper, construction and clothing. Similarly, the MarineStewardship Council developed the MSC label tosafeguard seafood supplies for the future and protectthe ocean. In the financial industry, the Principlesfor Responsible Investments created “a blueprint forresponsible investment” and brings together investorsto address unsustainable aspects of markets.Embedding sustainability intobusiness operationsPartnerships and Industry Initiatives often definestrategic visions and road maps for action by creatingframeworks, guidance and tools. These tools canbuild capacity at many levels, from managers andsuppliers to workers and auditors. For example, theWorld Business Council for Sustainable Development5has developed several standards and resources toaccelerate the transition towards a sustainable world.SASB6 and GRI both promote sustainability reportingand provide guidance to companies.5. See case study in Appendix A: Analysis: Multi Stakeholder Partnerships 6. See case study in Appendix A: Analysis: Multi Stakeholder Partnerships10www.highmeadowsinstitute.org
T H E R O L E O F I N D U S T R Y A S S O C I AT I O N S A N D C I V I L PA R T N E R S H I P SI N CO R P O R AT E R E S P O N S I B I L I T Y – P R E L I M I N A R Y F I N D I N G SRaising awarenessThese initiatives often come together in coalitionsthat can produce empirical evidence, researchand indices to demonstrate the business as well associetal benefit case for change. By working withsenior executives, these Partnerships and IndustryInitiatives can raise awareness throughout the sector.Responsible Care and the UN Global Compact, forexample, both require a CEO commitment. ClimateAction 100 is one of the leading initiatives raisingawareness about climate change.Scaling good practiceBy leveraging private resources, coalitions can catalyzeself-regulation by companies and the sector. Theycan build the capacity of a sector to promote nationbuilding, influence policy makers and leverageinvestment. Responsible Care,7 for example, is goingbeyond legislative and regulatory compliance forthe chemical industry by enacting various voluntaryprinciples. Better Cotton is another initiativepromoting good practices and improvements to makecotton production better for the sector’s future but alsofor the environment and society.7. See case study in Appendix B: Analysis: Industry Initiatives11www.highmeadowsinstitute.org
T H E R O L E O F I N D U S T R Y A S S O C I AT I O N S A N D C I V I L PA R T N E R S H I P SI N CO R P O R AT E R E S P O N S I B I L I T Y – P R E L I M I N A R Y F I N D I N G STrendsThe number of Industry Initiatives inemerging economies is growingIndustry Initiatives are emerging in Brazil, Chile andHong Kong to address national considerations andcreate national sector frameworks. Likewise, Asiancompanies are becoming more involved in IndustryInitiatives, including the Responsible Business Alliance.9Adherence to ISEAL Credibility Standardsis growingThis section explores some of the key trends in the field:The role of governments has evolvedIndustry Initiatives were often developed in responseto a governance gap left by governments who havefailed to address social and environmental issues. Overthe past decade, governments and intergovernmentalorganizations themselves have now become active“stakeholders” in many initiatives and are the secondmost involved leading stakeholders in partnershipsin our database. According to Karin Kreider,the Executive Director of ISEAL, “increasingly,governments sees a role and want to be relevant.”8 Itmay be that the UN Sustainable Development Goalshave given governments a common framework withwhich to engage the private sector in new ways.ISEAL is a membership association of sustainabilitystandards systems. There is an increase in thenumber of initiatives becoming ISEAL membersand therefore following ISEAL standards. Accordingto Karin Kreider, “there are no best practices intransparency, just better practice.”10Initiatives are integrating theSustainable Development Goals (SDGs)into their frameworksMore industry initiatives are using the SDGs as partof their frameworks.11 The Roundtable on SustainablePalm Oil and the World Business Council forSustainable Development are examples of the manyinitiatives addressing the SDGs.8. Interview with Karin Kreider, December 17, 2019 9. See case study in Appendix B: Analysis: Industry Initiatives 10. Ibid.11. Draft Paper, The Role of Business in Society, p 2312www.highmeadowsinstitute.org
T H E R O L E O F I N D U S T R Y A S S O C I AT I O N S A N D C I V I L PA R T N E R S H I P SI N CO R P O R AT E R E S P O N S I B I L I T Y – P R E L I M I N A R Y F I N D I N G SCharacteristics of Effective Partnershipsand Industry InitiativesThe following characteristics distinguish the mostsuccessful Partnerships and Industry Initiatives in termsof effectiveness, impact, legitimacy and credibility:issues impacting indigenous peoples. The Committeeis made up of indigenous peoples from a wide range ofcountries, including Ecuador and Tanzania.Entry points for stakeholders: The most effectiveinitiatives are designed to allow for stakeholder input.There are several access points for stakeholders indecision-making. These entry points include:Translation into major languages: Many of theinitiativ
The Governance of Partnerships 21. Lessons Learned: Factors That Drive Success . exploration of the two categories of initiatives included . national, regional and global. Figure 1 one below shows data that we have collected for over 200 leading initiatives. The majority we identified are
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Le genou de Lucy. Odile Jacob. 1999. Coppens Y. Pré-textes. L’homme préhistorique en morceaux. Eds Odile Jacob. 2011. Costentin J., Delaveau P. Café, thé, chocolat, les bons effets sur le cerveau et pour le corps. Editions Odile Jacob. 2010. Crawford M., Marsh D. The driving force : food in human evolution and the future.
Le genou de Lucy. Odile Jacob. 1999. Coppens Y. Pré-textes. L’homme préhistorique en morceaux. Eds Odile Jacob. 2011. Costentin J., Delaveau P. Café, thé, chocolat, les bons effets sur le cerveau et pour le corps. Editions Odile Jacob. 2010. 3 Crawford M., Marsh D. The driving force : food in human evolution and the future.
