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Social Enterprise Gold Mark

Beyond certification – the Mark of a better business

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Following the news in the summer that Sainsbury’s are replacing the established and trusted FAIRTRADE Mark with their own in-house certification scheme, there seems to be a general trend in this direction by big producers. Multinational giants Mondelez International (which owns Cadbury), Unilever, and Barry Callebaut (world’s biggest producer of chocolate and cocoa products) have all confirmed they are now using their own ethical standards, eschewing independent third party labels.

This is a worrying development. How do we know how rigorous standards are really being applied and assessed if they are not subjecting themselves to third party scrutiny? Multinationals and corporates make huge shareholder profits, and not to submit themselves to third party scrutiny seems to further reduce the accountability of their operations. As I wrote in my blog about the Sainsbury’s story back in July, we are concerned that this could also lead to erosion of consumer trust in any labelling schemes, which should ultimately exist to engender this trust, not damage it.

Social Enterprise Mark CIC has recognised that standards should not just provide openness and transparency, they should also challenge the business to become even better at what it does. This is why we now collect social value information on an ongoing basis, alongside developing the far more demanding Social Enterprise Gold Mark, which goes into much more depth around ethical practice in every area of the business, from procurement and sourcing to employee relations and governance.

The Social Enterprise Gold Mark was developed to provide a quality benchmark for social enterprises that can demonstrate excellence in key business areas, such as governance, business ethics, and social/environmental impact. As well as providing proof of a commitment to business excellence, it also acts as a business development tool – successful applicants receive an individually tailored action plan for continuous improvement, in line with Social Enterprise Gold Mark guidelines of best practice. Therefore, it is very much an ongoing development process, not just covering a snapshot in time at the point of assessment.

Given the high-profile scandals that have hit big brands such as Mondalez (formerly Kraft), which came under fire in 2011, when they closed a UK chocolate production factory following their takeover of Cadbury, there is a need for more businesses to submit to the scrutiny of external assessment with regards to their business practices and how they make and distribute their profits, and how they treat their workers.

At the time of the Cadbury takeover, Mondalez made assurances that production would remain in the UK and that the Somerdale factory would remain open. However, less than a week later an announcement was made that the factory would in fact be closed, at the cost of thousands of jobs.

In order to prove applicants’ businesses are excelling as genuinely socially responsible organisations, the assessment for the Gold Mark digs deeper to examine key aspects of the operations of a business. This includes looking at how they govern the organisation, employee engagement and terms of employment, as well as how income is used to create social and environmental impact.

Maybe this is the future of certification…. A visible and trusted identifier of those doing better business, in every aspect of their operations.

Can ‘fairly traded’ really replace ‘Fairtrade’?

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As the authority responsible for implementing the robust standards and independent accreditation processes of the Social Enterprise Mark and Social Enterprise Gold Mark, we were very sad to hear of the decision by Sainsbury’s to apply their own “fairly-traded” scheme to Red Label tea in place of the widely trusted FAIRTRADE Mark.

Much as Sainsbury’s is loved and trusted by its customers, this move risks opening the door to less reputable businesses creating their own in-house schemes. We are very concerned that this will lead to a proliferation of unsubstantiated social and environmental claims that will confuse consumers and ultimately erode their trust in all such schemes, far beyond the sectors in which Fairtrade operates. The extent of these concerns is apparent in the response to the petition on Change.Org on this topic which quickly attracted over 5,000 signatures.

As a labelling company ourselves, we know that considerable investment, expertise and commitment is required to develop and process robust standards. We are concerned that by Sainsbury’s controlling the certification of its own products, it will ‘water down’ the regulations to suit its own agenda.

There is likely to be confusion amongst consumers, who have come to recognise the FAIRTRADE Mark as independent proof that a product has met international Fairtrade standards. This trust has been built up over 2 decades.

For our part, we verify the claims of genuine social enterprises, by providing a trusted independent label to assure stakeholders that they meet common standards. The assessment process helps them to benchmark performance against the norms and encourages them to work towards best practice. The key to credible accreditation/certification is an external assessment process, which should be conducted by an independent third party. Only with a completely impartial and transparent process is it meaningful.

We therefore fail to understand why Sainsbury’s would choose not to support such a process in respect of its own products that meet Fairtrade standards, rather than upholding the principles of transparency and consistency that the FAIRTRADE Mark provides. This is, I am sure, a sentiment which is echoed by our network of Social Enterprise Mark/Gold Mark holders, and the wider social enterprise sector.

We offer our full support to Fairtrade, which itself inspired our own Mark, and stand by the importance of independent, credible, transparent authentic labels that consumers know they can trust.

Global champion of standards for social enterprise

Further expansion of our international network

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As a global champion of social enterprise standards and the body responsible for the only internationally available social enterprise accreditation, we are delighted to have recently expanded our international network of accredited social enterprises, representing a five-fold increase within 2 years.

nappNetwork of Asia and Pacific Producers Limited (NAPP), part of the the global Fairtrade organisation, working to secure a better deal for farmers and workers in Asia and Pacific, has recently been awarded the fifth international Social Enterprise Mark. NAPP joins the global Fairtrade certification body FLOCERT, along with AUARA (Spain), C3 (UAE), and Northdoc (Ireland) in the growing network of organisations outside the UK accredited with the Social Enterprise Mark, proving a commitment to trading for the benefit of people and planet.

We have a proven international assessment process that can be applied anywhere in the world. We also offer an international consultancy service to advise global counterparts looking to set up similar accreditation schemes for social enterprise within their own countries.

By offering an alternative approach to trade, Fairtrade supports producers in securing better markets, contributing to greater sustainable development in the Asia Pacific region. NAPP certifies farmers and workers across this region, all of whom share ownership of the Fairtrade system and have an equal voice in decision making. As a Producer Network, NAPP ensures their voice is heard in the system.

“Fairtrade Network of Asia and Pacific Producers is delighted to be accredited with the Social Enterprise Mark” says Ayan A. Banerjee, CEO of NAPP.

“We look forward to the collaboration and are confident that it will further our mission of providing fairer terms of trade to our producers in the Asia and Pacific region. Fairtrade strengthens the position of farmers and workers in the value chain, and by being part of the international social enterprise network, we can help better serve our producer network.”

Lucy Findlay, Managing Director of Social Enterprise Mark CIC, said “We are delighted to welcome NAPP as our newest international Social Enterprise Mark holder. It is exciting to now be working with two organisations within the internationally recognised Fairtrade movement. NAPP are fulfilling an important role, working to secure a better deal for farmers and workers in Asia and the Pacific.”

“With the UK recognised as a pioneer in the social enterprise business model, we are proud to act as a global champion of credible standards for social enterprise, and are encouraged to see our network continuing to expand across international borders. We are the world pioneers of social enterprise accreditation; ours was the first Mark of this kind for social enterprises, and in welcoming NAPP as a Social Enterprise Mark Holder, we look forward to exploring how we may be able to further recognise and promote social enterprise best practice in this region and beyond.”

Please click here to find out more about our work as a global champion of social enterprise.