Allison Schwartz is the head of Government Relations at Dun & Bradstreet, the global leader in commercial data, analytics and insights for businesses. She is responsible for the company’s public policy and government relations efforts, and works with decision-makers to influence key public policies. A graduate of Tulane University, Schwartz also serves on Dun & Bradstreet’s corporate citizenship committee.
Christopher P. Skroupa: How can CEOs be convinced that human rights policies affect their company?
Allison Schwartz: Reputational risks for companies are at an all-time high. Today, we are seeing businesses, and in some cases entire industries, negatively impacted when they are implicated – either directly or indirectly – in incidents involving human rights infractions, like human trafficking or forced labor. Having a policy to guard against these incidents are table stakes for companies, but it’s not enough. In addition to communicating policies to their employees and business partners – and holding them accountable – companies must utilize all available innovative tools to help fight these deplorable practices and, at the same time, mitigate compliance risk.
It’s imperative for corporations to use robust analytical tools, fueled by data and powered by technology, to make better decisions which can reduce financial and reputational risks. Deep, reliable, global data is necessary to illuminate company structures and relationships between businesses to give leaders a better view into their supply chains, and help increase the likelihood of their suppliers doing business in a transparent and ethical manner. CEOs, senior leaders and corporate boards need this information to fully understand their risks.
Across the globe, regulators and law enforcement at every level of government are attempting to tackle this problem. This year has already seen legislation introduced in Maryland that aims to reduce child labor and sex trafficking, and Texas Department of Family and Protective Services Commissioner, Hank Whitman, identified trafficking as one of his top 10 priorities. Indian radio talk show host, Ginnie Mahajan, in New Delhi, highlighted that human trafficking in that country rose by almost 20 percent in 2016 over the previous year. Indian government data also shows that more than 60 percent of the approximately 23,000 victims of human trafficking rescued there were children.
Investors pay close attention to external brand perception which certainly impacts share value, but brand perception is also a key factor in attracting top talent. Company culture and brand values, including a business’s approach to human rights policies, are becoming more of a consideration that prospective employees weigh when choosing whether to join an organization. More and more companies are tying their governance processes to global policies and labor standards to not only demonstrate their commitment to being a responsible global corporate citizen, but also creating transparency in their procedures that will mitigate any risk of non-compliance.
For moral, ethical and business reasons, and with a greater understanding of such factors, no CEO should ignore the fact that human rights policies affect their companies.
Skroupa: How can data help measure risk and how can it be presented so it provides a baseline standard for companies on a global scale?
Schwartz: Viewed through an analytical framework, companies should identify potential risk of human trafficking in their supply chain by combining data from several sources, such as government agencies that publish reports on the state of global anti-trafficking efforts, and commercial data that identifies goods and services as well as the conditions surrounding their source of origin. This framework can be applied globally and can be used as the first step in identifying risks of modern day slavery in a company’s supply chain. By focusing on the higher-risk entities, companies can enact targeted policies and programs to bring about positive change. As more companies start to leverage an analytical approach to the problem, a base-line mandate will start to develop across industries, and companies’ policies will start to show positive impact across the globe.
Skroupa: What is the larger social cause and impact of these business risks?
Schwartz: Demand for goods and services in the global economy has created an interdependent ecosystem of migration and forced labor. According to the International Labour Organization, modern slavery is the fastest-growing organized crime, with more than 40 million worldwide victims. An estimated 17,500 foreign nationals and 200,000 Americans are being trafficked into and within the United States every year, 80 percent of which are women and children.
Skroupa: What technology and practices could be developed from this information to improve the impact that CEOs can have on human rights?
Schwartz: The unfortunate truth is no industry is immune from touching a potential human trafficker somewhere in their supply chain. Many companies could be unknowingly feeding these criminal organizations because they hide behind layers of companies whose subsidiaries may use slave labor. Companies need enterprise-wide visibility into data around purchasing patterns and corporate hierarchy and connections to inform a holistic understanding of each supplier relationship, which is key to identifying risk. Through innovation, companies can automate the identification of risks, and more easily comply with global regulations as well as their ethical policies and standards. Compliance systems may vary based upon industry or global region, but knowing the risk via modern, connected technological tools is a critical first step.
Skroupa: From an activism and corporate social responsibility lens, to what extent will shareholders play a role in improving the positive impact CEOs can have on human rights?
Schwartz: The pressure is on companies to identify what they are doing to prevent modern day slavery and to support human rights. But the reality is, it shouldn’t take shareholder engagement or regulatory focus for companies to step up.
Many organizations and governments around the globe are focusing on human rights and corporate social responsibility. This past January, modern day slavery was on the agenda at the World Economic Forum in Davos, Switzerland. British Prime Minister Theresa May calls it, “The great human rights issue of our time,” and, “A barbaric evil.” In late 2017, The Global Fund to End Modern Slavery was established, to bring a global lens to the problem. This U.S.-based fund helps facilitate public-private partnership between global governments, businesses and charities to tackle the problem, and both U.S. and U.K. governments have made commitments to the fund. This is a global issue and it will take all of us to unite together to tackle it.
Skroupa: What are the most important things CEOs should know moving forward?
Schwartz: Modern slavery is a complicated issue to take on, but it needs focus and prioritization from CEOs. Modern slavery is truly a global crisis, and industries have a duty to pay attention and do what is right. Companies need to create a zero-tolerance policy for human rights abuses within their supply chain, and making that a priority is critical. While action is often driven by regulation, creating a strategy to prevent modern slavery in your supply chain should also be driven by a deeper purpose within your company. It’s the right thing to do.
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