Business & Human Rights Resource Centre
Author: Ed Marcum, Managing Director, Working Capital Fund
19 Aug 2020
Read on BHRRC Website: https://www.business-humanrights.org/en/blog/covid-19-an-opportunity-for-equality/
COVID-19 has highlighted and exacerbated the gap between the haves and have nots and laid bare inequity and injustice on a global scale. In western countries, low income “essential” workers and more vulnerable migrant and communities of colour have been disproportionately impacted. In the United States, workers with few options and limited social protection have had little choice but to continue work in extremely dangerous conditions, in industries like meatpacking – leading to claims of conditions tantamount to modern slavery or forced labour. According to reports tracked by the BHRRC, the crisis has also devastated millions of vulnerable supply chain workers in emerging markets, many of whom lack the protection of social safety nets or alternative livelihoods as we have seen orders cancelled, factories shut down and workers released or not paid for completed work. As I write this, the impact of COVID may only gathering steam in emerging markets, with the worst health outcomes yet to come.
COVID-19 has clearly magnified the vulnerability of millions of workers and stressed the need to create new mechanisms that put workers first and ensure safer workplaces and more resilient supply chains.
Much of this exploitation is systemic, deeply entrenched within an inequitable global economic system that pre-dates COVID. But where there is movement and change, there is opportunity. COVID-19 has clearly magnified the vulnerability of millions of workers and stressed the need to create new mechanisms that put workers first and ensure safer workplaces and more resilient supply chains. ‘Building back better’ has become a rallying cry for governments, private sector, and civil society organisations, building momentum around claiming this opportunity to re-establish more resilient societies. While we remain in fluid and uncertain times, amid the fog of the pandemic we can already see a number of new developments and trends emerging. These trends offer the potential to create significant change to reduce worker vulnerability and inequality.
‘Building back better’ has become a rallying cry for governments, private sector, and civil society organisations, building momentum around claiming this opportunity to re-establish more resilient societies.
- Heightened Public Awareness on Inequality and Economic/Social Injustice – Creates a moment in time to shift thinking and push for meaningful and durable reform.
- Greater Attention to Supply Chain Disruption Risk – COVID has demonstrated the fragility of business supply chains, with most companies negatively impacted by supply chain disruption as a result of the pandemic. Supply chain opacity and lack of visibility has led to exposure and risk, ultimately resulting in confusion and negative financial impact. In response, there will undoubtably be increased demand to make supply chains more manageable and transparent. This improved visibility into supply chain actors and activities will open more avenues to hold corporations more accountable to improve worker outcomes, by cutting through the current status quo of opacity to build a more transparent alternative.
- Acceleration Towards Digitisation – Supply chain management has been moving away from highly inefficient, often siloed, and fragmented processes, towards more streamlined and integrated approaches. Adherence to social distancing imperatives will increase the importance of digitised data in the form of sensors, worker-facing technology, remote information gathering audits, digital training, digital claims and certifications. This creates the opportunity to capture more meaningful information about working conditions at scale which – as this BHRRC forum on the limitations of social audits helps to underscore – has historically been a critical missing piece of larger systemic worker reforms.
- Worker Safety Prioritised as a Shared Security Imperative – Ensuring that workers stay COVID free and reduce the spread of broader contagion is in the collective best interest for all. Greater priority and adherence to health and safety solutions for workers during this pandemic (workplace cleanliness, design/spacing, virus detection, etc.) creates an opportunity to formally align safe workplace environments with often ignored standards.
- Increased Workplace Monitoring – In the name of risk reduction, we are already seeing a concerted move towards greater workplace surveillance through technology for contact tracing, geo-fencing and health data monitoring . While this offers obvious potential health benefits to workers, it also risks normalising and accelerating highly controversial existing anti-privacy trends. For these efforts to be productive, it will be important to understand which concessions are acceptable and necessary and what legal and regulatory safeguards need to be put in place.
- Stronger S in ESG – As we have seen with recent allegations of poor working conditions within Boohoo’s supply chain , emphasis on the social considerations of business decisions and how they affect worker welfare, communities, and inequality are now front and centre. As investors pressure corporations to more rigorously manage and report on social performance, there will be greater opportunities to further a worker’s agenda.
- Push Towards Mandatory Human Rights Due Diligence – scepticism that corporate social responsibility initiatives and ESG investor pressure are insufficient and fall short of momentum, have driven a move away from voluntary market oversight and towards government mandated regulation in the name of shared prosperity and shared security.
If we do not take advantage of this moment, we may backslide into a two-tier society where the economic inequality, health and safety risks for those less fortunate are accepted as a necessary reality.
At the Working Capital Investment Fund (WCIF) – an early-stage investment fund focused on addressing the systemic exploitation of the vulnerability of marginalised workers – we see this crisis as an opportunity to further accelerate a transition away from the broken and limited approaches of business to monitoring, upholding and responding to worker’s rights and to begin to shift to a new way of measuring and managing. In the start-up space, we have never seen more attention and entrepreneurial innovation targeted towards workers. The elusive ’Total Addressable Market’ for products that aim to address better outcomes for low income workers, is beginning to look significantly more attractive as corporate buyers start to respond to the pressures outlined above. At WCIF, we are planning to take advantage of this by investing in and scaling the next generation of innovations to protect workers and to contribute to the establishment of new standards and best practice in the process.
Current public sentiment and recognition about inequality is important but may fade. If we do not take advantage of this moment, we may backslide into a two-tier society where the economic inequality, health and safety risks for those less fortunate are accepted as a necessary reality. But if we collectively take advantage of this moment and ‘build back better’, the future could look a lot brighter for workers and business alike.