Social Footprint, the Other Business Impact

What is your company’s social footprint? Companies are adept at tabulating their carbon footprint, and many organizations are now scrambling to determine their water footprint as a result of the earth’s growing water scarcity crisis. But as human rights expert Christine Bader reminded me last week on Twitter after my recent article on sustainability and business: What about human rights? Or social impact? Or the effects a company’s operations and supply chain have on local communities? Choose your favorite moniker: social footprint, social impact, human rights, etc. Regardless, companies who ignore the social footprint do so at the risk of alienating their stakeholders.

In fairness the challenges of identifying an organization’s “social footprint” are many--the first step is the acknowledgment there is an effect on people and communities in the first place. And in a business climate where data and figures are the language of corporations, measuring that social impact is a pesky task considering we are talking about qualitative, not quantitative data.

As far as social footprint disclosure and measurement go, no guideline really exists except the Global Reporting Initiative (GRI). GRI’s reporting framework provides a rigorous exercise to assess a company’s social footprint as much as it does for environmental and governance disclosures. Assuming a company’s stakeholders decide an organization’s social footprint (i.e. social performance) is material, GRI sets the standard. Labor, human rights and impacts on local communities are all tucked into GRI’s reporting guidelines. In the end, a social footprint assessment is about transparency, especially in this age of social media where nothing stays secret.

So what are the sectors and companies to watch when we gauge how the social footprint of various companies across the world? The following examples give companies a clue of how they can mitigate their effects on society, people and communities.

The energy and extractives sector

Here at 3p we have long had a very healthy skepticism (or cynicism) when reviewing energy companies' corporate social responsibility (CSR) reports and initiatives.  So let’s step away from these firms’ “carbon footprint” for a moment. We are left with their performance on human rights, labor issues and therefore, their social footprint.

Shell is one energy firm investing in local communities, especially in Nigeria, a country with which the company has a very complicated relationship. In 2011, the company invested $78 million in community programs in this western African country, including a network of health centers that offer much needed HIV/AIDS and malaria treatment.

Another energy company, ExxonMobil, takes a business approach towards community building with a focus on diverting business to women- and minority-owned businesses. The world’s largest energy company also runs aggressive worker safety and health programs. And if you are gay, Chevron is one of the best companies to build a career: Human Rights Campaign has long given the San Ramon-based company a 100 percent mark on its Corporate Equality Index. Chevron has also joined the fight against AIDS in Africa.

Textiles and clothing companies still have room for improvement

The global apparel industry has made improvements in its social impact performance, but much work remains in the pipeline. Apparel firms’ tortured supply chains mean a social footprint headache is only one wayward supplier away. For example, companies including Target, H&M and Levi Strauss have taken a stand by ending such practices as the sandblasting of jeans, a process devastating to workers’ health. Unfortunately other companies have been too slow to address problems within their supply chains, even after the recent factories in Bangladesh and Pakistan that killed hundreds of workers.

One leader in addressing a company’s social footprint within the apparel industry is Timberland. From funding water projects and child day care for employees in India to teaching life skills and organizing summer camps for workers’ children in China, the New-England based firm has launched a bevy of programs to improve the quality of life for its employees and their communities.

Food companies must confront emerging social problems

I would be remiss if I did not mention food companies and agribusiness as this sector has an immediate effect on everyone. One elephant in the room affecting food companies’ social footprint is the worldwide land rush, or “global land grab.” Since the spike in global food princes in 2007-2008, foreign governments and multinationals have either purchased or leased valuable land in Latin America, Africa and southeast Asia. The impact has often been devastating to families who had lived, worked and often farmed on these lands, but often lacked a title. As consumer awareness of this trends grows, companies will have to take a close look at their supply chains to ensure their ingredients have not been behind the displacement of some of the world’s poorest citizens.

Other ingredients are posing headaches for companies, too: witness the shift to sustainable palm oil. Palm oil is in countless food products and is a major feedstock for biofuels. The resulting deforestation from palm plantations is devastating to wildlife and humans alike, especially indigenous communities and child laborers. The companies shifting to sustainable palm oil are creating a domino effect, from Starbucks to Unilever to Avon.

The process involved with learning your company’s social footprint is a complicated one; nevertheless, your firm’s stakeholders will demand a more thorough accounting of the impact on society if they have not done so already.

Based in Fresno, California, Leon Kaye is the editor of GreenGoPost.com and frequently writes about business sustainability strategy. Leon also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. Most recently he explored children’s health issues in India with the International Reporting Project. You can follow Leon and ask him questions on Twitter or Instagram (greengopost).

[Image credit: Leon Kaye]