Today, consumers do expect companies to be completely transparent about their activities. However, according to Deloitte’s 2021 survey into consumer attitudes to environmental and ethical sustainability, “nearly 1 in 3 customers claimed to have stopped purchasing certain brands or products because they had ethical or sustainability related concerns about them.” The study found that both “respect of human rights,” and “commitment to ethical working” were valued as highly by consumers as other more obvious sustainable practices such as reducing emissions and waste. The results paint a clear picture: there is not just a moral imperative to do good in the community as a business — there’s a financial one too.
A joint 2019 report between the Zurich University of Applied Sciences and the Business and Human Rights Resource Centre, a think-tank, ranked companies on a basis of whether they manage their human rights risks sufficiently. Among the 20 companies surveyed, Bayer, a German multinational life sciences company, ranked in sixth place, committed to continuing its efforts to improve across all indicators moving forwards. Bayer was also one of only three companies on the list to have a public commitment to provide remedy in case of harm. Since that report came out, the German company did progress on the matter: human rights issues are among the responsibilities of the chairman of the Bayer board of management. In his role as chief sustainability officer, which he took on in 2020, he is supported on the topic of human rights by the ethics and social impact team.
Due diligence starts at home
When it comes to human rights, Bayer has a clear policy: to have processes and monitoring systems in place to implement human rights in their operations; an expectation of business partners — suppliers and customers — to share their commitment to respect human rights, and to conduct their business in an ethical manner and act with integrity; and a commitment to support human rights in local communities.
For Bayer, due diligence starts within their own home: with their employees. Underpinning every effort to ensure human rights are upheld within the business is a commitment to paying employees a living wage. This means that rather than simply paying employees a customary statute minimum wage, a living wage allows them to purchase the goods and services they require to meet a minimum cultural and social standard for living in the country they live.
Janina Lukas, head of ethics and social impact at Bayer, agrees. “Human rights rests at the core of our environmental, social, and governance (ESG) efforts along the entire value chain, and we are committed to continuing to build on this alongside the EU’s policy goals moving forwards.” In fact, Bayer was one of the first companies in the world to pay living wages in every country where it has operations.
But it’s not just at home where human rights policies are needed. Only companies who commit to enforcing ethical practices all the way up the supply chain can ensure no one is left behind. Bayer does this via the implementation of a four-step process to improve management practices, which involves raising awareness, selecting suppliers for evaluation, evaluating sustainability performance and developing suppliers by helping them to develop their own sustainability performance.
Bayer has a long history of living up to its societal responsibility. The company is a founding member of the UN Global Compact, one of the world’s leading initiatives for companies that are committed to integrating corporate responsibility principles in their business operations and strategies. It has also committed to act responsibly along the entire value chain, meaning the workforce, suppliers, customers, consumers and the local communities around the value chain.
A good example of the need to influence positive change through business policy is with regard to child labor, which the International Labour Organisation (ILO) defines as “as work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development.” According to the ILO’s 2020 report, global efforts to reduce child labor have stalled since 2016, with 160 million children worldwide aged 5 to 17 working, 79 million of which doing so in hazardous jobs.
In order to tackle this, additionally to the four-step process, Bayer has implemented a Child Care Programme (CCP), which sets out a plan for systematic action to prevent child labor in the seed supply chain, specifically in India, Bangladesh and the Philippines (countries identified as high risk for infractions). Alongside a clear contractual ban of child labor and incentives and sanctions for farmers, the business has implemented a comprehensive field monitoring program, as well as educational support through the Learning for Life initiative. Alongside another initiative called the Early Child Education Programme, the CCP has so far reached over 7000 children and young people, more than 1100 of which are school students who successfully finished the career-orientated program between 2010 (the year of launch) and 2020.
The company quickly saw that applying localized approaches is a best practice. Trying to apply or to force one-size fits all activities does not work when you properly like to live up to Human Rights Due Diligence.
In a research evaluating 56 academic studies, Deutsche Bank found that companies with high ratings for ESG factors have a lower cost of debt and equity. With that in mind, it is clear that those who incorporate strong ethical working practices within their business strategy have more to gain than simply respect.
The EU’s planned Sustainable Governance Initiative is a good example of policy created with the specific intention of aligning government interests with the long-term goals of businesses in order to help them focus on improving their broader impact on society. For Bayer, which is committed to improvements in this area, this represents a huge opportunity to work closely with the EU to ensure the company continues to build on its commitment that bolster its position on human rights. When the interests of business and policy align to produce commitments that both measure output and establish clear targets for ESG, the drive towards more sustainable progress accelerates hugely. This is why it’s important for the EU to create a precise, predictable and easy to implement legal framework to help companies improve their impact on society — it’s a win-win approach.
Bayer. (2020). Sustainability report. Available at: https://www.bayer.com/en/media/sustainability-reports
Business & Human Rights Resource Centre. (2019). Respect for Human Rights: A Snapshot of the Largest German Companies. Available at: https://www.business-humanrights.org/en/from-us/briefings/respect-for-human-rights-a-snapshot-of-the-largest-german-companies/
Unicef, International Labour Organization. (2020). Child Labour: Global estimates 2020, trends and the road forward. Available at: https://www.ilo.org/wcmsp5/groups/public/@ed_norm/@ipec/documents/publication/wcms_797515.pdf