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Keynote Listener: Theresa Lankes

NGO Power as a Key Driver for Fair Fashion A corporate lawyer’s perspective

by Theresa Lankes, Keynote Listener (Solution Stage: NGO Power and Fair Fashion) at the 8thInternational Conference on Sustainability & Responsibility in Cologne

What is the greatest mystery of sustainability? Although we know what is right, we do not adjust our behaviour accordingly. We all know that fair fashion saves lives, but it has yet to reach its tipping point into mainstream.

#8ICSR Solution Stage: NGO Power and Fair Fashion

Kalpona Akter, CEO of the Bangladesh Center for Worker Solidarity, and Khin Nilar Soe, Vice General Secretary of the Industrial Workers Federation of Myanmar, shared their experiences as textile workers. Since the collapse of the Rana Plaza factory building in Bangladesh killed more than 1130 textile workers, dehumanising working conditions in Asian textile factories form part of collective knowledge in Western societies.

If consumers in the Global North know about this, why don’t they buy more fair and organic clothes? Zara Berberyan has dedicated her Ph.D. thesis at Hamburg School of Business Administration (HSBA) to analysing this gap between walk and talk. She presented product and consumer-related factors for ethical fashion consumption.

Offering consumers fair fashion requires socially and environmentally sustainable supply-chains. To this end, the platform amfori by Business Social Compliance Initiative, German Partnership for Sustainable Textiles (Textilbündnis) and Fair Wear Foundation (FWF) take different approaches. Monika Eigenstetter, Professor for Work and Organizational Psychology at the University of Applied Sciences Niederrhein, used a checklist on the strategic decision-making determinants for small and middle-sized enterprises at amfori and FWF. Whilst the overall results seemed fairly similar, a far greater percentage of FWF members participated and their grievance mechanisms scored better.

Solution Stage: NGO Power and Fair Fashion stayed true to its name by offering the following approaches for fair fashion:

  • A key driver for change is You, the consumer, according to Kalpona Akter and Khin Nilar Soe. All of us in the Global North have far greater leverage than we credit ourselves with: Buying organic and fair clothes, lobbying our favourite brands, politicians at home and in sourcing countries, supporting organisations like Femnet and ECCHR are a few ideas I would like to add to their call for action.
  • Textilbündnis and FWF offer an important space between non-governmental organisations and companies for establishing sustainable supply chains. They are, however, no substitute for effective campaigns which use blaming and shaming techniques explained Sina Marx, Coordinator for Femnet e.V.
  • Zero workers died in factory fires since the establishment of the Bangladesh Accord on Fire and Building Safety, a drop in numbers from several hundred per year. The effectiveness of this legally binding agreement between brands and trade unions underlines, in Kalpona Akter’s opinion, the need for binding human rights due diligence in textile supply-chains.
  • A central argument against raising wages in the textile sector is the fear that suppliers will then outsource. Action Collaboration and Transformation (ACT) is an international cooperation between big brands, retailers and suppliers as well as the international trade union IndustriALL to achieve living wages for workers promoting, amongst others, freedom of association and collective bargaining in key textile sourcing countries.
  • Further suggestions included: Prohibiting politicians from owning textile factories to avoid the current conflicts of interest among one third of Bangladeshi parliamentarians, and mounting political pressure on the state of Myanmar to subject investors to rules.

Non-governmental organisations (NGOs) play a key role in all of these approaches. The exchange between two academics, an NGO representative and two trade unionists was facilitated by Sarah Jastram, Professor for International Business Ethics and Sustainability at HSBA and co-publisher of Sustainable Fashion – Governance and New Management Approaches.

In the Q&A session, I asked Kalpona Akter about her opinion on the civil suit against textile company KiK by four Pakistani nationals in the Higher Regional Court of Dortmund, Germany. My presentation at A Sustainable Supply Chain at #8ICSR’s Expert Insight sessions had analysed its impact on CSR in Germany. Kalpona Akter found this precedent encouraging for survivors to bring more cases in the future and to continue fighting for a binding law on human rights due diligence. This Solution Stage showed that it may take more than court cases for fair fashion to tip into mainstream – but NGOs will continue leveraging their power as a key driver for fair fashion.

A current example for the need of new governance and management approaches is the struggle for the Bangladesh Accord. Although successful for workers’ rights, it may not be able to continue its work after 30 November 2018 due to a restraining order. With this order, the High Court in Bangladesh prohibits the Accord’s inspectors to work after this date. Around one third of politicians in Bangladesh own textile companies. They are said to have significantly objected to the Accord and its continuation.

On 25 November 2018, four days before the public hearing in the Ali Enterprises’ case in Dortmund, KiK’s Head of Corporate Responsibility, Ansgar Lohmann, expressed support for the Accord in Handelsblatt, a major German business newspaper: “If the Accord were to leave Bangaldesh, this would be a major setback”. If nothing more, the stance taken by this textile company is evidence for the NGO power to influence public discourse in the Global North.

Robert G. Eccles: Honoree and Award Winner of the Lifetime Achievement CSR Award 2018

Robert G. Eccles: Honoree and Award Winner of the Lifetime Achievement CSR Award 2018

The MIT Center for Transportation & Logistics selected Robert G. Eccles as the winner of the ‘PROSE Award for Excellence in Business, Finance & Management ‘For Professional and Scholarly Excellence’’, Trust Across America named him ‘Top 100 Thought Leader in Trustworthy Business Behavior’ and Ethisphere Institute profiled him twice as one of the ‘100 Most Influential People in Business Ethics’. At the 8thInternational Conference on Sustainability and Responsibility, he was now awarded with the ‘Lifetime Achievement CSR Award 2018’.

The focus of his work

Eccles describes himself as ‘dedicated weight lifter’, ‘sustainability advocate’ and ‘capital market activist’ in the social networks on LinkedIn and Twitter. His vision is to enhance corporate reporting as well as integrated reporting and to improve the integration of environmental, social and governance factors(ESG factors) by both, investment decisions of investors and strategic decisions of companies. His research is based on a significant need for integrated reporting and sustainability with a focus on the role of business within society from the perspective of companies and investors. Examining current issues on sustainable development, in order to support and achieve materiality, corporate and investor transparency in the long term,he is recognized as foremost academic expert by Veritas Financial Analytics, LLC.

Eccle’s background and career

Robert Eccles studied Humanities and Science simultaneously with Mathematics at the Massachusetts Institute of Technology before achieving a Master degree in Sociology from Harvard University. At the same university he obtained a Doctor of Philosophy in Sociology. The former Professor at Harvard Business School is currently working as Visiting Professor of Management Practice at the Saïd Business School at the University of Oxford.

Presiding in a multitude of cases, Eccles is perceived as leading authority showing companies and investors how to develop and implement sustainable strategies. Since 2011 he is the Founding Chairman of SASB – Sustainability Accounting Standards Board – an independent non-profit organisation with its mission to create sustainability accounting standards through information disclosure to investors by broad, balanced stakeholder participation and evidence-based research.In addition, Eccles is Chairman at the advisory service firm KKS Advisors LLC which supports its customers in generating innovative solution approaches to establish more business models and communities with a sustainable core. Furthermore, Eccles is one of the founders of IIRC – International Integrated Reporting Council – and a steering member of this global coalition among the parties involved withregulations, investments and accounting with the aim to implement integrated reporting through sustainable value creation and an encouraging communication about it. Besides, Eccles is Non-Executive Chairman of Arabesque Asset Management. Omar Selim, Arabesque Partners founder and CEO, emphasises that Eccle’s work fits their ‘focus on research and sustainability as key drivers to generate value for […] investors, shareholders and the capital markets more broadly’. From Eccles point of view Arabesque is a driving force for a sustainable society. Time for a change has come, there is a need for capital markets to promote such a sustainable society. Lately, Eccles joined MISUM – Mistra Center for Sustainable Markets – as Board Member of the research center for cross-disciplinesand multi-stakeholders.

Publications

Robert Eccles most recent book written together with Michael P. Krzus and published in 2014 by John Wiley & Sons, carries the title ‘The Integrated Reporting Movement: Meaning, Momentum, Motives, and Materiality’ and includes the suggestion of an annual “Statement of Significant Audiences and Materiality” by the board of directors and the concept of a “Sustainable Value Matrix” tool which enables managers to convert the statement into their decisions. Eccles did extensive research on integrated reporting and wrote the three following books on this subject: One Report: Integrated Reporting for a Sustainable Strategy (co-authors: Michael P. Krzus, Don Tapscott), Building Public Trust: The Future of Corporate Reporting (co-author: Samuel A. DiPiazza, Jr.) and The Value Reporting Revolution: Moving Beyond the Earnings Game (co-authors Robert H. Herz, E. Mary Keegan and David M.H. Phillips).

Personal conviction

Based on the firm belief ‘A sustainable strategy is how a company creates value over the long term’, Eccles advocates for integrated reporting and ESG factors to measure sustainability and to put it in practice, especially regarding companies’ future performance. In addition, he holds the view that not only the social but also the environmental performance is crucial for returns and has to be scrutinized in the long run. In order to meet the SDGs – Sustainable Development Goals – which are adopted by all Member States of the United Nations, it requires more than the involvement of the public sector. Also the private sector has to go through a process of change and to implement sustainable approaches. Otherwise, it will not be possible to achieve the SDGs.

At ‘The 8th International Conference on Sustainability and Responsibility: Responsible Leadership in Times of Transformation’ Robert G. Eccles was announced as honouree of the Lifetime Achievement CSR Award 2018 at Flora Cologne on 14thof November 2018. Georg Kell, founding director of the UN Global Compact held his laudation. Being pioneer in ESG & Integrated Reporting, Robert G. Eccles was honoured for his effort in leveraging capital markets for sustainable development by integrating ESG factors into resource allocation decisions of companies and investors.

Be part of the conference: www.international-csr.org

Follow Robert Eccles on Twitter: twitter.com/rgeccles

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Robert Eccles on LinkedIn

Articles and interviews:

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Links to his profile pages:

Further Publications:

About Georg Kell – Keynote Speaker at the 8ICSR

Georg Kell: ESG Financial Analyst and Designer of the Global Sustainability Agenda

Since 2011, Ethisphere Institute annually counts the German national amongst the ‚100 Most Influential People in Business Ethics‘, Fergal Byrne calls him a „key figure at the heart of the development of today’s sustainability agenda“. When Georg Kell worked on Kofi Annans renown speech “A Global Compact“ almost 20 years ago, he didn’t yet know that what was originally meant as a wake-up call and appeal to the experts, executives and politicians of the World Economic Forum in Davos, would turn into the world’s largest and most influential corporate sustainability initiative of our time under his leadership. Today, Kell sees the Global Compact’s biggest impact in having reshaped global views and mindsets on CSR. He says the biggest transformative power of the sustainability agenda is now finally awakening through a change of thinking in the financial world. It’s about time. 

Pioneer of the Modern CSR Agenda

Kell studied engineering and economics at TU in Berlin, where he then started his career at Fraunhofer Institute for product technology and innovation. He earned his PhD at St. Thomas Aquinas College in New York City. After having worked as a financial analyst in various African and Asian countries, he joined the United Nations in 1987.

The UN Global Compact (UNGC), led by Kell until 2015 has today been adopted by over 9,500 companies in over 160 countries to anchor CSR and to discuss a socially and environmentally sound globalization. During his time at the United Nations, Kell established the UNGC as a cross-sector forum for sustainable practices and policies. The platform significantly contributes to not only implementing CSR within corporations, but also to continuously develop, disclose and share the concept. Besides the UNGC, Kell moreover supervised the conception and implementation of parallel initiatives, such as the Principles for Responsible Investment (PRI), the Principles for Responsible Management Education (PRME) as well as the Sustainable Stock Exchange (SSE) Initiative.

The United Nations Global Compact is the worldwide largest and most important initiative for responsible business practice. Based on 10 universal principles and the Sustainable Development Goals (SDGs), it pursues the vision of an inclusive and sustainable global economy for the good of all people, communities and markets, today and in the future. (UNGC)

Moreover, Kell is Chairman of Arabesque, an ESG Quant fund manager that uses self-learning quantitative models and big data to assess the performance and sustainability of globally listed companies. Its investment technology processes over 100 billion data points to select an investment universe of equities with the aim of delivering superior returns, integrating Environmental, Social, and Governance (ESG) information with quantitative strategies. This offers long term returns and a significant reduction of portfolio risks.

System Change and the Power of Ideas

Only when companies take over ESG factors into their strategy and operations and realize that it pays to create sustainable solutions instead of being a root cause of global problems, a sustainable transformation can be successful. Responsible leadership, he says in an interview with the UN News Center, means “connecting all the dots (for) you know your own future financial success depends on the success of the market where you invest”. In the interplay of global stakeholders, business plays a key role when it comes to the rewriting of old paradigms in this regard. For Kell, the systemic transformation of markets is at the center of a successful sustainability agenda. The bis challenge and the real test lies in the reality that institutions and political systems are only changing slowly. Business must operate in frameworks which are, in the face of digitalization, technological development, planetary boundaries and complex, changing government structures outdated. So, the path to transformation is still oftentimes a chaotic and not always forward-oriented one. He for example calls out Germany’s subsidies of diesel consumption to be a “perverse outdated industrial policy”. We do not have a pre-drawn map to navigate the transformation we’re facing, but for Kell there’s no arguing: “we have to move from an industrial era model to a future-fit model”. Therefore, it needs courageous visionaries and leaders who, in the presence of an unknown future, do not fear to follow ambitious goals. We should not forget: Out of an inspirational speech – with the right vision and leadership – can emerge a network of over 9,500 corporations which is able to shape the awareness of an entire generation: “The strongest power humanity has is idea power”, says Kell.

Wake-up Call of the Financial World and the Acceleration of the Sustainability Agenda

Kell sees the true transformational power to move towards a sustainable system in the distribution of financial capital. In Fergal Byrne’s Podcast „The Sustainability Agenda“ , he calls 2018 to be the year of alignment between sustainable investment and responsible business practices. As one of the most inert players, the broad financial world has, in their obsession with short-term profits, tried to escape the ESG debate. Only a study in 2015, showing a positive correlation between ESG performance and long-term stock evaluation trigger a rethinking according to Kell: The wake-up call. In this development Kell sees the next big “boost” of the sustainability agenda. The PRI is growing fast, a variety of other initiatives is developing and with new financial products a new generation is realizing they can personally invest according with their values. The financial world is catching up in regard to the sustainability agenda and, thanks to quick technological developments, in a way that might have it overtake and significantly shape it: “Once finance speaks and relocates capital, then the sustainability issue really goes to scale and will be accelerated and hopefully policy makers will also realize about time to adjust the framework conditions”. Ultimately, we will need political leadership and a regulatory playing field that allows us to operate beyond the boarders of an industrial system.

At the moment, Kell is very much invested into the question of how to make the alignment between sustainable investing and corporate good practices happen in practice, and how to create transmission mechanism most effectively to bring it to scale as rapidly as possible. Because: We’re running out of time.

On November 14th 2018, Georg Kell will speak at the “8th International Conference on Sustainability and Responsibility: Responsible Leadership in Times of Transformation”. He will hold a laudatory for Robert G. Eccles, ESG & Integrated Reporting Pioneer and currently visiting Professor at the Saïd Business School at the University of Oxford, who will be awarded with the „Lifetime CSR Achievement Award 2018”. Join us and buy a ticket at: www.international-csr.org/icsr-ticket-information/ 

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Website Georg Kell:

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