I know nothing about return on investment.
I know we need to save the planet but have no idea how. I know what I am able to do in my personal life, recycling, buying organic and local, walking instead of driving etc., etc., I know how to fix plumbing, to a certain point… then I call the plumber. I know I will need a mason to access the leak behind the wall… When I go to my GP I usually get good advice – he’s a really good GP – then he sends me to a specialist.
We do not necessarily think of these referrals or calling our mason or plumber as partnerships. But they are. We recognize what we know, and when our knowledge falls short, we call an expert. What is astounding to me is that while that is true at home – when the leak is in the wall – it seems to be less true when it comes to using the right expert for the right issue when promoting sustainable business. It seems (it seems because I am not an expert!) to me that there is by now an increased recognition among investors and businesses that they need to rely on experts from a variety of technical fields to adequately address environmental issues.
I am, however, not at all certain that technical expertise is being sufficiently harnessed or listened to – for that I would have to ask one of our partners. They know.
We were just discussing co-creating a training programme for E and S and G [Environment, Society and Governance]– they would be responsible for the E part, and they were thinking of how to bring in even more detailed expertise on a variety of issues. Their own partners.
Partnering is about harnessing our potential and our knowledge. And it is not because we work on sustainability that our knowledge is less specialised, nor less valuable. I mention this because I have observed the tendency to think that anyone can deal with social sustainability issues as well as good governance… as anyone will have a lay opinion on “human rights”. There is nothing wrong with lay opinions – but if that is the basis for addressing social sustainability (non-discrimination, non-exploitation, land and property, labour rights, access to health care, effects of corruption on society, living wages, access to education, meaningful human rights due diligence, social KPIs, engagement with supply chain and broader society, avoiding that “No child labour” ends up being “sending children into the hands of armed forces”, identifying red flags around labour exploitation and human trafficking, multi-stakeholder engagements) then, all of a sudden, the lay opinion can end up seriously hurting the people who are the “social” in ESG – as well as result in substantive fines and loss of licence.
Thinking that this can be done without partnering with people who know, who have experience and expertise, is very much like taking the car to the vet, or the cat to the mechanic. Or asking me to fix the leak in the wall.
In a “traditional” business model, where profit is the ultimate objective, it is unimaginable that the accountant is responsible for corporate law issues – an inhouse lawyer AND an external retained law firm will be asked to make certain that a company is not exposed to liability. Lawyers are not asked to buy and sell shares in companies, you have traders for that; the recently graduated paralegal will not be asked to take first chair in an eventual lawsuit. There is an automatic understanding of drawing on experience, competence and expertise. Some will be internal some external partnerships.
I was recently asked if, in my opinion, companies and investors are doing enough to promote human rights, and what some of their biggest challenges are – such as lack of standards, difficulty in measuring and quantifying, etc. What I really want to say is “No. Not at all. But…” and this is the important part “…it really is not their fault.”
The biggest challenge is this: companies and investors are being asked to address issues such as the ones mentioned above related to human rights, labour standards implementation, human rights due diligence, multi-stakeholder and community engagement, addressing social effects of environmental decisions, showing that they have done no-harm and what they have done to have a positive impact, both by consumers, by Asset Managers (who also do not have the internal knowledge to actually evaluate answers or target questions) as well as from regulators.
The request is perfectly legitimate and necessary, but these are issues that take years of training and professional development to deal with meaningfully! They are just as complex as making a meaningful investment (return on) decisions. But somehow the professionalism and competence on these issues are overlooked and people with no training and no experience try to tackle them as they would financial KPIs. How many investors have been asked to show progress on advocacy issues on access to justice? Or on literacy rates in the areas they invest in? How many know about ILO standards on living wages? Or how to ask due diligence questions related to non-exploitation or fair recruitment? Not many … and that is perfectly fine and legitimate too! There is an urgent need to cross-fertilize between professions! To create partnerships that draw in the utterly necessary competence to address these issues.
That would also dispense of the notion that there is no framework and that social impact cannot be quantified – true social impact and good governance cannot always be put into exact numbers in an excel sheet but that does not mean you cannot have meaningful measurements and meaningful goals, that you either reach (good) or do not (not so good).
The standards on social sustainability and what constitutes good governance exist. All regulations coming out now will be based on existing international standards that States have signed up to and ratified. It is not like the Environmental part where everything basically had to be invented during the last ten years. Just the other day, I saw the notion of “effective control” in a court sentence against a multinational company – it is a concept we have been applying to State responsibility for years.
In BST Impact, as in Impact17, we believe in drawing upon true expertise to deliver professional results. We cannot authoritatively speak about environmental issues or issues around the automatization of non-financial reporting – so we have partnered with people who can. We cannot do effective marketing – and the enormous sigh of collective relief that went up in the team the day we hired someone who does that was… a storm! Partnerships are about valuing professions and professional competence and experience – and ultimately about progressing and about doing things well and obtaining REAL RESULTS! Real results by the way that can be reported on in meaningful sustainability reports – but that’s for another day!
To create new partnerships and encourage in-depth knowledge about ESG/Sustainability, BST Impact Sàrl is running a series of “Bootcamps” in partnership with others o environmental factors, board competence, gender inclusions, work-systems and flows. We decided to combine training for investors and businesses to learn from each other and to create partnership and collaboration on solving challenges.
Kristina Touzenis is a lawyer and a recognized leader in the effective and concrete operationalization of international human rights standards and principles in complex settings worldwide. She has more than 20 years of experience in advocacy, human rights reporting, monitoring, and evaluating as well as in policy-making and negotiating at the national, regional, and global levels.
Kristina founded BST impact sàrl to help companies and investors effectively operationalize ESG criteria and the Business and Human Rights agenda into their respective sustainable business strategies, investment processes and risk assessment management systems.
Previously, Kristina created the International Law Unit at the International Organization for Migration - IOM, the UN Agency for Migration and served as Head of the Unit from 2011 to 2020. In that role, she built internal organization-wide policies and guidance for offices worldwide on how to operationalize, report, and monitor the impact of programmes from a rights-based perspective, developing indicators and methodologies to measure and leverage benefits to broader societies and beneficiaries. She also engaged with government counterparties on legislation development and review as well as with other Agencies within the UN common system, on advocacy and implementation of programmes worldwide.
From 2006 to 2011, Kristina worked in the IOM Regional Office for the Mediterranean Region translating international norms and standards into practice on the ground and from 2002 to 2006 on implementing children's rights in the Mediterranean Region for an NGO. Throughout her career, she has taught post- and undergraduate courses in international law at several universities.