Setting a long-term social ambition

Speakers: Marije Klomp and Shirly Justice (MVO Nederland)

If we look at business and human rights we usually see companies as part of the problem. How can we change that? How can companies be part of the solution instead of only part of the problem? MVO Nederland developed Ambition 2020 for this.

What makes a good ambition for 2020:

  1. Look at your impact: where does your company have the largest impact?
  2. Ask yourself critical questions: is your ambition high enough? Is it inspiring? Is it feasible and realistic?
  3. Be future oriented: formulate an ambition for the long run. Start in 2020, where would you want to be then?
  4. Formulate your ambition as concrete and measurable as possible. This is where your KPIs come in.
  5. Let yourself be inspired by the ambition of others.
  6. Make your ambition clear and understandable: ensure that the header of your ambition is immediately clear to the reader.

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Reporting on human rights

Speakers: David Vermijs (Shift) and Marcela Manubens (Unilever)

Though companies found the guiding principles useful they needed a reporting framework to transparently report against human rights targets. After the launch of the UNGP Reporting Framework earlier this year, it has been publicly used by companies to guide them with the implementation of the UNGP. Increasingly the Framework is creating momentum for human rights.

Reporting on UNGP enables companies to report on human rights in a meaningful way that meets stakeholder needs; fits seamlessly both with broader reporting frameworks and industry/issue-specific initiatives; is feasible for small and large companies.

Companies should focus on severity and salience. When you start reporting on issues: what are your salient issues? Define those and explain how you got to these? It is working as a risk management tool for companies. It can be really helpful guiding engagement and identify risks.

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Case example (Unilever)
Unilever is the first to publish a full human rights report in accordance with the UNGP Reporting Framework. Unilever wanted to expand its social ambition. “We knew we needed to address human rights and that we needed a holistic approach.”

  • “We are focusing so much on doing no wrong, but what does doing good look like?”
  • “If you don’t want child labour, what do you want?”
  • “Transparency is what can make us engage and move forward.”
  • “The process of the Reporting Framework is not easy, significant incentive and motivation are needed to make it a success.”

Integrating human rights in business operations

Speakers: Nelleke van der Vleuten (ICCO Cooperation), Edwin Koster (Social Accountability International), and Brechtje Spoorenberg (KPN)

The role of civil society organisations (CSOs) in the UNGP framework is not clearly defined. ICCO believes that capable CSOs have an “advocate” role to play in the framework, helping businesses and local communities to build mutually beneficial relationships. How does ICCO ‘advocate’? (1) Agenda setting; (2) Capacity building; and (3) Supporting implementation of UNGP among SMEs.

Three secrets of success for businesses:

  • Be aware of the diversity of the community (e.g. do not only talk to the village leader, but also to women or young people)
  • Engagement = process (not a ‘tick-in-the-box’ exercise by external consultants)
  • Organise it! (work with capable NGOs that can act as mediators and help you improve efficiency and effectiveness)

SAI presented its view on effective auditing and engagement, whereby the traditional Code Focus is supplemented with a Process Approach. A Code Focus is characterized by the fact that it is audit-driven, with yes or no self-assessments. It often becomes a check boxing exercise; also, suppliers tend to want to adopt a quick find and fix approach. A Process Focus, on the other hand, is driven by technical assistance. It encourages dialogue with suppliers to see where improvement can be made. The process is shaped and adjusted based on their input. Because the system changes, the company becomes more compliant.

KPN explained how it has integrated human rights into its business and how it has been pressuring its suppliers to adopt human rights standards as well and ask their suppliers to do the same. KPN conducts supplier audits independently and in cooperation with Joint Audit Cooperation (a cooperation of telecom companies). The latter benefits suppliers as well as telecom operators. KPN’s Procurement Ambition 2015 is to move from control to dialogue, commitment and follow up on corrective actions.

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Measuring social impact

Speakers: Karen Maas (Erasmus University) and Linda Midgley (PwC)

There is a lot of experience on measuring impact. However, the practice of measuring impact can still be considerably improved. In many cases only easy to measure indicators are picked, and no attention is given to possible negative effects. Today, many guidelines and methods are available for measuring impact. Despite the wide variety of methods common steps for the impact investing process can be identified. The following questions can be asked:

  • Why do your evaluate?
  • Which human rights do you evaluate?
  • On what do you want to have effect (e.g. geography, beneficiaries, stakeholders)?
  • How will you evaluate the human rights issues?
  • How will the results be used?

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A human rights due diligence consists of four steps: adopt a human rights policy, conduct a human rights impact assessment (partly consists of measurement), manage the human rights impacts identified and report on the due diligence progress. For measuring and managing impact an important first step is to set the scope and boundary, to map the value chain and to identify impact indicators. The second step is the actual execution of impact measurement and includes collecting the human rights data, filling data gaps, reporting, and determining improvements. Prioritizing is an important factor in measuring and managing human rights impacts well.

Karen Maas disproved the following ‘impact myths’. Impact evaluations are expensive, take a lot of time, often lead to disappointing results, are only useful to satisfy donators and funders, are not capable to measure all kind of projects like lobbying or research, and Randomized Control Trails are unethical.

Social impact assessment

Speakers: Roland Waardenburg (Sustainability Consortium), Gustaaf Haan (Questionmark), and Michel Scholte and Esmee Bergman (True Price)

The Sustainability Consortium works together with many large companies, among which Ahold. At Ahold, the Sustainability Consortium focused on the sustainability of its Business to Business units. Companies can approach their supply chain in different ways. The Sustainability Consortium looks at the supply chain not as a real chain, but as a pyramid. The ground layers of the pyramid are about decreasing the negative business impact where it is largest. At the top of the pyramid you find active involvement and going beyond legislation and compliance towards doing good.

Questionmark provides an app for consumers with a large database of food and beverage products that are for sale in (Dutch) supermarkets. With the app you can compare products of different brands on their impact/performance in the areas of health, environment, human rights and animal welfare. In the future Questionmark wants to go beyond the food and beverages industry.

True Price is a social enterprise that measures social and environmental impact and advises on improving international business conduct. True Price has developed a 4-dimensional P&L framework which measures corporate profits and losses on four types of capital: financial, natural, social and human capital. They have developed this approach together with AkzoNobel, which has used the information for its 2014 annual report.

With the 4D P&L True Price measures, weighs, and monetizes the company’s supply chain of specific products both upstream and downstream. The results lead to an overview of plusses and minuses per capital, thus including both negative and positive impacts and hidden costs. This shows companies on which impacts they should focus to have the greatest impact both for themselves and for their stakeholders. Additionally, the 4D P&L shows the interrelationships between the four types of capital.

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Investing for social impact

Speakers: Lara Muller (Corio) and Sytske Groenewald (Oxfam Novib Impact Investing)

Investing in real estate can have a large social impact on the surrounding neighborhood. At Corio, the need to be more aware of and measure the impact of its investments is recognized. In a case study with a shopping mall in the Sevilla area, the positive social impact identified related to employment, self-esteem and improved educational levels (three E’s). The research was undertaken in cooperation with the Erasmus University, and thus had a strong academic lay out. Besides those living in the neighbourhood of the shopping mall, a control group was appointed. Comparing the two groups showed that the positive impacts identified could be actually correlated with the investment in the shopping mall. This case study has opened up a discussion at Corio on how to integrate a Social Return of Investment in relation to the traditional Return of Investment approach, without compromising on the financial return targets.

At Oxfam Novib Impact Investing, whether or not to invest in a company or project is determined on different criteria than at other investors. Oxfam Novib’s criteria for investing in SMEs are much related to environmental, social and governance performance, due diligence process, and the opportunity to create positive outcomes for the entire community. When the decision to invest is made, certain requirements with regard to ESG are included in the loan agreement. Oxfam Novib tracks its the performance of its investments closely. They monitor social impact rather than financial return.

Shared Value investing is not only good for society, but also for business: to increase market share, improve company reputation, and save costs in the long term (due to positive spill-over effects of social policies).

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