Written by Dotty Winters

Misc

Value Judgement

We shouldn’t make broad assumptions about something based on the label. The same is true of the businesses we buy from, says Dotty Winters.

weighing scales and walnuts
Social media makes it easier than ever for people to contact the brands and businesses we use and to find out about their views and practices. Word of missteps and misdeeds can travel fast and consumers aren’t shy of letting businesses know what they think.

In my day job I work with businesses who are increasingly trying to get their heads round what it means to be ethical, values-led or ‘good’ and how that relates to their specific customers.

Well. Sometimes, low-fat yoghurts are packed full of added sugar. This means that low-fat yoghurts are a great choice for people who are avoiding fat, but not so good for those avoiding sugar. To work out where these yoghurts fit in your balanced diet, you would need more information than just the ‘low-fat’ badge.

We should all know by now that we shouldn’t make broad assumptions about something based on the label. The same is true of the businesses we buy from.

Social enterprises have been around in the UK since at least the 1840s, (when the first workers’ cooperative was set up in Rochdale). A social enterprise isn’t a specific type of business, there is a range of different structures, but (broadly) they will typically:

• Have a defined social or environmental mission, which is as important as their need to generate income.

• Make most of their money from trading (as opposed to being funded by charities, foundations or government).

• Reinvest much of their profit in achieving their social or environmental mission.

They are sometimes referred to as non-profits, a term which also includes charities, but which can be a little misleading. All of these organisations need to generate surplus to survive; the difference is really in what they do with it. Shareheld businesses distribute some of their profit to their shareholders, non-shareheld businesses tend to reinvest more of their profits in their mission.

Like profit-distributing businesses, social enterprises range from very small organisations to larger brands which we’ve all heard of (the Big Issue, John Lewis Partnership). Some businesses do have shareholders, and distribute profits to them, but also have a stated social mission: for example, The Co-operative Bank, and other organisations such as the John Lewis Partnership distribute profits to staff.

“Some social enterprises may have elements of their social mission which you do not agree with; for example it may include promotion of a religion or a philosophy which you aren’t fond of.”

Yet other organisations don’t have a social mission embedded in their structure, but have extensive corporate responsibility programmes which deliver real social outcomes. Some of the biggest companies in the world, and some of those with the ‘worst’ reputations also have the most comprehensive programmes of social activity. The cynical among us may see this as damage limitation, or PR glossing, and that may well be the case, but they may also be delivering more social or environmental change than some counterparts.

All of this is complicated enough without factoring in some of the high profile stories we’ve heard about tax reduction schemes. Both large and small organisations may have schemes in place to reduce the tax they pay, and while the quantum of tax reduced will typically be more in a large organisation, the intent may well be the same in their smaller counterparts, even those which are social enterprises.

Some social enterprises may have elements of their social mission which you do not agree with (for example it may include promotion of a religion or a philosophy which you aren’t fond of); others may stand for something which you don’t think should be part of their role, for example PETA is pro-animals, but anti-pets; and some social enterprises which support people to get back into work provide large amounts of free labour to large corporations, who some think should pay for their staff.

Some of the same concepts apply to charities; for example, many people are not aware that Operation Christmas Child (which shouldn’t be confused with other similarly named shoebox-gift-giving schemes) includes evangelical Christian literature with each box given to a child.

These examples aren’t black and white; none of these things are objectively bad, but depending on your perspective they may not match with your intentions. When it comes to choosing organisations ‘ethical’ is a nuanced concept, at best.

There isn’t an easy answer here, but for anyone looking to exercise their power as a consumer to make a difference, it’s important to look at a bigger picture:

• What kind of difference are you looking to make?

• How important are other factors (for example, is it important that the business you support pays all possible tax, pays a living wage, or offers enhanced workers’ rights)?

• How easy is it to find out the sort of difference a business makes? Do they publish social or environmental accounts as well as financial accounts?

• Are you concerned about the amount of money they pay their top executives? Are they balancing the need to operate commercially and effectively (with the best possible employees) with the need to deliver their wider vision?

• Is the organisation being open about the issues above and do you feel confident that they are sharing all the information that you would need to make a decision?

I know that this level of complexity isn’t what we want. Wouldn’t it be nice if we could separate companies (and charities) into goodies and baddies, and make our decisions that way? In a world where we’ve failed to effectively categorise yoghurts as ‘good’ or ‘bad’, it’s probably not surprising that finding a ‘good’ business is harder than we expect.

@DottyWinters

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Written by Dotty Winters

Nascent stand-up, fan of fancy words, purveyor of occasional wrongness, haphazard but enthusiastic parent, science-fan, apprentice-feminist.