Sustainable Human Development is at Risk - HDR 2018

Wide inequalities in people’s well-being cast a shadow on sustained human development progress

According to the latest Human Development Index, people living in the very high human development countries can expect to live 19 years longer, and spend seven more years in school, than those living in the group of low human development countries.

New York, 14 September 2018 – Norway, Switzerland, Australia, Ireland and Germany lead the ranking of 189 countries and territories in the latest Human Development Index (HDI), while Niger, the Central African Republic, South Sudan, Chad and Burundi have the lowest scores in the HDI’s measurement of national achievements in health, education and income, released today by the United Nations Development Programme (UNDP).

The overall trend globally is toward continued human development improvements, with many countries moving up through the human development categories: out of the 189 countries for which the HDI is calculated, 59 countries are today in the very high human development group and only 38 countries fall in the low HDI group. Just eight years ago in 2010, the figures were 46 and 49 countries respectively.

Ireland enjoyed the highest increase in HDI rank between 2012 and 2017 moving up 13 places, while Turkey, the Dominican Republic and Botswana were also developing strongly, each moving up eight places. All three steepest declines in human development ranking were countries in conflict: the Syrian Arab Republic had the largest decrease in HDI rank, falling 27 places, followed by Libya (26 places), and Yemen (20 places).

Movements in the HDI are driven by changes in health, education and income. Health has improved considerably as shown by life expectancy at birth which has increased by almost seven years globally, with Sub-Saharan Africa and South Asia showing the greatest progress, each experiencing increases of about 11 years since 1990. And, today’s school-age children can expect to be in school for 3.4 years longer than those in 1990.

Disparities between and within countries continue to stifle progress.

Average HDI levels have risen significantly since 1990 – 22 percent globally and 51 percent in least developed countries – reflecting that on average people are living longer, are more educated and have greater income. But there remain massive differences across the world in people’s well-being.

A child born today in Norway, the country with the highest HDI, can expect to live beyond 82 years old and spend almost 18 years in school. While a child born in Niger, the country with the lowest HDI, can expect only to live to 60 and spend just five years in school. Such striking differences can be seen again and again.

“On average, a child born today in a country with low human development can expect to live just over 60 years, while a child born in a country with very high human development can expect to live to almost 80. Similarly, children in low human development countries can expect to be in school seven years less than children in very high human development countries,” said Achim Steiner UNDP Administrator. “While these statistics present a stark picture in themselves, they also speak to the tragedy of millions of individuals whose lives are affected by inequity and lost opportunities, neither of which are inevitable.”

A closer look at the HDI’s components sheds light on the unequal distribution of outcomes in education, life expectancy and income within countries. The Inequality-Adjusted Human Development Index allows one to compare levels of inequality within countries, and the greater the inequality, the more a country’s HDI falls.

While significant inequality occurs in many countries, including in some of the wealthiest ones, on average it takes a bigger toll on countries with lower human development levels. Low and medium human development countries lose respectively 31 and 25 percent of their human development level from inequality, while for very high human development countries, the average loss is 11 percent.

Courtesy:-HDR 2018

Agents of "Unethical Globalisation" advocating for 'Ethics' in Marketing now

Agents of "Unethical Globalisation" advocating for 'Ethics' in Marketing now

Globalisation has vastly increased the length and complexity of supply chains over the past few decades. At the same time as drawing more communities into the global economy and playing a role in development, it has dispersed the negative impacts of business activities on people and the environment to nearly every corner of the world. Those countries which underwent their industrial revolutions in the 18th and 19th centuries have had centuries to build regulatory and social norms in response to excesses, ensuring that most businesses behave in a relatively responsible manner. However, globalisation has rushed in an era of industrialisation in many emerging markets at a pace that has made it hard for local governments, businesses and civil society to adjust to while adequately protecting local communities.

This phenomenon places a moral responsibility onto multinational firms, to ensure that standards viewed as acceptable in advanced economies are applied in the markets from which they source. And from a pragmatic point of view, the globalisation of communications and media means that people across the globe have real-time access to stories coming out of the developing-world communities which produce their clothes, smart phone components, food and so on. Preventable disasters like the Rana Plaza factory collapse in 2013 can hit a brand’s bottom line (and that of its shareholders) hard. Positive stories, such as where a firm empowers the women in its supply chain to grow their businesses, can give a brand a reputational boost while improving supply chain resilience. There are also very rational business continuity reasons for responsible conduct, such as the threat to agricultural production in some regions from climate change, and growing competition for skills or labour in certain sectors.

Governments and international organisations have exerted increasing pressure on businesses to be responsible over the past decade. Sustainability reporting has become an industry in itself: the number of mandatory and voluntary reporting instruments has risen from 60 in 2006 to 383 in 2016, with the number of countries covered rising from 19 to 71.1 Some advanced economy regulators are also extending the applicability of their regulations onto a global scale—with regulations such as the Conflict Minerals Rule (Dodd-Frank Act, Section 1502) in the US and the Modern Slavery Act in the UK generating a worldwide ripple effect. New compliance risks are constantly emerging as NGOs and activists highlight scandals and governments attempt to close loopholes—but a reactive approach is not good enough. Firms need to get out ahead of the regulatory wave and show leadership in improving supply chain transparency and management. Those who do will find it does not just mitigate risks, but also generates opportunities. Consumers and business customers are paying attention: in every market we surveyed, customers were cited by firms as one of the top influences driving them to make their supply chains responsible, with a greater perceived impact than even regulators.

The first step is to admit you have a problem

This study confirms that corporate responsibility over supply chains is becoming more prominent on the radars of business leaders. More firms are integrating it into their core operations, as senior executives and boards come to see the value to their business of a more responsible approach.

Recognising a corporate responsibility towards the social and environmental impact of supply chains is an important first step, but the complexity of today’s global supply chains makes this challenging. We spoke to firms that had thousands, and in one case millions, of suppliers. Even small firms are much more likely to have cross-border value chains than was the case a generation ago. Large multinational businesses face a bewildering array of constantly-evolving regulatory and reputational risks. Dealing with these requires sophisticated systems with appropriate internal structures, well-designed supplier management systems and in many cases, outside support. The scale of the challenge is not yet well recognised. In section one, “confidence and complacency”, we present survey findings showing that executives had unwarranted confidence about how responsible their supply chains were. A significant minority of businesses had also allowed supply chain responsibility to slide as a priority in the past five years. There was a bias towards issues connected to more “obvious” material business risks and opportunities, while topics which were harder to quantify or which only affected sub-sets of the population were often neglected.

Time to stop pointing fingers

In our discussions with representatives of corporations, financial stakeholders, regulators, international organisations and NGOs, it was striking how often each blamed the others for constraining, or failing to adequately support, their efforts to be responsible. Company executives also pointed to the difficulties of fully understanding and monitoring their supply chains—something which some experts from academia and consultancy disputed, given the possibilities presented by digital technologies and outside specialists.

Companies seeking credibility with an increasingly well-informed and critical consumer base need to stop making excuses and get out ahead of this issue. They must recognise that in the digital era, they can neither control the agenda, nor who can access information on their supply chains. Pressure on them for transparency and responsibility will only increase. But the responsibility does not lie on the corporate sector alone. Corporations are best-placed to understand and take action on their supply chains, to mitigate both financial and ethical risks. They must therefore play the biggest role, but the other parties involved in setting, monitoring and enforcing standards must also consider how best to incentivise and support companies along this path. This report outlines key elements of best practice, illustrated with real-life case studies, to guide all stakeholders on this evolving journey.

A blueprint for better supply chains: understanding motivations and introducing best practice

Section two, “cultivating a responsible corporate culture”, looks at what influences and motivates businesses to uphold social and environmental standards, identifying the levers held by regulators, multilateral organisations, financial stakeholders, business customers, consumers and civil society watchdogs—as well as how these influences interact. We also ask which firms fall through the gaps, and how a responsible business culture can be motivated in such cases. Defining best practice on responsible supply chains is not easy, and there is inevitably nuance across industries and even from firm to firm. Yet lessons can be learned from the experience of leading firms and from experts on the subject. In section three, “more than words”, we identify some key elements of best practice with regard to internal management, supplier engagement and working with third parties. There is still plenty of disagreement over what role corporations and other stakeholders should play in ensuring responsible supply chains, and where the obstacles lie. In this white paper, we attempt to cut through the noise. Our argument is that there should be “no more excuses”: in a world in which 69 of the world’s 100 largest economic entities are corporations rather than countries, responsible supply chains are a moral imperative. In the context of a growing backlash against globalisation, rising consumer expectations and the rising economic impact of climate change, they are increasingly a business imperative. The millennials being recruited into corporations understand this and look for responsible behaviour in their employers; but it is down to today’s corporate leaders to act on it. No more excuses. It is time to embrace the necessity of, and business opportunities presented by, responsible supply chains.

Courtesy:- The Economist Intelligence Unit