Trade and investment have long been powerful drivers of growth and development. However, recent years have seen growing questioning around the benefits of globalisation and increased demands for responsible business conduct (RBC) in global markets to prevent and mitigate business-related adverse impacts on people, the planet and society. At the same time, trade and investment policies and agreements can be used to facilitate and incentivise RBC among traders and investors.
Promoting policy coherence and seeking to further integrate trade, investment and RBC is, therefore, key to building enabling policy environments that drive, support and promote responsible business practices; which will enable countries to thrive in the global economy and ensure economic, social and environmental progress.
International trade and investment have long been powerful drivers of growth and development, enabling poverty reduction and convergence in living standards across countries. Recent years however have seen growing questioning of international trade and globalisation, and increasing demands for better management and integration of environmental and social considerations in global value chains (GVCs). The COVID-19 crisis has brought these questions to the fore and reignited debates about the ability of GVCs to ensure the security of the supply of essential products and generate benefits for all. Promoting policy coherence between responsible business conduct (RBC), trade and investment, and mainstreaming RBC into GVCs can provide an avenue to make GVCs more resilient, and sustainable, and ensure that the gains from globalisation are more fairly distributed.
This paper explores the links between RBC and GVC resilience in the context of COVID-19 and other threats such as climate change. It shines a light on the relationship between business practices, GVC disruptions, and environmental and social impacts, and identifies practical RBC-based options to build resilience to a broad range of salient risks. This paper also proposes priority actions for businesses and governments to further integrate trade, investment and RBC policies and practices, and develop partnerships to foster trust in global markets, resilience and sustainability.
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