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Written by:

Venla Roth, Head of Unit at Office of the Non-Discrimination Ombudsman / National Rapporteur on Trafficking of Human Beings
Natalia Ollus, Director at HEUNI, the European Institute for Crime Prevention and Control
Rosa Thurman, Director of Investment Programs at Amcham Finland
Isaac Garfunkel, Communications Manager at Amcham Finland

Please click here for info about our May 14 event on tackling forced labor in business supply chains!

Most companies now acknowledge human rights as a business issue. In fact, a global study by KPMG suggests 90% of the 250 largest global companies realize that human rights are critical to business success, and these issues can no longer be left in the dark. (1)

Jarkko Huhtaniitty, Managing Director of HP Finland, says “Being one of the largest technology companies in the world, what we at HP do with our supply chain makes a difference. We simply need to look beyond our own operation to ensure we have an ethical and responsible chain of subcontractors.”

Finnish companies are also increasingly engaged in Corporate Social Responsibility (CSR) and protecting human rights. According to a PwC study, reporting on human rights activities within Finnish businesses has developed significantly in recent years; 47% of companies have identified their human rights risks and impacts and 77% of companies now impose responsibility requirements on their supply chains, 63% actively monitoring them. (2)

Forward-thinking companies understand that CSR not only benefits society, it also brings added business value. Research from Boston College Center for Corporate Citizenship (BCCCC) indicates the number of companies directing corporate citizenship from the C-Suite has increased nearly 75% compared to five years ago.

Kaisa Jungman, Head of Sustainability at Metso agrees, explaining, “We see that taking care of human rights along the whole value chain from procurement to the end product is not only something we are committed to, but also makes business sense. It is also something that is expected from us by our key stakeholders.”

Human rights also matter to investors. EY’s global investor survey suggests 49% of institutional investor respondents will not invest in a company which has a history of violating human rights or whose operations pose a risk for human rights. In addition to this, 44% of them would critically consider their investments had they already invested in a company with the history and risks described above. (3)

FIBS, Finland’s leading non-profit promoter of sustainable business, suggests that up to 81% of companies consider their return on CSR efforts to be at least somewhat higher than the resources used to secure it. Companies also see corporate social responsibility as a prerequisite for continued business viability and its importance is seen to increase in the future.  (4)

According to the PwC barometer, many companies report the most significant issues for their company, including discrimination, excessive work time, living wage and forced labor, both in connection with their supply chains and in the company’s own operations.

Human trafficking for labor exploitation and forced labor also exists in Finland. The Finnish Non-Discrimination Ombudsman, which also serves as National Rapporteur on Trafficking of Human Beings, has reported that there’s more human trafficking in Finland than we’re aware of. The riskiest business sectors include construction, horticulture and berry-picking, food service and cleaning. This has also been shown in research by HEUNI (5).

By addressing exploitation and trafficking, businesses can establish themselves as leaders among their peers. Companies can also take concrete measures to participate in assisting trafficked persons alongside the government. For example, they can provide victims with employment opportunities and enhance their integration experience.

However, challenges remain. Many companies in Finland struggle with their role and responsibilities on the matter. They need clarity on how to report their efforts, boost their reputation and market their brands to key stakeholders, such as clients and prospective employees.

“It’s important to know the emerging risks in the value chain and minimizing them, improving the well-being and employee satisfaction through better management of human rights but also recognizing the link between good sustainability practices and quality,” says Jungman of Metso. During the last few years, Metso has established several processes to develop their supplier auditing and training practices. “For us, it’s essential that we consider a supplier sustainability assessment as an integrated part of our suppliers’ performance evaluations, right next to financials, delivery and quality.”

Jani Alenius, Leader of Climate Change & Sustainability Services at EY told us about various challenges when protecting human rights within supply chains. Many companies, especially in the textiles industry, engage in cooperation such as sharing audit reports and supplier information. Secondly, it’s often difficult for companies to understand which measurement tools should be used. Data collection can be challenging as companies need to have information on its own supply chain while also protecting the privacy of the individuals. Alenius comments, “When businesses want to start engaging in protecting human rights within their supply chains, it’s important to map their human rights impacts first, and then start measuring and tracking them.”

Businesses have an opportunity to lead change in this worldwide issue. By doing so, they may gain greater access to business opportunities, investments and innovation.

Amcham Finland, the U.S. and British Embassies, the National Rapporteur on Trafficking in Human Beings, the Regional State Administrative Agency, the European Institute for Crime Prevention and Control (HEUNI), and FIBS are organizing a joint seminar on human trafficking and corporate social responsibility. The May 14 event, located at Ernst & Young’s beautiful offices in Helsinki, was conceptualized to educate and foster open discussion about forced labor prevention and human trafficking .

Jarkko Huhtaniitty, Managing Director of HP, will discuss the role of human rights within his organization, and share how the California Transparency in Supply Chains Act affects both global and local supply chain management. Paul Gerrard, Campaigns and Public Affairs Director at Co-op (UK), one of the world’s largest consumer co-operatives owned by 4.3 million members, will talk about identifying key risks within supply chains and why it’s in a company’s best interest to go beyond the bare minimum required by regulations. Kaisa Jungman, Head of Sustainability at Metso, will then explain how Metso evaluates its suppliers on sustainability and how they track their corrective actions based on the findings in Metso’s evaluations.

Sources:

1) https://home.kpmg/content/dam/kpmg/campaigns/csr/pdf/CSR_Reporting_2017.pdf
2) https://www.pwc.fi/en/publications/assets/corporate-responsibility-barometer-2018.pdf
3) https://www.ey.com/en_gl/assurance/does-nonfinancial-reporting-tell-value-creation-story
4) https://www.fibsry.fi/wp-content/uploads/2018/05/FIBS_Yritysvastuu2018_Tiivistelma.pdf
5) https://www.heuni.fi/material/attachments/heuni/reports/6KZycU1Lj/HEUNI_report_75_15102013.pdf

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