The vast majority of companies are trying to convince us that they’re “good” for the world and the people in it. Some do this by starting Corporate Social Responsibility (CSR) programs or engaging in cause marketing, others establish themselves as social enterprises or pursue one of the many available certifications.
It’s easy to take these gestures at face value, but accurately determining the goodness of actors and their actions depends upon a network of information rather than a single fact.
You can’t confidently call an element of a thing good until you compare it to a corresponding element in a similar thing – until you have external context. For example, it seems good that X notebook company uses 10% recycled paper until you see that Y notebook company uses 50% and Z notebook company uses 100%. You need external context to be able to judge the goodness of using 10% recycled paper.
Similarly, you can’t call an entire company good until you’ve examined all of its parts – until you have internal context. For instance, it is good that X company switched from Styrofoam peanuts to biodegradable packaging materials, but it’s not good that they pay workers illegally low wages. The company might be doing something good by cutting back on waste, but its transgression against the workers makes dubbing it a good company questionable.
For consumers interested in good products that have a positive impact on the world and the people in it, external context is readily available through various benchmarking methodologies and indices (though it’s a herculean task to slog through it all to come to any meaningful conclusion). Substantial internal context, on the other hand, is only available in the form of a B Corp certification.
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The Fruit of (Partial) Knowledge
People worry about “greenwashing” and “causewashing” – when a company misrepresents itself or its activities to convince consumers that it’s more environmentally friendly or socially impactful than it actually is. I think a bigger threat is companies that tell the truth – but only part of it – and consumers that don’t bother to seek the whole story.
Consider the Reputation Institute’s Global CSR RepTrak® 100 list, which identifies the companies with the best reputations for CSR among the general public. Apple is number seven on the 2015 list. Their website lists “Environment” as an “Apple Value” and details the company’s quest to “leave the world better than we found it.” It describes how Apple:
- Partners with The Conservation Fund to create and protect the types of forests used in their packaging
- Uses 100% renewable energy for its U.S. operations and data centers
- Recycles its wastewater
- Designs its products “with cleaner, safer materials to reduce and eliminate” the toxins commonly found in electronics
Unfortunately, there’s more to the story. As a consumer electronics brand, Apple relies on rare earth elements. Though the process of refining these elements can have ghastly environmental impacts, they’re used in a variety of products across industries. The infographic at right, courtesy of CNET, provides a sense of how Apple uses them.
In 2009, China produced 95% of the world’s supply of rare earth elements. A large part of this production happened in Baotou, a city of 2.5 million that relies on the mining and refining of these elements for its livelihood. To the west of Baotou is a “tailings pond” big enough to see on Google maps that contains the byproducts of the extraction process. Since the reservoir that holds the radioactive black sludge wasn’t lined properly when it was built, it’s leaching radioactivity into the groundwater. The local population has suffered from increased rates of cancer occurrence, devastated farmland, weakened teeth, respiratory diseases and other maladies.
There are other operations where rare earth elements are mined in less harmful ways, but the process is more costly and companies conducting it haven’t been able to compete. This could be in part, one assumes, because the companies buying rare earth elements aren’t willing to pay a premium.
I’m not saying that Apple’s claiming environmental concern is false or that Apple alone is to blame for the gigantic toxic lake. I am saying that their reliance on these damaging practices tempers how one might otherwise describe and understand their operations, but they leave it out of their story. Without this piece of internal context, the reality of Apple’s impact on the environment is not understood. To phrase it strongly, it’s a lie of omission.
No Context for Clothes, Not Enough for Certifications
Raz Godelnik, Assistant Professor of Strategic Design and Management at Parsons The New School of Design, describes how H&M commits a similar transgression in its 2013 sustainability report. The company fails to compare the 3,047 tons of unwanted garments it’s collected to recycle with the 550 million garments it sells annually. We don’t know how close they are to “closing the loop” in textile manufacturing because we don’t know whether 3,047 tons is a hugely significant portion of 550 million garments or a drop in the bucket. We have no context.
It’s even possible for incomplete understandings to accompany certifications. A four-year study by the Fair Trade, Employment and Poverty Reduction Research Project seeking to understand how Fairtrade policies have impacted the world’s poorest workers found that “wages are typically lower, and on the whole conditions worse, for workers in areas with Fairtrade organisations.”
While Fairtrade models ensure the fair compensation of producers, producers don’t always pass the profit on to their workers. In some cases, even community projects implemented with the “social premium” consumers pay for Fairtrade products don’t benefit workers: “In one Fairtrade tea co-operative the modern toilets funded with the premium were exclusively for the use of senior co-op managers.”
Once again: I’m not saying that the Fairtrade certification is bad, or that it hasn’t accomplished good things. I am saying that it doesn’t necessarily signify that all of the workers contributing to production are adequately compensated. It doesn’t tell the whole story.
B Corp to the Rescue
The moral to the story is this: there is always more to the story. That’s not necessarily bad – some details are irrelevant, uninteresting or unsuited for inclusion in a particular narrative or medium. Besides, even conscious consumers have things to do and places to be and don’t always have time for the entire story.
- Includes performance across environmental and social areas, investigating a wide breadth of considerations. This contrasts with proprietary sustainability reports or very specific calculations that can leave certain stones conveniently unturned.
- Weights the extent to which each component of a businesses’ operations positively or negatively impacts its total score, preventing individual good or bad practices from influencing opinions in a manner disproportionate to their actual impact.
- Reduces the components of the whole story into an easily sharable, comparable, comprehensible number.
- Shares the median score for each category of assessment – Environment, Workers, Customers, Community and Governance – alongside a specific company’s score to provide a rough sense of external context.
Although the B Impact Assessment doesn’t capture absolutely everything, it is still able to capture – and relay – a vast amount of internal context with extreme simplicity. It gives consumers the holistic, all-things-considered view of a company’s operations and helps them ground their answer to the question “Is this a good company?”
So Now What?
The significance of this power can only be understood and appreciated when consumers forego easy conclusions and insist on hearing the whole story, or at least more of it. This won’t happen overnight, but anyone who cares about conscious consumption can help encourage more discernment. Here’s how:
Look for third-party certifications when possible – read Are You Certifiable? 4 Reasons to Get Third-Party Certified to learn more!
When a particular initiative is touted as awesome or decried as horrific, do a quick Google search to see how similar companies stack up
Don’t let a single fact be the basis for your opinion of a brand – get more info, even if your search isn’t exhaustive
When a friend or colleague condemns or lauds a particular company, ask questions to help them understand the importance of context (“I agree that using organic cotton is great. Do you know if they use it in all of their products or only some?” or “It’s cool that they use 10% FSC-certified paper – how does that compare to the industry standard?”)
When in doubt, look to B Corps
By holding ourselves to more rigorous standards and helping others understand the importance of context, we can transform the way companies behave. The more clearly we can send the message that disparate claims of goodness without context are not enough, the more powerfully we can impel businesses to act responsibly across every area of operation.
Curious how your company stacks up in a holistic assessment? Take the Quick Impact Assessment from B Lab to find out!