The World Benchmarking Alliance’s Social Indicators: An Opportunity To Provide Feedback

The purpose of this post is to ask for your help on an important project. The World Benchmarking Alliance (WBA) is soliciting input on their “Social transformation Draft methodology” and proposed metrics. Feedback is due by September 7, 2020. More on this after some quick background for those who do not know about—but everyone who cares about a sustainable world should—the WBA.

Earlier this year I wrote about the important work of the World Benchmarking Alliance (WBA). I summarized how the WBA aggregated the 17 Sustainable Development Goals (SDGs) into seven systems that need to be transformed: social, food and agriculture, decarbonization and energy, circular, digital, urban, and financial as shown in Figure 1 below. It then identified the most relevant industries for each system which can affect both positively and negatively what needs to be done for the 2030 goals of the SDGs to be achieved. It then identified 2,000 “keystone” companies (SDG2000) in 74 countries with $43 trillion in revenues that will play a critical role in whether the SDGs are accomplished or not.

This influence is often most keenly felt among the most vulnerable people in society: from the women working in a Bangladeshi garment factory to a mineworker in the DRC or those trying to make a living in the gig-economy in the UK. Unfortunately, this influence is often negative;  these are usually the people who are hidden. In today’s crisis their plight has been revealed through the ripple effect of poor governance to even understand the entire value chain or perceive it beyond a functional supply chain of supply and demand to be turned on and off like a tap. COVID-19 means there is more focus on people and human rights now and we are seeing the companies that continue to look after their people – be it in their operations or supply chains – will lead the global recovery from an employee engagement and brand perspective.

The WBA is now in the process of rating all of these companies to produce benchmarks that will be freely available in the public domain. Investors and other stakeholders will be able to use these benchmarks in their engagement with these companies to encourage and help them improve their performance. Because companies in an industry will be rank-ordered from best to worst, this will create an incentive for companies to improve their performance against their competitors. Those at the top won’t remain there unless they are constantly improving. The theory of change behind the WBA is to create a virtuous circle of improvement.

Figure 1: The Seven Systems

This is increasingly no longer acceptable to society. The “2020 Edelman Trust Barometer” reveals that 56 percent of respondents think capitalism as it is today does more harm than good, 83 percent of employees fear losing their job, and a third of global consumers, including 27 percent in the US have already punished brands they think have misbehaved in the crisis. Sixty-nine percent of people said they would lose trust in a brand if they put profits above people. The message is put people first. Gerbrand Haverkamp, Executive Director of the WBA points out that ““The coronavirus pandemic has underscored the need for strong social protections for workers. Now more than ever, companies should be held accountable for their role in society and encouraged to play their part in the needed transformations.”

As part of their work, the WBA will apply a social lens to every transformation assessment in order to better understand whether the transition from the current to the desired system is a “just transition” that manages social risk and leaves no one behind while creating a better future. “Just as the SDGs place people first, WBA’s social transformation aims to put people at the heart of change so that no one is left behind.”  While all companies should support human development through contributing to the 2030 Agenda, they must do it in a responsible way that respects the rights of workers, consumers, and the wider community. It would be wrong to give credit to a company that has “green credentials” while it systematically avoids taxes or pays its workers a poverty wage.  As such, the WBA will assess every one of the SDG2,000 on a core set of social indicators to see whether they meet minimum societal expectations for responsible business conduct. 

The draft methodology contains 15 proposed social indicators as shown in Figure 2 below. If companies do not meet them, it will have a material impact on their assessment in subsequent SDG benchmarks. This approach is vital to avoid SDG-washing and to ensure people are at the heart of all SDG transformations. Whether there is a green-recovery, a push to build back better, build forward better, or even a return to life pre-Covid-19, the minimum expectations on companies to act responsibly will still need to be met.  

Figure 2: The 15 Proposed Social Indicator Topics

If all companies were already meeting the minimum expectations, the world would be in a very different place – one where businesses and their employees were far more resilient in the face of a crisis. But as I wrote about earlier this year, a recent report by the Corporate Human Rights Benchmark (CHRB), now part of the WBA, shows an abysmal level of performance on human rights by 200 leading companies. We must move away from business models that emphasize short-term financial results that ignore environmental and social externalities while focusing on infinite growth – which has in turn led to unsustainable development that was rewarded by the market and has imperilled both people and planet. A key element of this is new metrics for evaluating a company’s performance that matter to investors, stakeholders, and companies themselves. 

  The core social topics and indicators are written in ink, not stone, and while they build on pre-existing international norms, standards and frameworks, the WBA wants to improve the model by consulting with stakeholders over the next three months. Dan Neale, who leads WBA’s work on Social Transformation, said they’re looking for feedback ‘from all parties and on all parts. We want to hear from civil society and business associations, workers and unions, communities and consumers, all across the world. And we want feedback on our overall approach, the scope of the core topics and the depth of the draft indicators. How can we make any of it better?”

Here are the consultation questions:

A1 Does the proposed model of separating minimum expectations from the transformation-specific methodologies make sense as a concept? 

A2 With regards to framing for a global audience, what language works best in terms of 'basic’, ‘core’ and ‘minimum’ expectations? 

A3 Does the focus on social, to the exclusion of environmental or governance basic expectations, detract from the model, or does it help to retain focus on ‘social’? 

A4 What more could we aspire to in terms of ‘social transformations’ that the world’s most influential companies could contribute to? 

Please respond to their request for input by September 7, 2020 by writing to info.social@worldbenchmarkingalliance.org.

Thank you for your help and support.