A "Good for Development" Company Mark: A Good Idea?
The Overseas Development Institute has proposed a new "Good for Development" (GfD) Mark that recognises companies that are delivering development gains through their core business: creating jobs, bringing investment capital, training workers, using local suppliers and fostering small and medium enterprises. The idea is summarised here, and elaborated here (including the indicators upon which the Mark could be based).The Mark will measure, communicate and incentivize improved development contributions by businesses, with a particular focus on the Millennium Development Goals. It would be applicable to companies in all business sectors and, argues the ODI, could provide commercial advantage: "It will show a company cares and is active, and that by buying their products, the customer is helping the world's poor".
The idea of a Good for Development Mark is intriguing, but is it a good idea?
According to the ODI, a consultation session held on 8th July revealed several major themes (see below). They are interested in continuing to get feedback, particularly from companies, both about these themes and especially on the detailed criteria for scoring.
In order to facilitate this, they have set up an online survey where you can tell them your views. It can be accessed here. The password is ‘beinggfd’ – all lower case. The survey will close on 28th August.
If you would like to receive further updates as they develop this proposal, contact Geoff Knott or Karen Ellis.
Emerging Themes from GfD consultations: ODI Summary
1. Positive support for the need for such a Mark
There was positive support for such a Company level Mark:
“There is a need for a Company Standard. Product level marks now have lot of cost which eats greatly into profitability of a product. The concept will communicate that development spend is well spent. Sends a very good message to all stakeholders especially consumers.”
“Extremely useful for government relations/political goodwill, non-consumer marketing materials and also internal action plan.”
“An excellent step forward to provide such a framework for assessing contribution towards the Millennium Development Goals.”
“Although the devil is in the detail, I am a big supporter of what you are trying to achieve.”
“We welcome this proposal. Sees that it validates what we are already doing. Very much support this.”
Some global companies are committed to other initiatives and their support was conditional on Good for Development taking these into account.
2. Perception that the Mark is suitable for multiple audiences
There was agreement that the Mark could be used for a variety of audiences e.g. consumer, business to business, political, internal and it was up to company receiving Mark to use as it wanted:
“We would not use on product advertising to consumer but extremely useful for other audiences.”
“The actions for the Mark helps us engage in political policy debate”.
“Can be used to gain business with retail outlets. Can be offered as a label on own brand products.”
“The use of such a logo would be restricted to our corporate communications.“
3. Ideally the concept should be integrated with other frameworks
Larger companies wanted some integration with existing frameworks.
“Difficult to take on new initiative + cost. Business Call to Action (BCTA) is working on a monitoring framework for companies to measure progress against their BCTA commitments. World Business Council for Sustainable Development (WBCSD) has also developed a Measuring Impacts tool. Would be good to see these taken into account as you further develop this concept.”
“Lot of initiatives out there.”
We are very willing to partner and will explore opportunities for doing this, but given the nature of such bodies it is likely to take much time and effort. This could delay the initiative for the many companies not involved in those initiatives. (See Theme 9 below).
4. Consumer understanding of development needs to be increased
There was concern that consumers did not understand ‘development’ and did not buy based on development impact:
“Do public understand what 'development' is? Need publicity to establish. Do public care about development? What does that mean to average consumer? Consumer research shows very small group where this is on radar. However, look at Fairtrade growth.”
GfD obviously needs to be strong on publicity and grass root campaigns in order to become established as a good thing in consumer minds in same way Fairtrade has. Part of the objective is to raise awareness and understanding of the positive impact of business on development in the minds of the public, offsetting the common perception that business engagement is a negative thing as shown by market research. Having said that, consumers need not be the only target for this information. Other businesses, investors and employees could also be targets.
5. Detail needs to be worked on and agreed with businesses before launch
The concept needs to be acceptable to businesses whilst stretching them in development activity.
“The proposal for assessment and certification I consider to be a comparable approach to other standards and is therefore certainly feasible. In terms of the framework I am really pleased to see that the criteria lists are reflective of a totally integrated business approach and consider the economic and capacity building contributions. The lists potentially allow flexibility to reflect different business circumstances. The scoring I think needs further definition and development. This could be done by piloting with some willing organisations.”
“I’ve had a look through your suggested criteria and many if not most look sensible, at least from our perspective. However there are, inevitably, comments that I would make on several of them.”
GfD needs to consult with many businesses and align the criteria, scores, etc. as well as adding to the menu of activities.
6. Is this only for ‘Ethical’ business sectors?
A debate occurred in the consultation re applicability of the Mark to all business sectors. Is the Mark only for ‘ethical’ sectors e.g. exclude arms, alcohol, etc. or do we want to encourage development regardless of sector – recognise industry is there and encourage it to produce development gains? Would some companies be happy having the Mark if it was also used by, to them, ‘undesirable’ companies? Would the Mark attract bad publicity and therefore be damaged?
The debate is still open.
7. Need to add points for incremental stages rather than ‘all or nothing’ scoring
The present proposal has scoring based on achieving one interim or one ‘high’ goal. Can we introduce concept of ‘increased points for increased achievement’?
“Would like to see incremental improvement encouraged e.g. more points each year if go to next level.”
“Like to see points for different stages of an action e.g. + 5 for in progress rather than straight yes +25 and no -zero.”
The GfD model can be easily be adapted to a ‘progress towards’ scoring system. There is also a strategic question as to how high we set the bar for minimum qualification, with arguments on both sides.
8. How far up and down supply chain do we go?
Currently GfD only looks at activities of the core business of the company seeking the Mark. Some of the criteria reference the direct supply chain e.g. use of local suppliers (relief of poverty) but do not seek to impose any conditions on others further down the supply chain i.e. suppliers who supply to the direct suppliers. This may be in contrast to other schemes. Should this be addressed?
We consider that a company can only be responsible for their direct suppliers.
9. Is this concept initially for SMEs and other companies who are not into other frameworks?
Most support came from companies who were faced with an array of frameworks and saw them as costly and only applicable to certain parts of the business or product range. These included large and small companies. Therefore should we start off with this segment of companies whose needs are not being met by existing schemes, and if and when popularity grows, put effort into integrating the initiative with other frameworks?
10. Publicity by many companies re a common Mark saves costs of publicity for own initiatives
Companies are making development gains and are involved in various initiatives. However, it is left to them to publicise. This is a high cost. The Mark could be a way to leverage publicity made by many companies and thus make own campaign much more cost effective.
11. Builds a consensus and basis for plan of action in a company
Companies have many ways to approach development and many will have subsidiaries doing ‘own thing’. GfD helps a company to be more strategic - focus on a set of actions (which can be different in context), produce plans which can be integrated, share experiences, measure actions, etc.
12. Liked positive scoring rather than negative
Many schemes focusing on minimising the negatives associated with business activity (e.g. environmental impacts). This scheme looks at positive contributions to development, and scores upward.
“We like the concept as it positively adds up to a score rather than scores minus for negative behaviour.”
13. Worried about costs of implementing the framework
The concept is focused on companies operations regarding Millennium Goal actions not on individual product lines. However, there are costs associated with introducing the concept as activities have to be defined, measured, reported, etc. Where a company has many bases and complex operations, what would be the cost of implementation?
How can we minimise the measurement costs? Is it only feasible for small companies, with relatively simple operations in developing countries?
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Comment by Thierry Sanders on August 12, 2009 at 9:09 -
See the MDG Scan for companies http://www.mdgscan.com which integrates the impact of companies into the MDGs. This framework has been developed to minimize input time per company. It is flexible so that companies can go into the details of every project in every country they operate in, or they can do a broad brush estimate of their overall corporate impact.
How does GfD deal with the following dillemma?
most innovations are not product but process innovations. These process innovations lead to a reduction of jobs, yet the technology and the innovation is essential in making the country/company more competitive.
Thierry Sanders, www.bidnetwork.org
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Comment by Ruth Brännvall on August 12, 2009 at 11:19 -
Any initiative that promotes "good development" is of course worth support. However, let's not forget that Social Responsibility is becoming a global standard, as the standardization of ISO 26000 is in its final stage and will be published next year if all goes to plan.
Since ISO is a recognised system for companies all over the world to use for processes and assurance in different areas so that there is a common language, measures etc. To create any ISO standards typically takes about 10 years since that is simply how long it takes for companies and organisations all over the world to agree and put something concrete forward that should be possible to implement regardless where in the world one operates.
ISO 26000 has the scope of assisting organisations in addressing their social responsibilities including labour conditions, local & global environment, and most things that ODI wish to address even though the Millenium Goals are obivously not its main focus.
The ODI mark will need to be developed and promoted (what is the cost?) to have a real effect that I just wonder if it will be worth it in terms of how many companies, not just in the UK, that will endorse it as they will also have the option from next year to enroll on the ISO 26000 standardisation?
We are happy to provide more details on ISO 26000 standardisation work, and this standardisation body is publishing most of its information (different to its previous policy regarding standardisation work in environment, quality).
Best,
Ruth Brannvall
Director
NJORD Management Consulting ltd
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Comment by tim murray on August 12, 2009 at 15:57
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The GfD label has the potential to make two significant contributions:
1. It could provide a highly visible, simple, and objective way to make consumers aware of which companies are having a positive net impact on development.
2. This visibility may provide a strong incentive for companies to be as developmental as possible.
There are, however, two significant challenges the initiative must face:
1. The GfD label runs the risk of over-simplifying 'good' development impact, and the process of scoring companies may be fraught with contradictions and dilemmas. As Terry Sanders' example illustrates, long-term competitive advantage and profit (and thus perhaps development impact by expansion and re-investment), may conflict with developmental goals in the short-term. The issue of tax avoidance is another example of such a conundrum: the PDf mentions 'paying taxes due' as developmentally friendly policy- so how would you score a company operating in a EPZ with tax breaks compared to one paying taxes at the national rate? Such complex and debated issues will be difficult to simplify into a scoring system, but not necessarily impossible.
2. There is a danger that a 'net impact's system at the brand level may obscure developmentally regressive practice behind particular products- a consumer may unwittingly buy a pair of shoes made by children as the brand has a 'good for development' label due to good practice in other areas. This suggests there made need to be some practices which automatically disqualify the brand from receiving the label.
Tim Murray
SOAS
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Comment by James Oriarebun on August 13, 2009 at 18:58 -
Looking at the ideals behind this Initiative (GfD) with particular focus on the Millennium Development Goals , one could comment that small and medium enterprises at the grass root lever where the poor customers are of the majority will have a lot to take home. Good ideal like this is what keep human dreams alive and prepare individual towards tomorrow greatness, by so doing we are setting a practical action that will reduce crime rate and poverty in our society and thereby promote economic growth and good development.
In our country where we operate, we are happy to fully support this initiative and we want our activities to be added to the menu of activities as soon as this initiative is fully kick off.
Best Regards,
James Oriarebun
Managing Director
Oria-Logic International
234, Nigeria.
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Comment by Sidney Clouston on August 19, 2009 at 23:13 -
Dear Fellows and Friends:
I support the concept, where consumers will be able to support Socially conscious business. I am not so sure that it is a given that it is becoming the standard for business as Ruth is suggesting. It is in the Sustainability Circles but not so much outside that group. This is still needed to spur things along. The US Millennium Challenge Corporation has criterial for a ranking system and levels which were suggested for the
acknowledgement of compliance and improvement implemented. There are programs for the levels that do support the effort to gain the next level in that system that could serve as a model. So standards are set and
support and incentives are provides. For an example Ghana was awarded for their low corruption and positive
Democracy over 560 million dollars for development projects. Could development agencies and departments of the United Nations support or become involved?
On the negative side, the Forestry certification standards groups in the US that compete has clouded the issue.
Best regards,
Sidney Clouston
Clouston Energy Research, LLC
cloustonenergy@aol.com
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Comment by Ruth Brännvall on August 20, 2009 at 19:01
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A note of clarification with respect to Sydney's point that the standard would not be likely to reach outside the Sustainability group. The initiative came from ISO, the global standardisation organisation that is driven mainly by businesses and governmental organisations. It has Hence, in the UK is it the BSI that has the lead.
The ISO 26000 has ensured that the following groups have participated and been tasked with different parts of dealing with the different aspects of Social Responsibility:
Industry
Government
Consumer Groups
Labour Groups
NGOs
Researchers
Thanks.
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Comment by Alistair Leadbetter on September 3, 2009 at 8:32 -
As Ruth says, any program interested in promoting involvement with development is worthy of support.
One of the challenges facing a mark that appears on a product is that there are already a huge number of "ethical" marks available e.g. the Fairtrade mark (from FLO), the Rainforest Alliance mark, the FSC mark, the organic mark, the proposed Fair Trade mark from WFTO, the Utz mark and many others. These marks are already competing and, in some areas, collaborating. The plethora of marks can cause customer confusion or simply indifference to the messages behind the label.
I would be very interested in finding a way for these marks to deliver something together as I suspect that there's going to be an awful lot of wasted resources in delivering common goals. If the FLO mark is taken as an example, there has been an enormous amount of money spent in delivering brand recognition and in influencing customers. Developing and introducing a mark coupled with the systems required to give credibility is enormously expensive.
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Comment by Prama Bhardwaj on November 19, 2009 at 11:40
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As a manufacturer of clothing in Tanzania trying to manufacture sustainably but commercially, I would welcome the idea of a wide ranging mark that promotes development and is visible to the consumer. The only comparable mark known to the consumer for clothing so far is FairTrade, which is not possible for us as there is no FairTrade certified cotton in East Africa and many other regions as yet. Thus perversely penalising cotton farmers who don't have access to FairTrade schemes. So if there was a consumer recognised mark that was widely available, we would be very interested.
Having said that, the detail and the cost is really important. Currently we are saddled with costs and time/energy demands for GOTS certification, Oeko Tex certification, BSCI social audits, buyers' own social audits etc. If the mark would use the work already done for other social and environmental audits rather than repeating / competing with them, that would make the most sense.
Prama
www.mantisworld.com
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