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OVERVIEW

Credible, third-party standards provide increased transparency and accountability along corporate value chains on environmental and social dimensions. By establishing and adhering to best business practices, companies can better measure and manage environmental and labor compliance. Consumers can then reward companies for their compliance through purchasing decisions.

Size/Magnitude of Problem

Business practices and supply chains are inextricably linked with environmental and social issues such as deforestation, climate change, water management, pollution, and exploitative labor practices. When sector standards are weak, income, health and the surrounding environment of vulnerable groups (e.g. local laborers, poor communities) are most adversely affected. While these impacts are most immediately felt in poorer regions where production occurs, the long-term effects of irresponsible business practices and consumption will be felt by all.

  • Business practices and supply chains are inextricably linked with environmental and social issues such as deforestation, climate change, water management, pollution, and exploitative labor practices. When sector standards are weak, income, health and the surrounding environment of vulnerable groups (e.g. local laborers, poor communities) are most adversely affected. While these impacts are most immediately felt in poorer regions where production occurs, the long-term effects of irresponsible business practices and consumption will be felt by all.i
  • 89% of major food companies have no goals for responsible water sourcing, although 70% of the world’s fresh water is used by the food industry.ii
  • Less than 10% of the world's certified responsible fisheries are in developing countries, which account for nearly 50% of global seafood trade.iii
Desired Equilibrium

Best business practices and profit are synonymous with long-term, sustainable value creation for all stakeholders. Private markets are governed by industry standards rooted in responsible social and environmental stewardship. Companies are held accountable for standards through consumer- and policy-driven systems of transparency. Investors and governments reward responsible standards through capital investment and supportive policy, while consumers reward best practices through their everyday purchases.

Ways Skoll social entrepreneurs are addressing the issue:
  • Establishing industry certifications that provide businesses with legal frameworks for social and environmental sustainability (B Lab, Fair Trade USA, GoodWeave, Marine Stewardship Council, Telapak)
  • Partnering with corporations to ensure responsible sourcing of wholesale products (Fair Trade USA, GoodWeave, Verite)
  • Collecting and presenting data to drive transparency and accountability (Fair Trade USA, GoodWeave, Marine Stewardship Council, Verite)
  • Influencing consumer purchasing power through product labeling and advocacy (Fair Trade USA, GoodWeave, Marine Stewardship Council)
References

i U.S. Department of Labor (link)
ii Ceres (link)
iii Science (link)

Critical Geographies
People in Modern Slavery

As defined by Global Slavery Index (> 500,000 people)
India, China, Pakistan, Uzbekistan, Russia, Nigeria, Democratic Republic of the Congo, Indonesia, Bangladesh

CO2 Emissions

As defined by the World Bank (> metric tons per capita)
Qatar, Trinidad and Tobago, Kuwait, Brunei, Luxembourg, United Arab Emirates, Oman, Saudi Arabia, Bahrain, United States, Australia, Kazakhstan