Politics of Poverty

Poverty Footprint: A unique tool to assess business impacts on sustainable development

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Milling crude palm oil in Samboard, Sinoe County, Liberia. Equatorial Palm Oil (EPO), is rapidly expanding its operations in Liberia and plans to clear tens of thousands of hectares of land to grow palm oil to sell in domestic markets and for export to Asia, Europe and the United States. The deforestation and land use change threatens the food security and livelihoods of local communities and will release large amounts of greenhouse gas emissions into the atmosphere contributing to climate change that makes people hungry. Local people fear that the company plans to clear forests that the community relies on to farm and feed their family. (Photo: Anna Fawcus / Oxfam America)

As the role of the private sector in development expands, the Poverty Footprint may help us ensure their contributions are making a difference in the fight against poverty.

This post was co-authored by Ursula Wynhoven, Chief of Social Sustainability, Governance & Legal at UN Global Compact and Helen Van Hoeven, Deputy Director of the Private Sector Department at Oxfam America.

As engines of economic growth, global companies have wide-ranging opportunities to positively affect the lives of the poor.  Yet, company impacts on people living in poverty are largely not understood and under-reported.

With the adoption of Agenda 2030, the United Nations Global Compact and Oxfam published guidance last fall for the Poverty Footprint, an assessment tool that allows company and civil society partners to take a people-centered approach to assessing business impacts on sustainable development. The tool takes a comprehensive view of poverty and its drivers: livelihoods; gender & diversity; health & well being; empowerment; security & stability. It also addresses a range of company practices that impact poverty: macro-economic; value-chain; institutions and policy; local environmental practices; and products and marketing.

Based on lessons learned from over a decade of Oxfam and company experiences (Unilever, The Coca-Cola Company/SABMiller, and IPL/ASDA) and input from sustainable development experts, below are unique features of the enhanced Poverty Footprint tool:

1) Voice and Participation of Local Communities

Too often, impact assessments rely on desk research or third-party consultants that claim to represent affected people or communities, but may not have legitimate connections or genuine networks in the local context.

The Poverty Footprint requires that the research and data include views of people living in poverty, whether they are factory or farm workers, or people living in an area affected by company operations. The civil society partner in each poverty footprint plays a crucial role in ensuring that community voices are heard, and reflected in the assessment.

2) Balanced (assessing negative and positive impacts)

Since the 2011 endorsement of the UN Guiding Principles on Business & Human Rights, conducting human rights due diligence has become more common corporate practice. Recent news reports of modern day slavery or land grabs in supply-chains are constant reminders that such assessments are needed.

However, by focusing only on negative impacts, human rights impact assessments (HRIAs) often overlook the positive role businesses have in achieving sustainable development and poverty eradication. The Poverty Footprint takes a holistic approach, looking at positive and negative company impacts on poverty and its drivers. Positive contributions can relate to core business innovations, such as a pharmaceutical company or a bank making their products and services available to the poor. It can also refer to a company’s broader business relationships, such a promoting inclusive supply chains, or collective action to influence public policy.

Moreover, respecting human rights often has positive flow-on affects for realizing other rights. If a company respects the right for workers to organize and collectively bargain, for example, this enables decent work and living wages, which has positive flow-on effects to advancing the right to quality education, right to highest attainable standard of health, etc.

3) Partnership

A few decades ago, it was unheard of for a development NGO to partner with a multi-national company in a constructive way – most NGOs were more interested in taking direct actions or campaigning against companies, such as blockading roads or organizing boycotts.

Today there is growing recognition – reaffirmed by Sustainable Development Goal 17 – that partnerships and collaboration between governments, private sector, and civil society are needed to achieve the ambitious sustainable development agenda.

When it comes to developing solutions to tackle poverty and its framework conditions, both companies and civil society organizations (CSOs) have blind spots. CSOs often lack the resources to scale their work and can benefit from insights into a company’s operating environment. Companies often lack trust-based networks, and may lack understanding of the drivers of poverty and how they may reinforce each other in a local context.

By conducting Poverty Footprints in critical sectors and geographies, companies and CSO partners can build upon each other’s strengths and develop joint solutions to achieve transformative change.

4) Transparency & Accountability

Like many credible assessment tools, the Poverty Footprint requires a public report.  Communicating impacts helps the company follow-up on the findings and commitments. It also helps build trust and long-term relationships between a company and civil society partners to lay the ground-work for future collaboration.  In an era of information and data transparency, companies are future-proofing their business by proactively disclosing their risks and opportunities when it comes to impacts on people.

This post was originally published on the Business Fights Poverty blog. More information on the Poverty Footprint can be found here

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