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.
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?