Radical Transparency

Various Models Exist to Demonstrate Social Responsibility. How to Distinguish Between the Options?

Why It Matters

Demonstrating transparency means data, details, and corroboration — those verifiable points about a impact-oriented business. New legal forms like the C3 as well as more grassroots approaches like the Economic Nutrition Label are shaping the new age of transparency. The second in a series.

Following the increase in mission-driven businesses, certain legal structures have emerged that allow for companies to put their social values at the forefront. Canada’s first example of this is British Columbia’s community contribution companies (also known as C3), a legal form that indicates an intention to make a positive impact. The only other province to offer a comparable business structure is Nova Scotia, which has community interest companies, a hybrid nonprofit/for-profit model.

According to Marjorie Brans, Co-Managing Director of the School for Social Entrepreneurs Ontario, it’s more common for companies to forgo this formality and opt to be included in directories for social businesses such as Buy Social Canada’s directory or Social Enterprise Ontario. In addition, social impact fairs and marketplaces such as the Buy Good, Feel Good Expo and the Green Living Show provide companies opportunities to brand themselves as socially responsible without the stringent criteria or monitoring involved in a certification.

Other companies are transparent about their values and operations in creative ways. In Newfoundland, The Woodshop on Fogo Island uses an “economic nutrition label” to provide information on their crafts and furniture including the impact on local employment and how profits are spent.

The label is attached to every product the shop sells and Nathan Ball, the store’s Customer Service and Operations Manager, says it’s been well-received. “Usually there’s a moment of confusion because people don’t know what they’re looking at. They’re used to the format and seeing it in nutrition but then they say: ‘That makes sense! Why don’t other people do this?’”

Radical Transparency Series inside Future of Good. Looking at Fogo Island's Economic Nutrition Label
Ball says the company is diligent about updating the label when variables change such as a different vendor or an increase in the price of lumber. “We know we are being held accountable to our label,” he explains.

Adherence to self-regulation cannot be guaranteed, however. Not every company has the resources or the desire to follow through with the rigour that a third-party might. Brans warns of this, says that companies are biased in favour of themselves, citing Starbucks as an example. The corporation says 99 percent of their products are ethically sourced through its Coffee and Farmer Equity Practices program. However, this program is an initiative by Starbucks and is not of the same calibre as a Fairtrade certification.