Blog Amazing things that
bring positive results

Does the “S” in social impact reporting always include employees?

Over at the American Constitution Society’s blog, I just posted some thoughts about how advocates can use corporate law to advance workers’ rights. Social enterprise falls clearly into this category. There are many social enterprise business models in which “social” is synonymous with employees. FareStart, a Seattle restaurant, is an obvious example (I’ve had the pleasure of eating there). FareStart’s employees are homeless and disadvantaged individuals, and are part of a culinary job training and job placement program. The restaurant operates purely for the benefit of its employees. But it seems to me that there are many other social enterprise business models—those where employees are not the beneficiaries—that loose sight of workers’ rights in their own operations because they are so focused on making an impact on some other constituency, like communities in developing countries, or the environment.

Here are my brief thoughts on this issue from the ACS blog:

“Despite the small trend towards social enterprise and “stakeholder governance,” the movement seems to engage environmental and philanthropic concerns far more than worker concerns. For example, social impact reports of companies tend to highlight environmentally-friendly business operations like recycling, low water usage, and carbon-neutral footprints. These reports also highlight corporate giving to charitable causes. Rarely do they discuss the livelihoods of their own workers. The worker voice is absent from social impact reports, or if the worker voice is included, it is only to highlight some minimal effort to engage and support workers—like paying a minimum wage—which only legitimizes a subpar standard. Unions and worker rights groups should challenge prioritization of other stakeholders by engaging with those who claim to support corporate law reforms to “make business better”. The worker voice needs to be inserted into the social enterprise movement, promotion of the benefit corporation statute, and into social impact reporting.”

In some ways, this is an issue similar to one that has been discussed for a long time in the nonprofit world—that is, low salaries and general mistreatment of nonprofit employees. Because the nonprofit employee is working for a charity, it is assumed that she (and it usually is a “she”) will work long hours for little money and no benefits. Let’s hope that type of thinking has not migrated to the social enterprise world. Social enterprises need to remember than “social” does not just mean societal impact; it’s an issue that is much closer to home than that.

Comments (0)

    Add a Comment