This post is a departing point for the Bizolutioners’ section presenting and debating ideas and projects to solve the many challenges which business operations create when they disregard human rights and the environment.
The relation between the amount of information about bad events occurring, and the amount of guidance on how to join improving our world is disproportional: the more goes wrong, the less one knows what to do! One feels helpless and agrees with giving power to one or several leaders to cope with whatever is the Emergency of the Day. Unsurprisingly, in the long-term this leads to a shift of power – from the hands of the individual towards entities. These entities then also impact daily life outside of those matters originally affected by the emergency event, as in the case of counter-terrorism and human rights.
In Business and Human Rights matters are usually as complex as in politics. For instance, long supply-chains from the so-called ‘rare earths elements’ used for mobile phones to textile manufacturing make it difficult to point out who is in charge and who can be held responsible. The only thing which seems clear to most people is: companies often abuse human rights because, above and beyond everything else, they want to make as much profit as possible.
Obviously, it is not in the interest of those who commit wrongs to give us a 10-step guide which tells us how to solve the problems flowing from pursuing profits. There is no easy solution to prevent companies from harming their employees, consumers and our planet, neither is there a simple way to help victims to get their lives back, especially after they or their family members and friends were killed like in the Rana Plaza tragedy in 2013. The burden to take responsibility lies with us – that is why it is called ‘self-responsibility’. This section of Bizolutioners is dedicated to showing how we can take on the burden and walk the extra mile to create alternative paths to produce and consume.
Thereby, we have a wide understanding of ‘business’: it can be any entity which fulfills company-like functions, as well as ways to produce goods which render companies superfluous, such as sustainable living cooperatives. The objective is to present a variety of approaches to produce goods while effectively respecting human rights and the natural limitations of our planet.
Simultaneously, this section offers space to present alternative forms to consume. ‘Consume’ in its widest sense can be understood as the use of resources during the course of a life. Hence, the space is open for everybody wishing to present individuals or groups creating and/or maintaining lifestyles with little negative, if not direct positive impacts on communities and nature.
This includes people who work to engage society “in learning and acting on the role of the private sector in human rights protection”. They may demonstrate against mining or fracking, organise or join movements fighting free trade agreements – check out the upcoming article on TTIP! Or they simply set aside time in their busy lives to re-organise their budget so they can buy more organic and fair trade products. Ideally, this will be a very international and diverse section. We hope to find contributors who can share stories from places which are commonly associated exclusively with misery and despair.
As a first step, we will briefly introduce you to a tiny fraction of the different possibilities to produce, and to consume. They may serve as inspiration to you – or as an alternative occupation if you are a ‘news-addict’ and want more optimistic information.
Those working in any kind of company are familiar with the subtle background noise asserting that ‘those human rights’ are of no concern to daily business operations. This attitude is reflected in company law worldwide. It is often cited as justification or defense for company decision-making which is contrary to the best interests of the communities affected.
In 2006, three friends in the US founded the non-profit organization B Lab: they want all US states to allow for a new business model which gives higher weight to people and planet when making decisions than conventional types of business – the ‘Benefit Corporation’.
In the USA, most laws regulating how to form and conduct a company are based on the level of the different states while federal laws mainly apply to those huge corporations whose shares are traded on stock exchanges. Generally, US corporate law gives company directors absolute freedom to apply the ‘business judgment rule’: to make those decisions which are in the best interest of the company. The ‘best interest’ is understood as meaning the best interests of the owner of the company. In small companies like the shop around the corner, this may be one person, or a family. Large companies, in contrast, are divided in shares held by other companies, institutions and wealthy individuals. These shareholders can be perceived as being the real owners of that kind of company. They make money when the value of their shares goes up. For instance, when the company discovers a new product to sell. Share prices can also go up when the company saves a lot of money in the short-term, exemplary when many employees are dismissed at once.
Academics and scientists continue to lead very vivid debates about the question who actually owns a company and whether shareholders are really only interested in making fast money (check out the academics’ view with an introduction to the so-called Berle/Dodd debate). As a matter of fact, courts in the USA usually give wide discretion to company directors. They only question a director’s decision when those holding shares of the company or lending the company money complain that the ‘best interests of the company’ were not sufficiently considered. Traditionally, this is determined when a decision has not sufficiently pursued profit-maximisation. Thus, profit is understood as short-term monetary gain for the benefit of shareholders, not as the benefit of society in the long run.
For instance, company directors may need to decide whether the company should invest in technology and pay employees to clean up after it stopped mining in a certain area. On the one hand, this would allow the communities affected by the mining site to continue using the water, and to build houses near the former mining site. However, the company is not going to make any financial gain from these actions after the mining site is closed. Instead, the actions would lead to extra costs. These expenses would be regarded as unnecessary by the participants on the stock exchange. Cleaning up after closing a mining site effectively lowers the attractiveness i.e. the value of the shares of this company. Consequently, directors may decide not to ‘do the good thing’ in order to please shareholders – in place of considering the interests of those whose lives are directly affected by the closed mining site.
The statute of the Benefit Corporation, in contrast, requires a company to ‘have a corporate purpose to create a material positive impact on society and the environment’. Further, the Benefit Corporation must consider its impact on those who do not hold any shares or other financial power over it, and it must subject itself to independent transparency requirements.
Changing the company laws of states across the USA to include a text which allows citizens to form Benefit Corporations means that companies of all sizes, from very small to very large can be founded. The latest milestone in the success story of the non-governmental organization B Lab was reached in 2013: then, the State of Delaware enacted legislation which allows forming Benefit Corporations. Delaware is known for its lax legislation and, therefore, the most popular state to found companies in the USA.
With this brief presentation we do not want to say that it is impossible to challenge huge multinational corporations. The organisation SumofUs urges those individuals who either hold shares directly with Monsanto, or indirectly through their investment in Vanguard and/or Fidelity to vote for a shareholder resolution. This resolution demands separating the posts of Chief Executive Officer and Chair of the Board, and staffing the latter with an independent individual. In other words: the aim is to improve the accountability within the company.
For some this might be an approach which is too slow, and targets exclusively middle class and wealthier members of society. For us, however, it shows the diversity of possible approaches to promote human rights in business operations.
There are many less theoretical and more exotic initiatives like the Finca Bellavista Treehouse Community in Costa Rica. For those seeking an equally non-urban lifestyle in organic farming and/or organic building, there are international networks bringing project makers needing helpers, and travel-hungry volunteers together like WWOOF and the POOSH .
Finally, for many people who hold a job and have a family, buying fair trade and organic products may be the most practical step towards a more planet-and-people-friendly lifestyle. Marketing and other business segments have started to call these people LOHAS since they follow ‘Lifestyles of Health and Sustainability’.
Yes, there are many really terrible events met by indifference; yes, they also affect your life; yes, we all need to change our production and consumption habits; and yes, you can become part of a movement for change of your choosing!