MARKET PULSE: Expertise in safeguarding human rights in the supply chain is experiencing a surge in demand, according to Deloitte, which recently boosted its capability through the integration of Leeora Black’s Australian Centre for Corporate Social Responsibility into its risk advisory business and reputation risk and sustainability practice.
Dr Black’s team of four takes Deloitte’s national resilience sustainability practice to about 50 team members.
Risk advisory partner and Asia Pacific sustainability leader Paul Dobson said, with the Australian Modern Slavery Act likely to come into force next year, there will be growth in opportunities around social licence across the board.
“There’s increased appetite for organisations to look into human rights,” he said. “It’s across multiple sectors – with property there’s increased demand – but it’s across the board and that’s part of why [ACCSR’s] Leeora [Black] joined us is to respond to that demand across multiple client sectors and enhance our credibility and get it across to more of our clients.”
Dr Leeora Black established the Melbourne-based ACCSR in 2003 and is globally recognised as a corporate social responsibility and sustainability expert.
“We’ve seen demand increasing in the property sector,” she said. ACCSR has worked in the sector for more than 10 years in the areas of social strategy, social sustainability strategy and reporting.
“But over the last couple of years we’ve started to see that broaden significantly and property development companies are now talking to us about social licence to operate and they’re also talking to us about human rights due diligence.
“We are having more and more conversations and getting more and more requests for proposals on these issues.”
Australian Supply Chain Sustainability School is on the hunt
Sustainable recruitment agency Talent Nation managing director Richard Evans echoes these sentiments. He’s working with the Australian Supply Chain Sustainability School on a new role to grow its membership base.
“There’s a huge amount of interest in the work they are doing from the member organisations and certainly the success in the UK,” he said. “It’s a really good indication that there’s a lot of growth coming for them.”
With modern slavery legislation imminent, it’s a hot topic for business.
“It’s certainly on the horizon for a lot of organisations, trying to work out what happens there,” he said.
Dr Black’s team recently completed a review for a major property development company looking at various commodity supply chains and helping them to identify where the major risks were and how to place some controls around them.
“We know that the construction industry is one of the high-risk sectors for human rights problems in the supply chain,” Dr Black said. “Where does the cement come from? Where do the tiles come from? Where does the timber come from? Were people or the environment damaged in some way in the production of the various components that go into a property development?” she asked. “Also the forthcoming Modern Slavery Act will apply to operations as well as supply chains so we need to look at labour supply chains not just product supply chains.
“We expect to see ongoing work in the area of strategy and reporting but increasing amounts of work in the area of human rights in the supply chain and social licence work.”
The proposed Australian Modern Slavery Act, modelled on the UK’s laws, will compel large companies to report annually on their efforts to safeguard supply chains from slavery. It’s likely that companies with more than $100 million in annual turnover will be obliged to make “slavery statements”.
“That is going to apply to approximately 2000 organisations and then that works its way through the supply chain so every organisation of any large size will have to consider and answer questions internally which means they may need assistance in the area,” Mr Dobson said.
To prepare for the increased workload, Deloitte has boosted its national resilience sustainability practice with Dr Black’s team of four and now has about 50 team members.
“We are looking to grow that,” Mr Dobson said. “We don’t just put numbers in terms of heads but we are looking to grow definitely in the short to middle term – that’s the whole reason why Leeora’s joined us because we have growth aspirations.”
Mr Dobson said demand was coming from across the board in terms of geographic region.
“The larger markets are in Sydney and Melbourne, the east coast primarily but there’s also opportunity in the west and we do a lot of work in the west.”
While industries such as mining and financial services have been grabbling with these issues for a decade, other industries are newer in their approach.
“The type of growth we are looking at is broader than the property development industry and I think the main reason we are seeing increased demand for sustainability and corporate responsibility services is that boards and senior management teams have got the memo,” Dr Black said.
“They understand the relevance and the risk attached to these issues in a way they were not five or 10 years ago. They have increased their sophistication and their understanding very much at the behest of investors who are demanding this type of thinking and long-term approach to risk management. It’s really being driven by corporate Australia.”
Mr Dobson said corporate social responsibility was not a “nice to have”, “bolt on” or “after thought” but crucial for success. “We’re all about helping our clients respond to the challenges and opportunities that they have and bring the right combination of skills to that across sustainability and CSR.”
According to Dr Black, the expanded team brings global, leading-edge expertise in the area of social licence to operate. “To the extent of my awareness – obviously I can’t know everything about what the other companies are doing – we have a great competitive advantage with that.”
Last minute rush to hire before Christmas
Talent Nation is experiencing a busy period as the year draws to a close and is seeing more jobs activity particularly in Perth.
“It certainly feels buoyant out there,” said managing director Richard Evans.
“There’s this period now pre-Christmas where clients realise they need to act, so any roles that have been on the backburner for the last month or so, it’s almost reaching decision point where they have to do something about it,” he said. “If they don’t do something now, they are talking March/April before they get someone into the role.”
The agency has just filled a couple of roles in responsible investment and is working with the Australian Council of Recyclers to find a new chief executive officer. The agency has an environment and sustainability manager role in the energy space in Melbourne, a group sustainability manager for a resource company in Sydney, and a global environment lead for a chemical company based in Melbourne.
Perth bounces back and tier two in demand
“We are seeing a lot more activity happening in Perth as well,” Mr Evans said. “It certainly feels like there’s a bit of a resurgence happening over there – some infrastructure projects coming off and a bit more activity.”
Second tier engineers in demand
Mr Evans said second tier engineering and civil contractors are more in demand. “The tier ones, they’re focussed on the major infrastructure projects and that’s really opening up the market for the tier twos – for the slightly smaller projects – the $100million to $200 million projects. If you look at the tier one they are working on projects at $500 million and above and not really addressing anything beneath that.”
Cultural fit has become a key requirement. “Certainly more emphasis is being placed on that by clients,” Mr Evans said. “So they want the technical capability but then the ability to gel with the team and to really have that cultural fit is getting a lot more focus these days.”
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