What does Target 16.7 mean for businesses?
The elements of Target 16.7 should be at the core of any Government, institution and organization. Without responsible, inclusive, participatory and representative decision-making at all levels, we are unable to appreciate the challenges faced by many sections of society nor benefit from their diverse ideas and opinions in finding effective and sustainable solutions.
Moreover, groups that are protected under various UN conventions, declarations and resolutions — including women and children, racial minorities and indigenous peoples, the LGBTI community and persons with disabilities — are often left on the margins with respect to their right to self-determination and to commercial, financial or political participation. All the elements of Target 16.7 should be read together to reflect the interdependencies of transforming all institutions — public and private — and truly empowering and reflecting the citizens and customers they serve.
There are many synergies between Target 16.7 and the other SDGs, especially SDG 3 (education), SDG 4 (health), SDG 5 (gender), SDG 8 (decent work) and SDG 10 (inequalities) and other targets within SDG 16, including reducing violence (16.1, 16.4 and 16.a), protecting human rights (16.2, 16.9, 16.10 and 16.b) and respecting the rule of law and multilateralism (16.3, 16.6 and 16.8).
To be sure, businesses should concern themselves with the recent rise in authoritarianism and populism and the marginalization of many of the aforementioned groups. Similar to Target 16.10 regarding the protection of fundamental freedoms, attacks by a Government against certain groups based on gender, ethnicity, religion, political persuasion or sexual orientation serves as an early warning system of the erosion of civic freedoms and social cohesion. Businesses have a vested interest in supporting effective, inclusive and participatory governance as it promotes the necessary market conditions for businesses to operate and thrive.
The ebbs and flows of progress
- The year 2020, marked the 15th consecutive year of decline in global freedom. The countries experiencing deterioration outnumbered those with improvements by the largest margin recorded since the negative trend began in 2006. The long democratic recession is deepening. (Freedom House, Freedom in the World: Democracy in Retreat, 2021)
- With a global average of 25 per cent women, most parliaments remain male-dominated and women MPs are often underrepresented in decision-making bodies (Inter-Parliamentary Union, 2021)
- Companies with more than 30 per cent women executives were more likely to outperform companies where this percentage ranged from 10 to 30, and in turn, these companies were more likely to outperform those with even fewer women executives or none at all. (Mckinsey, Why Diversity Matters, 2015; Diversity Wins: How Inclusion Matters, 2020)
- Higher diversity (ethnicity, gender and expertise) in management earned 38 per cent more of their revenues on average, from innovative products and services than those companies with lower diversity. (BCG, The Mix That Matters, 2017)
- Companies with gender-diverse boards generally have higher environmental, social and governance (ESG) scores, indicating that companies with diverse boards adopt better sustainability practices. And companies with gender-diverse boards commit fewer financial reporting mistakes and engage in less fraud.
- Only 19.3 per cent of people with a disability were employed in 2019 compared to 66.3 per cent of people without a disability.
How should businesses implement Target 16.7?
There are a significant number of ways that businesses could and should contribute to Target 16.7 within their own organizations and together with Government and civil society. These contributions can include having balanced representation and participation on boards, leadership positions and critical functions of the business. And as we have seen from the recent response to the Black Lives Matter movement, many businesses recognize the need to review their own policies and practices, from recruitment and promotion to products and marketing, to ensure they reflect the many faces and voices in our societies. Many have developed and implemented action plans to address systemic racism and other inequalities within their own organizations and are committed to providing resources and platforms to advance public policy focused on these objectives. And, more recently, we are seeing businesses using their voices to speak out against the rise in brutal and lethal attacks against the Asian community, which has been fueled by populist politicians and extremist groups in the face of the COVID-19 pandemic.
Moreover, during the country consultation process that helped inform this Framework, one of the key themes that emerged across the 14 workshops which explored all of the targets of SDG 16 is the importance for business to promote a culture that fosters diversity and inclusion, including gender equality and participatory decision-making.
To be sure, the UN Global Compact leads initiatives and develops resources to support businesses to become more responsive, inclusive, representative and participatory. These include the Anti-Racist Action for Business; Business Reference Guide to the UN Declaration on the Rights of Indigenous Peoples; Creating an Inclusive Environment for LGBTI Workers Webinar and Guide; Guide for Business on the Rights of Persons with Disabilities, the Women’s Empowerment Principles; the Target Gender Equality initiative; and other essential resources.
There are also efforts by businesses to introduce policies and by Governments to introduce laws requiring greater accountability and disclosure on improving diversity in leadership and in the workplace. Business leaders have increased calls for greater diversity and inclusion within service provider law firms and financial services firms. The United States Securities and Exchange Commission has mandated disclosure relating to human capital resources, a move expected to spur greater disclosure of workplace diversity data. In addition, Nasdaq has introduced rules requiring Nasdaq-listed companies to meet certain diversity and inclusion requirements to remain in good standing with the exchange. In Europe, a European Commission Directive mandating greater gender balance among non-executive directors on boards of exchange-listed companies is under consideration by the European Union Council. And, the United Kingdom has introduced a gender pay gap disclosure requirement.
Here are some ways businesses can take action
Culture and board, committee/management oversight
Establish a culture of ethical leadership that ensures governance and decision-making processes are (where appropriate/necessary) consultative, including with employees, investors, environmental/ human rights organizations and trade unions. Disclose whether stakeholder consultation is used to support the identification and management of economic, social and environmental risks and opportunities.
Board, committee and management composition
Ensure nomination and selection processes are consultative and inclusive. Disclose composition of executive and non-executive members including factors such as competencies, gender, minority groups and other stakeholder representation.
Education and policies
Develop policies and training for all employees and suppliers that promote diversity and inclusion and equal opportunity at all levels of the business.
Develop, implement, monitor and adequately resource internal grievance mechanisms through which employees and external parties can report any concerns related to diversity, equity and inclusion. Encourage engagement with environmental/human rights organizations, employees or trade unions.
Include diversity composition and gender pay gaps at all levels of the business in public disclosures in order to provide greater transparency and promote action.
Board/management oversight, culture, strategies, policies, operations and relationships
Lead, promote and support advocacy efforts to address systemic issues and empower individuals with respect to access to education, finance, housing and employment.
Lend expertise in building the capacity and infrastructure of local/national governments to encourage diverse representation at all levels of commercial and political participation.
Collective action and partnerships
Work with Global Compact Local Networks, industry associations and civil society organizations to build a coalition of support for more responsive, inclusive and participatory representation that is more reflective of society. For instance, see the Global Compact Network UK Black Lives Matter & Business Series and Report.
Institutions, laws and systems at the international, national and municipal levels
Here are some ways businesses are taking action
Alliance for Global Inclusion
The alliance is a one-of-a-kind coalition founded by industry peers and is committed to helping build an equitable and just tomorrow. Combining the collective power and resources of global organizations, the coalition will work collectively to bring inclusivity and full equity to the workplace. (Source)
- Business Calls to Respect Free and Fair Elections
Business and labour leaders have, in recent months, been outspoken in calling on Governments to respect the results of elections that have taken place in their countries. In Myanmar, for example, the AFL-CIO issued a statement calling for the restoration of democracy following the military coup. In the United States, ahead of the 6 January electoral college vote to certify the results of the 2020 election, business leaders, individually and collectively, issued statements calling on Congress to respect the results of the election and vote in favour of an orderly and peaceful transfer of power. (Source)
- Company-Community Relations Toolkit
The Company-Community Relations Toolkit was developed by the International Council on Mining and Metals (ICMM), an international organization comprising 27 mining and metals companies and 38 regional and commodities associations. The Toolkit provides tools for measuring the level of community support for mining projects through a five-step assessment process and based on the result of the assessment, provides steps for proposing actions to improve relationships where necessary. These actions also emphasize the process of determining if community and stakeholder perceptions on the project differ and if so, how to manage expectations from both parties. (Source)
- Diversity Targets Tied to Executive Compensation
The footwear brand Nike has laid out a five-year roadmap to creating a more diverse and inclusive workforce. Nike will tie its executive compensation to the company hitting its 2025 goals in deepening diversity and inclusion throughout its workforce, protecting the planet and advancing ethical manufacturing. By 2025, Nike aims to achieve 50 per cent representation of women in its global corporate workforce and 45 per cent representation of women in leadership positions. It’s also targeting 35 per cent representation of racial and ethnic minorities in its United States workforce by 2025 and investing $125 million to support businesses that work to “level the playing field” and address racial inequalities. (Source)
- Investing in Diversity in TV Shows and Films
Streaming platform Netflix has announced a $100 million fund to advance diversity on screen and behind the camera. Over the next five years, the company will invest in external organizations with a strong track record of advancing the success of underrepresented communities in the TV and film industries as well as in bespoke in-company programmes designed to help Netflix identify, train and provide job placements for up-and-coming talent. The pledge comes after Netflix unveiled its first comprehensive study of diversity and inclusion in its film and series programming. (Source)
- Policy Recommendations for Secure Elections
Microsoft recently published a set of policy recommendations and suggested actions Governments can take to secure elections. These recommendations were made as part of Microsoft’s Defending Democracy Program and include increasing access to absentee voting and enabling curbside or portable voting solutions without being tied to a single polling place. The company also called on the election community to be part of the discussion on acceptable behaviour in cyberspace and join multi-stakeholder initiatives like the Paris Call for Trust and Security in Cyberspace. (Source)
- Target Gender Equality
Target Gender Equality is a UN Global Compact initiative supporting companies to set and meet ambitious targets for women’s representation and leadership. The initiative focuses on deepening implementation of the Women’s Empowerment Principles and strengthening contribution to Target 5.5 of Sustainable Development Goal 5, which calls for women’s full participation and equal opportunities for leadership, including in economic life, by 2030. (Source)
- ‘Women on Par’ Project to Promote Women’s Political Participation
The Colombian gas company Gases de Occidente launched a network with local non-governmental organizations in the Valle del Cauca region to promote women’s political participation and gender-sensitive public policy. One result of the impact of armed conflict in this region is that only 13 per cent of people elected by popular vote are women. Since 2017, this network has trained more than 900 women in workshops, forums and events to empower them to run for office. In the 2019 local elections, this network succeeded in having the gubernatorial candidates sign on to a common platform for Youth, Women and Peace, and 31 women ran for elected office. (Source)
Some industries that could/should contribute to achieving Target 16.7
Responsive, inclusive, participatory and representative decision-making at all levels is inherently relevant to all industries and functions. All businesses should ensure that diverse ideas and opinions are reflected throughout the organization to deliver more sustainable and thoughtful outcomes and reflect the communities and markets they serve.
Some intersections with Target 16.7 and the Ten Principles, UNGPs and SDG16+
There are many synergies between Target 16.7 and the Ten Principles of the UN Global Compact; the SDGs, especially:
- Business Calls to Respect Free and Fair Elections