Insights // Industries
By Caroline DeSantis - 15th September 2017
“Transparency is the primary contemporary value.” This declaration comes from The Responsible Corporation by Yvon Chouinard and Vincent Stanley, who through their work with Patagonia became pioneers in Corporate Social Responsibility (CSR). More and more, their statement gets backed up by data and studies. With today’s socially-savvy shopper, sustainability is no longer just a trend, but a necessity for brands to thrive. However, when so many companies are tooting their horns about the good they are doing with CSR, how is it possible to figure out who is undertaking what they say they are?
The common way to prove the credibility of a brand’s commitment to social responsibility has been certification by third-parties like Fairtrade, Rainforest Alliance, UTZ, and others. When a customer finds these logos on a product, it ensures that all steps of the production process meet standards regarding living wages, labor conditions, investment in community development, and sustainable farming. While these certifications have been the benchmark of ethical sourcing and production for over twenty years, lately there has been a trend for companies to come up with their own ethical standards to follow.
Companies like Sainsbury Tea and Mondelez International have recently launched their own certification initiatives. In Sainsbury’s case, its pilot program, “Fairly Traded,” looks very similar to the third-party models. Sainsbury still offers a fair wage, social premium for community investment, and training for better yields. The key difference is that Sainsbury places a heavier emphasis on tailored training for specific needs and the company, not the workers chooses how the premium gets spent, raising concerns because it could impose something the community might not need.
Then there are also the brands who take social action without labels, like Levi Strauss and their “Improving Worker Well-Being” initiative or Chobani’s efforts with immigrants and refugees. The chocolate producer Domori, which is a part of the illy Group SpA does not go the traditional route of Fairtrade because a farmer needs to pay application, inspection, and renewal fees ranging from $2,000 to $10,000 to be certified. Instead, Domori invests in the farmers themselves by training them to cultivate Criollo beans, the best in the world.
From the start, Domori has had a joint venture with the Franceschi family in Hacienda San Josè, Venezuela. These close long-term relationships where Domori pays profitable prices are crucial because Domori is asking producers to grow a low-yield bean variety that represents 0.001% of the cocoa market. Domori could not create disruptive quality chocolate if they did not encourage and reward farmers who grow exceptional beans.
While the companies are taking actions to ensure the sustainability of their supply chains, the individual efforts to define their own standards have drawn much criticism. There is a certain inherent skepticism when anybody self-certifies because there is a possibility of presenting a false image. Third-party certifications are credible because they require objective auditing to make sure all stakeholders are following the same standards. Also, with overlapping standards it is confusing to know who is doing what. While it’s hard to keep a secret in the smartphone and social media driven world, it is only through exceptional storytelling about their sustainable efforts that companies can create customer trust.
Storytelling is the way to show the differentiation between one company and another. However, according to Vincent Stanley, Director of Philosophy at Patagonia and a mentor during the 2017 Italia Innovation Program, “Companies don’t take it far enough. I think real storytelling is not going to our customers and seeing how they want us to look and then projecting that back on them. I think real storytelling comes from identifying what are the unique aspects of your company, its DNA. Sharing your strengths and weaknesses.” Not only does extensive sharing connect companies to their customers, but it also create an external and internal discipline for the company.
Companies can look to the communications Stanley started at Patagonia as an example of how to share transparency. Whether it’s their blog, Footprint Chronicles, which shares extensive information about where products come from and the resources that go into them, or their Cleanest Line blog informing on why paid maternity leave has helped their company; Patagonia shares everything about the inner workings of the company, which creates authenticity.
For consumers, navigating through certification labels requires some work. It is important to educate oneself and look at how much a company shares. Hopefully, with greater transparency, communities and companies will understand how to better address the social and environmental factors they face.
It is a bold move to not follow the accepted practice. It becomes not only an opportunity for third-party certifiers to look at themselves and see how they can improve but also an occasion for companies to push the boundaries of communication, delivering a tailored and comprehensive message that allows them to connect directly with their unique customers.