If you’ve ever purchased something that was labeled “fair trade,” you’re already familiar with the idea of certifications. From GOTS to Fair Trade to Rainforest Certified, certification programs exist to ensure a minimum standard is met before companies can use that particular term to define their products. Not all “ethical” products are created equal, after all. Familiarizing yourself with the standards of any given certification can help you navigate your way to products you believe in.
GoodWell founder, Pete Gombert, likes the idea of certifications, but he felt that no current certification program embodied all of the qualities he – and fellow conscious consumers – looked for in an ethical company. A slew of certification programs not only confuses customers, it creates a financial burden for companies who must certify each component of their company through separate enterprises, stacking B-Corp on top of Fair Trade on top of organic cotton (GOTS) certifications. He and the GoodWell team are about to launch the first comprehensive ethical certification program on the market and, after reading this interview, I hope you’ll be as excited about it as I am.
Thanks to GoodWell for sponsoring this post.
How did GoodWell get started? What inspired it?
About 6 years ago while I was the CEO of my third startup company, Balihoo, I was struggling to find purpose in my professional career. I have been fairly successful by conventional definitions, however, I found the work we were doing to be uninspiring and I needed more. I started looking into how I could leverage my position as the CEO of a technology company into something more purposeful and stumbled into the corporate social responsibility arena. The first book I read on the subject was Let My People Go Surfing by Yvon Chiounard, the Founder of Patagonia and it opened my eyes to the possibility of business as a force for good. Ever since that moment I have had a passion to solve the problem of the role of business in society. GoodWell is the manifestation of 6 years of research, conversations, interviews and thought on how we can slightly alter the existing system and produce massive systemic results.
What is the end goal of the GoodWell Certification program?
GoodWell’s mission is to create a world in which all businesses operate at a basic level of humanity. The GoodWell certification program will return a level of transparency to the market we haven’t seen for ages. In the past, consumers would hold companies accountable for bad behavior by not purchasing their products. Back in the day of Adam Smith, businesses were members of the community, they played a role and were expected to act with basic humanity. Today, we as consumers don’t have that level of visibility into the companies we buy from, they are simply too large and complex. Our only methods for determining if a company is worthy of our dollars are brand, price, quality and customer service. GoodWell’s simple, yet audacious mission is to change the world by giving consumers the information they need to support good, caring, conscious companies and avoid irresponsible, greedy, self-interested companies.
Is there a rating system? If a company reaches out and doesn’t meet your minimum requirements, what happens?
GoodWell has developed a simple process to ensure companies act with basic humanity. It is a simple process with the possibility for unprecedented results:
- Companies join GoodWell and commit to the GoodWell Code of Conduct.
- Companies measure 13 simple metrics each to demonstrate their adherence to the Code.
- Every year as part of their financial audit, an independent third party verifies the company metrics.
- Companies display the GoodWell logo in order to provide consumers with the assurance they are buying from a good company.
If a company isn’t in compliance with all 13 metrics, they cannot become GoodWell certified. It’s a binary system that is intended to be simple, universal, and transparent, for all companies – of all sizes and in all industries. This is important because we are aiming to be the floor of corporate behavior. Our metrics should be simple for companies to achieve and as a result if a company can’t meet all metrics something in the business is wrong and should not be supported. We believe this type of transparency is critically needed in the free market today.
In the past, organizations like the Ethical Trading Initiative have been called our for having too broad a definition of what “ethical” means, resulting in labor abuses through the supply chains of some of their certified companies. How will your process differ from other broad certification programs?
GoodWell believes all companies should treat their customers, employees, communities, suppliers and the environment with decency and respect and operate in a sustainable manner. In order to achieve GoodWell certification a company must pass all 13 metrics, so one cannot become certified if it is stellar in one area but lacking in another. Further, the metrics and their collection method are required to be independently verified and audited by a third party on an annual basis.
In addition to the independent audit, GoodWell requires the company to certify their entire supply chain over a ten-year period. This is one of the most critical differences between GoodWell and other certification programs. This causes a cascading reaction all the way through the supply chain, to the very end, which is often in the parts of the world most susceptible to environmental and human rights abuses. This requirement makes it much more difficult for a company to clean up their own house and outsource their bad behavior.
For the purpose of certification, how do you define a living wage (in hourly wages)? If the federal minimum wage is raised to $15.00/hour, will this affect your certification standards in any way?
GoodWell requires companies to pay at least 90% of their full-time employees a living wage, defined as a wage high enough to keep a family of four above the poverty level. The poverty level will obviously vary by country of operation. In the US this would mean someone working full-time would need to be paid more than $12.12 per hour. If the legal minimum wage was raised above that level, then that requirement would be automatically met.
On your “How it Works” page, your section on suppliers says that companies must strive to GoodWell certify their supply chain. What does that mean in practical terms? If supply chains are not certified up front, what steps are taken to ensure that they are in the near future?
GoodWell has a strict requirement for certified companies to ensure their entire supply chain is GoodWell certified over the course of a 10-year period. A GoodWell company must exceed the following supply chain certification levels for each year after they sign the GoodWell Commitment:
Year 1 – 20%, Year 2 – 40%, Year 3 – 50%, Year 4 – 60%, Year 5 – 75%, Year 6 – 85%, Year 7 – 90%
Year 8 – 95%, Year 9 – 98%, Year 10 – 100%
GoodWell serves as the clearinghouse for the certification standard and as such we control the calculation of the supply chain adherence. As part of the audit process the auditor will provide GoodWell with a list of all suppliers to a given company and GoodWell will then match those suppliers with our database and calculate the score to determine if the metric is met.
I’m intrigued by the idea of a universal standard – and I think it’s a step in the right direction – but I worry that standards that are made too broad will result in a sort of greenwashing (or ethical-washing) of the industry and obscure the truly conscious choices. What steps are you taking to ensure this doesn’t happen?
There are two keys to our program which ensure greenwashing is eliminated.
- Binary metrics. Because our metrics are a binary pass fail there are no grey areas or room for interpretation. Each metric must be passed in order to achieve certification.
- Independent Auditing. Given the lengths companies will go to promote good behavior and hide bad (look no further than Volkswagen) we believe independent certification is essential and as such it is a cornerstone of the process.