Sustainable Development

“You cannot have a healthy business in an unhealthy world,” said Pier Luigi Sigismondi, Chief Supply Chain Officer at Unilever, to the Business Fights Poverty organization. As the world’s third-largest consumer goods company, Unilever acknowledges sustainable development helps everyone.

The company acknowledged the failure to address the impact of multinational businesses on human rights has serious consequences not just for people at the bottom of the pyramid but for businesses themselves. That is why the company pursues a program of sustainable development that aligns business interests with human rights and sustainability agendas.

Unilever is just one of many companies that follow the UN Guiding Principles on Business and Human Rights (UNGPs), which urged companies to increase their efforts to respect universally recognized human rights “throughout their operations, value chains and business relationships.”

There are many reasons why more and more businesses are implementing policies and internal reform mechanisms responsive to the UNGPs.

For one, there is external pressure to do so: the publication of the UNGPs has coincided with a broad trend of investors, business partners and governments more frequently confronting companies about their human rights impacts. Companies whose activities are related to chronic poverty or tragedies such as collapsed factories are at risk of their reputation suffering.

For RWE, a German electric utility company, harm to their reputation as the primary impetus behind a rigorous program of internal assessment and reform, along with EU regulatory threats and public pressure in the form of a media campaign. RWE went on to lead other companies in addressing human rights issues in the global coal supply chain. Michelin underwent a similar transformation when civil society organizations brought the tire manufacturer to court for unfair practices at a facility it was constructing in India.

When it comes to environmental and human rights impacts, more than reputation is at stake for global companies. As Sigismondi said, there are cost benefits to reducing waste and energy use while there are commercial and operational costs for conflict, poverty and other issues that disrupt markets and supply chains. Implementing policies geared toward achieving SDGs not only makes companies look good, but it also ensures they will be able to securely reach customers around the world for many years to come.

Furthermore, sustainable development helps businesses adapt to changing economies and demographics. In many African countries with developing middle classes, rapid urbanization and greater integration with the world economy, there is an increasing need for engagement and collaboration with workers, business people and investors who can integrate production systems and build supply chains locally. Addressing the impact of human rights supports such an expansion.

Unilever’s success stands as proof of the benefits of aligning business interests with human rights and sustainability agendas. Purifying the agricultural value chain in Kenya led to increased yields and incomes for small farmers and increased supply chain security for the company. Working with retailers in many countries to raise incomes and living standards has enabled the company to broaden its consumer base into remote areas.

Sustainable development helps everyone. While it protects the rights of vulnerable people in impoverished areas around the world, it also provides security and opportunity for companies trying to adapt to a globalized economy.

Joe D’Amore

Sources: Business Fights Poverty 1, Business Fights Poverty 2, WBCSD 1, WBCSD 2
Photo: Green Living