Poverty represents one of the great challenges of our day. Four billion people live on less than four dollars a day, and hundreds of millions of people are threatened by water and food shortages, which are exacerbated by climate change. For global companies operating in, sourcing from, or searching for new markets in the developing world, poverty driven conflict is a direct threat to the bottom line.

 

Multinational companies have the capacity to drive positive changes in developing countries. Many companies already make an impact through philanthropic programs and public-private partnerships. However, investors, consumers, civil society, and governments are increasingly looking to companies for more active engagement.

 

Among these various constituencies, Oxfam America—a global development organization—seeks not only to change harmful corporate practices, but to leverage the economic, political, and creative power of companies to reduce poverty. Oxfam recognizes that leadership will come from companies that see a financial interest in ensuring stable markets, strengthening suppliers, managing reputational risks, and developing new products and services that benefit the poor. While these practices are not covered by laws, they adhere to voluntary norms and human rights principles—which now apply to companies as well as governments.

 

For Oxfam, best practices begin with efforts to engage and be accountable to corporate stakeholders—affected communities, consumers, farmers, and workers. To these ends, Oxfam calls on companies to:

 

It is not enough for companies to “do” the right thing—they must make their commitments public to underscore a seriousness of purpose and willingness to be held accountable. Alongside individualized

corporate “statements of principle,” companies should endorse global and industry-wide standards and engage employees and stakeholders around these norms.

 

Beyond direct operations, major brands are expected to understand and take responsibility for the life cycles of their products—from field to fork, mine to disposal. Large multinationals are also assumed to exercise influence over their suppliers and distributors, as well as their industry peers, affected communities, and local governments. Many companies have come to promote sustainability and human rights along supply chains. Similarly, companies must ensure that their social and political efforts are aligned with commitments—distancing themselves from harmful lobbying and marketing and undertaking new initiatives to promote stronger governance, respect for human rights, and sustainable practices.

 

In order to ensure compliance with commitments, a company must measure and report on its impacts. To paraphrase UN Special Representative on Business and Human Rights John Ruggie, how does a company know that it is “doing no harm” or respecting human rights if it hasn’t done the due diligence? A range of tools exists today to supplement traditional environmental and labor reviews, including human rights impact studies and poverty footprinting. Using these tools, companies should publicly report on and account for their progress in meeting commitments. These reports serve as platforms for engaging stakeholders and demonstrate transparency and accountability.

 

Multinational companies have the technology, the resources, the connections, and the creativity to innovate new solutions to poverty. These solutions—in the form of new or modified products and services—may be pursued out of commercial interest (for scale and sustainability) but should also be developed in close collaboration with local populations to ensure viability and pro-poor benefits.

 

• How can your company seek to innovate its products and services in a manner that also drives positive social change?
• What reporting measures are most effective in accounting for your company’s progress in meeting commitments? 
• Can consulting with local populations become part of the process in planning for the viability of your company’s community investments?