Consumers Demand Environmental & Social Impact Certifications from Businesses
Long gone are the days where companies can do what they want with little to no recourse. In the age of the internet, information spreads quickly and can change the market in a heartbeat.
As an example, 15,000 stores recently banned coconut milk brands that use slave monkeys to pick their coconuts. It took only a few weeks from PETA virally covering this topic until the ban took place. The ability for organizations, journalists, and consumers to police companies is impressive. There’s no doubt about this, but consumers are demanding even more transparency given the severity of bad business practices.
In the monkey slave labor example, it was known for over half a decade that this was taking place. Simply because the affected products were banned in 2020 does not absolve consumers of the guilt that they unknowingly supported this behavior.
Consumers would rather know that products are not exploiting the environment, people, or animals before they make a purchase. They don’t want to find out years later.
The Limitations of Today’s Supply Chain Transparency
It’s hard to imagine a market in which products that are GMO-free, pesticide-free, or gluten-free are not labeled as such. When it comes to consumers’ health, transparency has always been a priority. Being able to understand what’s in a product is a matter of life or death for some people; especially those with allergies.
As more individuals have become aware of business practices that are immoral, they have also demanded greater transparency. This demand has surfaced the fact that our supply chain isn’t transparent enough to answer the questions that matter most.
“It’s not so easy to know which company used child labor in their nickle mining to produce batteries. It’s not so easy to know which company used animal slave labor to pick coconuts.”
Or so the companies’ narrative goes…
Companies involved in ill behavior often pass the blame onto the next in-line, their supplier. Technology companies shift the blame from themselves onto the factories’ ignorance. The factories shift the blame onto the people who delivered them the raw material. The people who delivered them the raw material? They’re not incentivized to speak up about child labor or monkey labor at the sites they deliver raw goods from, and so the secret remains intact.
The abhorrent conditions certain companies make a reality on this planet will not come to light until consumers demand transparency as a prerequisite to purchasing goods or services.
How Certifications Organizations Increase Transparency of Business Impacts
You might be asking yourself how certification organizations increase transparency for consumers during the buying stage.
The way the model works is illustrated as such: businesses that meet good standards want their customers to rest assured when purchasing their products. For example, a chocolate business that pays its employees a fair wage wants consumers to know its products are indeed Fair Trade. In order for a chocolate business to get such a certification, they have to pay a certifying organization to evaluate them on the criteria needed to be labeled Fair Trade.
Certification organizations are incentivized to be accurate in their certification process. If they make a mistake, consumers won’t trust them. If a certification isn’t trusted by consumers, then businesses won’t want to pay for their certifications.
Some certifications are also provided on an ongoing basis. This means that if a company passes a certification this year, consumers can rest assured that it will be confirmed to still be acting in good faith the next year.
Limitations of Existing Certifications & Consumers Demands
The challenge with existing certifications is that they can be expensive for smaller businesses. Consider for example a baking company that operates within 1 state. If it uses 100% organic ingredients in its baking, it would still be required to pay hundreds of dollars to receive an organic certification. Certain certifications also have to be purchased individually, for each product that a company offers.
While it’s important that consumers demand certifications & transparency from international and national companies, it’s also important to understand why smaller companies may not have certain certification labels. As supply chain technologies evolve we are hopeful for a future in which all products’ origins and ethics can be traced using blockchain technology.
A Notable Social Impact Certification — The OM Guarantee
You’ve likely heard of of the big certification bodies such as B Corporation, Fair Trade, Rainforest Alliance, Direct Trade, and a few others. A notable certification that small to medium sized businesses may want to explore is the OM Guarantee. This organization provides certification labels based on companies’ investment in planting trees, feeding animals, and feeding children. These certifications are the type that consumers can demand from companies, since the barrier to entry is low and can scale up or down based on the business’s revenue.
The feed children OM Guarantee is fulfilled through the Food For Life Global non-profit organization. They have a network of over 200 affiliates that serve upwards of two million fresh vegan meals a day. The organization that backs this certification is able to feed a child for the cost of 25 cents.
For feeding animals, the OM Guarantee partners with Juliana’s Animal Sanctuary which is Colombia’s only rescued animal sanctuary. Here they’re able to feed an animal for 50 cents per meal.
OM Guarantee also partners with the Eden Reforestation Project which is a non-profit that employees people at a fair wage to plant trees. Their goal is to plant 500 million trees by 2025, and are one of the most cost-effective reforestation projects helping people come out of poverty and restore the land.
Originally published on Plantvera.com
Octavian is pouring his heart into Plantvera so that others may discover the joys of veganism. He serves as the Vegan Growth Manager.
When Octavian is not obsessing over improving the vegan transition experience; he can be found biking, making chai, or reading. He is also a vegan and loves to cook.
