Making Headway on Business and Human Rights
On the 10th anniversary of the NYU Stern Center for Business and Human Rights, Director Michael Posner spoke to STERN BUSINESS about how the field of business and human rights has evolved, in a world more connected than ever by technology. Posner has a long career in human rights advocacy as the former assistant secretary of state for democracy, human rights, and labor in the Obama Administration, and founder and longtime executive director and president of Human Rights First, a US-based advocacy organization. He is the Jerome Kohlberg professor of ethics and finance at Stern and also chairs the board of the Fair Labor Association.
The enhanced capacity of technology over the past 10 years has affected every aspect of business–and not just at the big tech companies. What are the pressing human rights implications of these shifts that businesses and government regulators are now facing?
New technologies have created extraordinary opportunities for us to communicate easily and efficiently, to gather and store data and to advance science and learning—all very positive developments. But as these new technologies evolve, we also have seen negative consequences caused by bad actors, including the proliferation of hate speech, bullying, and the wide dissemination of disinformation online that undermines our democracy and is fueling polarization.
Since 2017, our Center has focused on these challenges and engaged actively with the largest internet platforms and technology companies. My colleague Paul Barrett has studied their operations, published in-depth reports assessing the nature of the threats, and made practical recommendations to them and to governments on how best to address these challenges. Developing an effective roadmap for moderating harmful content online while protecting free speech is a daunting challenge, but one we must pursue.
A decade ago, ESG (Environmental, Social, and Governance) was an afterthought in the investment industry. Today, ESG is linked to trillions in funds, and governments are increasingly regulating businesses on environmental and social rights. What is your assessment of ESG investing today and where it is headed?
ESG frameworks are premised on a recognition that environmental challenges, such as climate change and social challenges and ensuring the well-being of workers in global supply chains, are relevant to running successful 21st century businesses. There has been a dramatic increase in attention to these subjects, especially among women and younger investors. They want to invest in companies that prioritize these issues, and their interest has helped fuel the growth of ESG funds. But there have been some missteps and ESG funds now are drawing criticism from different quarters, including some conservative politicians that want to abandon ESG investing altogether. They call it “woke capitalism” and think investors should only focus on short-term returns. We disagree. We have helped amplify another critique, which says that most ESG funds focus more on risks to investors than on risks to people or the planet. We focus on the “S,” urging greater clarity in defining the term “social,” and calling for more and better data through which corporate performance can be measured.
As global brands expand the countries they do business in, what do they need to consider from a human rights perspective?
Over the last half century, a globalized economy has generated millions of new jobs and lifted more than two billion people out of extreme poverty. Global companies have been the main driver of this progress, generating jobs in manufacturing, agriculture, and mining. But typically, these global supply chains have expanded to developing countries where local governments are unwilling or unable to regulate labor practices to protect their own people. This has created a governance gap which we and others have urged multinational companies to fill.
Weeks after I arrived at Stern, an apparel factory complex in Bangladesh collapsed, killing more than 1,100 workers, mostly young women. In the aftermath of this tragedy, we have worked with companies and others to support the development of common labor standards for outsourced workers in low-wage economies. We also have urged companies to work with their local business partners, civil society organizations, and other global brands and retailers to help implement these standards. In the last few years, governments, especially in Western Europe, have begun adopting more stringent regulations relating to global outsourcing of labor. For example, a new German supply chain law requires companies that do business in Germany to disclose more data about their operations and will hold them accountable for non-compliance with international labor standards. Part of our mission will be to help global companies comply with these new rules of the road.
The Center was a trailblazer when it launched. How has the perspective on human rights and business shifted since then and where do you see it going in the future?
We are very proud of our leadership and grateful that Stern has embraced our vision. A decade ago, many observers asked whether human rights are even relevant to business education. Today, attitudes are dramatically different. Most people understand our relevance and the centrality of promoting human rights in a business context. In 2018, our Geneva-based colleague Dorothée Baumann-Pauly launched the Geneva Center for Business and Human Rights at the University of Geneva. Over the last six years, Dorothée and I have begun to build a global network of business schools with an interest in teaching and doing research related to human rights. Each year, we convene members of our network in Geneva and via videoconference to fortify and expand this network. We now have ties to more than 70 business schools. Our priority in the coming years is to expand into more countries in Africa, the Middle East, Asia, and Latin America. We’re growing, and our ideas are finding receptive audiences around the world.
Photo: Paul Barrett, Center for Business and Human Rights Deputy Director and Senior Research Scholar (left), and Dorothée Baumann-Pauly, Center Research Director (right), on a research trip in Bangladesh in 2018
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