A1 Human dignity in the supply chain
All goods and services purchased by a company have an associated impact on society, which can be either positive or negative. Of these, one of the most important is the working conditions of all employees in the supply chain. A company is responsible for the well-being of all people – including its suppliers and subcontractors.
An ECG company...
- purchases goods and services that are provided under ethical and fair conditions.
- is alert to risks in the supply chain where the violation of human dignity is a common occurrence.
- actively promotes behaviour in the supply chain that respects human dignity.
A2 Solidarity and social justice in the supply chain
Companies have the responsibility to demand a fair and just treatment of all stakeholders in the supply chain, and to actively promote this.
Every company can learn about the social risks and potential irregularities in the supply chain, communicate its requirements and make appropriate purchasing decisions.
An ECG company recognises its co-responsibility for solidarity and social justice throughout the supply chain, and develops its business practices accordingly.
A3 Environmental sustainability in the supply chain
Every company is faced with environmental impacts in the supply chain, and contributes to these when purchasing raw materials, goods and services. Companies are therefore responsible for environmental sustainability in their supply chain and should aim to reduce any negative environmental impact wherever possible.
An ECG company ...
- evaluates the life cycle and supply chain of goods and services according to any negative environmental impact they may have.
- chooses the most environmentally friendly options when making purchases.
- avoids as far as is feasible any goods and services with a significant impact on the environment.
A4 Transparency and co-determination in the supply chain
Companies have the responsibility to demand transparency and participation for all stakeholders in the supply chain, and to actively support and promote this. Every company can learn about the social risks and potential irregularities in the supply chain, communicate its requirements and make appropriate purchasing decisions.
An ECG company recognises its co-responsibility for transparency and co-decision making throughout
the supply chain, and develops its business practices accordingly.
B1 Ethical position in relation to financial resources
With a Common Good-orientated approach, money is not the main objective, but serves only as a means of payment. When dealing with money, respect for human dignity is more important than financial interest.
If a company is able to finance its operations primarily from its retained earnings and from equity capital provided by its owners and third parties who share its commitment to ECG values, it will minimise the risk of being thrown off course by having to meet the expectations of the
wider capital markets which focus primarily on the financial returns it is making.
Any borrowing is a commitment to add value, and thus to be able to pay interest and make repayments. Loans should come from social and solidarity-based sources or ethical banks.
An ECG company …
- runs its financial management according to critical ethical principles.
- works on its financing structure to safeguard this ethical focus.
- works towards a steady increase in its equity ratio and supplements its capital with funding from partners who are similarly interested in the company’s independence and autonomy.
B2 Social position in relation to financial resources
Achieving fairness towards all stakeholders is a major objective. The company’s spending becomes the “income” of the suppliers, employees and society. Surplus funds are first allocated to the continuity and further development of the company and the creation of necessary contingency reserves. The distribution of profits as dividends to equity holders should only follow after sufficient provisions for the future have been made.
An ECG company …
- has owners, who prioritise the further development of the company over a return on their investment.
- has owners with moderate claims on a return on investment, and in any event forgo a payout at the expense of a new debt.
B3 Use of funds in relation to social and environmental impacts
The move towards an environmentally sustainable society requires a review of environmental issues in all investments, in particular the targeted allocation of revenue to environmentally highly effective investments.
Investments can also be made directly in socio-environmental projects or financial services. Their impact often applies in both areas, social as well as environmental, and can be considered together.
An ECG company …
- Carries out a regular assessment of ways to reduce its environmental footprint when deciding on its investments.
- Also considers potential socio-environmental effects when investing in intangible assets and financial instruments.
- Invests excess funds in socio-environmental projects once the need for building up its own financial reserves to ensure its future sustainable development has been met.
B4 Ownership and co-determination
A company lives by its shared sense of entrepreneurial activity, common vision and strong cooperation.
This is achieved especially through joint decision-making, co-design and co-responsibility – ideally through co-entrepreneurship. This objective can be supported by a suitable legal structure which facilitates the transfer of ownership shares in the sense of genuine co-ownership.
An ECG company…
- enables participation in decisions through the best possible transparency about its business activity and planned objectives.
- prepares relevant stakeholders specifically for the acquisition of co-ownership.
- continually develops joint decision-making processes as a learning organisation.
C1 Human dignity in the workplace and working environment
Human dignity in a company is manifested in an employee-focused organisational culture that is built on respect, appreciation and trust. Diversity in the workforce is seen and used as an opportunity, and makes for a healthy working environment. People are considered to be the focus, and not a factor of production.
An ECG company …
- has an organisational culture and communication based on respect and openness.
- ensures the engagement of its employees according to their personal strengths, creates scope for self-management, and promotes the personal and professional development of all employees.
- sees diversity as a strength.
C2 Self-determined working arrangements
Employment contracts control the way in which a company and its employees cooperate. How resources are structured and allocated (such as income, time, security, or work-life balance) has a significant impact on the motivation, sense of security and wellbeing of the employees. Individual structuring of employment contracts alongside extensive self-determination on the part of the employees is the stated objective.
An ECG company …
- is continually and contractually committed to improving working conditions.
- allows for a high degree of individualisation in employment contracts.
- discusses the basics of working conditions openly with all employees.
- empowers employees to make far-reaching decisions.
C3 Environmentally-friendly behaviour of staff
Pioneer companies play a significant role in raising environmental awareness of their employees. The company plays a key role in setting a good example and providing incentive policies to promote environmental awareness and practice of its employees in their daily routines at work.
An ECG company …
- develops environmental awareness, and promotes environmentally friendly behaviour of its staff.
- creates a framework for the implementation of projects that foster sustainable practices.
- contributes to the implementation of key environmental measures through its organisational culture and internal processes.
C4 Co-determination and transparency within the organisation
The company or the organisation is a place for active participation and involvement of all employees. All employees can contribute their ideas, suggestions or inspirations, thereby assuming shared responsibility, and contributing to the good of the company. They increasingly identify with the company or organisation, and the combined wisdom of the many is put to work.
An ECG company …
- makes all significant and critical information transparent, easily accessible and understandable for its employees.
- allows for the legitimation and evaluation of the management by its employees.
- enables individual teams and each individual employee to play a large part in the decision-making process.
D1 Ethical customer relations
Customers are respected as human beings with needs and desires, rather than being seen simply as potential sources of revenue. The aim is to fulfil customers’ genuine needs in the best possible way. Among other things, this approach requires customer-oriented product development,
honest communication on an equal footing and barrier-free access at all points of contact with customers. The concept of ethical customer relations may entail forgoing revenues or profit, where this is in the customers’ interest.
An ECG company …
- takes care to respect customers as equals and places emphasis on transparency and honesty with the aim of promoting its customers’ welfare and fulfilling their needs in a spirit of partnership;
- designs products and services which are easy to access and to use, ensuring the utility and user-friendliness of the product or service, access to information and ease of access at the point of sale;
- refrains from using deceptive advertising techniques that seek to gain an illegitimate market advantage, including exaggerating a product’s positive features, withholding information and applying sales pressure.
D2 Cooperation and solidarity with other companies
Cooperation and solidarity with other companies means working together as equals in a spirit of respect and partnership. Competition is regarded as a healthy and honourable challenge with the emphasis on transparency and respect rather than hostile displacement. This attitude permeates company culture.
An ECG company ...
- sees other companies operating in the same sector as a complement to the market;
- works together with other companies on solutions, products and services that recognise and meet the needs of customers;
- offers other companies support in emergency situations without expecting anything in return.
D3 Impact on the environment of the use and disposal of products and services
The use, recycling and ultimate disposal of products and services often result in negative environmental impacts. In order to reduce these impacts to a minimum, products and services should be designed in such a way that they can be integrated into natural cycles to the greatest possible extent (consistency) and achieve the best possible ratio of utility and/or satisfaction of needs to negative environmental impact (efficiency). If we are to reduce the environmental impact of human society as a whole, however, moderate consumption levels are also essential (sufficiency).
An ECG company …
- aims to fully understand the environmental impacts of use and disposal and to minimise these to the greatest extent possible;
- offers products and services which have a less significant negative impact on the environment through their use and disposal than existing alternatives;
- investigates the way in which customers use and dispose of its products and seeks to exert a moderating influence (promoting sufficiency).
D4 Customer participation and product transparency
Customer participation can provide useful input on potential socio-environmental and sustainable product improvements, product and service innovations and the future development of the market. Customers can share their experiences directly with the company or communicate among themselves, thus increasing their influence.
The provision of transparent information on the material composition of products and on how prices are set clearly demonstrates the (higher) quality of products and services, allowing consumers to make informed decisions and positively influencing public opinion.
An ECG company …
- encourages direct contact with its customers and involves them in product development;
- uses dialogue with customers to make products and services more sustainable and to promote a sufficiency-based approach to consumption;
- ensures comprehensive product transparency and traceability in the supply chain.
E1 The purpose of products and services and their effect on society
The ultimate purpose of an ECG company is to produce or offer only those products and services that actively contribute to the common good. This means that they are necessary for a simple (satisfactory) way of life that is physically and mentally healthy, and that they have been produced in a socially responsible manner that is also as environmentally sustainable as possible. In addition, ECG companies offer solutions to some of the greatest challenges facing humanity; for example, overcoming poverty, providing high-quality nutrition, education and health for all people, and addressing social inequality.
An ECG company …
- offers products and services that contribute to a good life for all and
- satisfy the basic needs of as many people as possible, including disadvantaged and lower socio-economic groups.
- promotes the health and development of individuals and communities with its products and services.
- avoids products and services that carry a social, environmental or health risk.
E2 Contribution to society
Every company operates in a social environment and within a community. Society and its institutions (both governmental and non-governmental) provide important foundations for entrepreneurial activities. In turn, society expects everyone to make an appropriate contribution to the maintenance and development of these structures. In addition to taxes and statutory contributions, there is a wide range of tangible or intangible benefits that organisations can provide which can either promote or harm society and its structures.
An ECG company …
- contributes to society and its institutions by paying its taxes and making social contributions in accordance with its wealth.
- only uses government subsidies to develop the company in such a way as to increase the wealth of the region in the medium term.
- uses its skills and resources to strengthen civil society initiatives within society as a whole without serving its own interests.
- uses its contacts with administrative and political decision-makers to serve the common good rather than its own interests. It also publishes its contacts and financial flows.
- puts measures into place to prevent corruption and inappropriate non-payment of tax both internally and in its operations with direct business partners.
E3 Reduction of environmental impact
Companies can make a substantial contribution to curb excesses against our planet by changing their internal production, manufacturing and operation processes, and thereby reducing their environmental impact. The focus here should be on the internal procedures between taking possession of primary products, and delivery of the final product to the client. Product design can also contribute to reducing this impact.
An ECG company …
- describes the life cycle of its products and services within the company, and collects and documents their environmental impact.
- actively addresses the environmental impact of its core activities.
- continuously reduces any environmental impact, and designs its procedures and processes to be resource-efficient, economical and low in harmful substances.
- shares its knowledge and improvements with the industry and with other stakeholders.
E4 Transparency and co-determination
The main aim of transparency and co-determination is to protect the general public from decisions that are based on a lack of information and facts, a lack of discussion, or a lack of involvement of those affected by these decisions. They are the basis of an educated, democratic,
open and pluralistic society.
Relevant stakeholders include: local residents, local authorities, not-for-profit organisations, future generations and nature (the environment, animals, plants, biodiversity, land).
An ECG company …
- is transparent about any activities and involvement that are of legitimate interest to the public.
- takes into account the interests of relevant stakeholders when making business decisions.
- values transparency and co-decision making as the basis of an educated, democratic, open and pluralistic society.
For us, human dignity means that every human being is valuable, unique and worthy of protection, irrespective of origin, age, gender or any other characteristics. Humans and all living things have the right to exist, and are entitled to respect, appreciation and attention. They are more important than property and assets. People are at the centre of all things. Human dignity is inviolable and independent of the value of human labour.
Solidarity and social justice
Solidarity and social justice are closely related values, based on a common foundation of empathy, appreciation, compassion and equality of opportunities. The aim of both values is to reduce unfairness, to share responsibility and to strike a more equal balance between the strong and the weak.
- aims to ensure that everyone has the same basic equality of opportunities, and that noone is left behind.
- manifests itself as a mutual and unselfish willingness to help in times of need, to overcome difficult situations, and to voluntarily co-operate with one another.
- may also entail specific community-based obligations and liabilities, where the collective assumes responsibility for the weak.
- is based on a feeling of togetherness, which, from the ECG point of view, means an attachment to people as a whole, rather than to a defined group, which is how the term has been interpreted historically.
Social Justice ...
- aims to achieve a fair distribution of goods, resources, power, opportunities and obligations.
- is accomplished through social mechanisms, such as a just organisation of society, economy and the state. Ideally, these should be regulated, ie brought under the control of law. This means that many courses of action that aim to establish justice are not entirely voluntary.
Ecology deals with the interactions between organisms and their environment, which at the same time represents the basis of their existence. Human activity poses a significant threat to this. Companies are, therefore, strongly encouraged to contribute to sustainable development. This means meeting the needs of the present, without compromising the ability of future generations to meet their own needs and to choose their own way of life.
The sustainability of products and services can only be assessed by evaluating the whole life cycle of the product or service in question. This describes the stages a product goes through from acquiring or producing raw materials (A3), and includes its development, manufacture or processing by the company, its delivery (E3), its use by the customer and finally, the disposal of the product (D3). The life cycle of a service can be described in a similar way.
Environmental sustainability can be improved through targeted investments, and is often associated with social change. B3 therefore evaluates the environmental as well as the social impact of investments (which other themes under environmental sustainability do not).
Transparency and co-determination
Transparency is a prerequisite for stakeholders to be able to participate in decision-making. Transparency means the disclosure of all information relevant to the common good, in particular critical data such as the minutes of executive committee meetings, salaries, internal cost accounting, and recruitment and dismissal procedures.
Co-determination involves the participation of each stakeholder in the decision-making process, especially if the outcomes affect them directly. They should have the status of active participants and be as closely involved as possible. There are different levels of engagement and consultation, ranging from the power of veto to collective and consensual decision-making.
This group includes those supplying directly to the company as well as secondary suppliers, ie, the entire supply chain. All products and services purchased from others are evaluated. Every company can take co-responsibility for its suppliers when making purchasing decisions, when
laying out contractural terms, and when exercising influence.
How this shared responsibility is put into practice depends on their balance of power within the market, and their distance from the supply chain. It is important to be especially alert to procurement procedures in the supply chain when buying products and services that are of significant commercial value to the company, or are important or high-risk components for their products.
A list of a company‘s most important suppliers (up to a total value of approx. 80% of its purchase volume/ or 80% of purchase costs if volume is not available) and the products and services they provide, can act as a guide for this. Products and industries that carry a social or environmental risk should be closely examined even if this risk is small.
Owners and financial partners
The owners of a company hold property and decision-making rights, so they also have to take responsibility and ownership of these. Their duties are dependent on the legal system they operate under.
Investors provide their own or borrowed capital. Financial service providers are those companies that offer payment transactions, insurance, and investment or financial advice.
Employees, including co-working employers
The stakeholder group Employees includes all persons, who perform essential tasks for the company; are included in its regional, organisational or social structures, and for whom at least one of the following criteria apply:
- An employment relationship
- People who have been employed for a period of at least 6 months
- People who are employed for at least four hours per week
- Tasks that are performed regularly and are recurrent (eg, every summer)
Customers and other companies
Customers are the target group for a company‘s products and services; for example, users of products and services, distributors, end customers and contractors.
Other companies are those companies who have the same (regional) target group. How acompany behaves towards, and interacts with, companies in other sectors or regions is also taken into account.
Stakeholder group E includes all groups who are affected indirectly by a company‘s activities. The group is seen in the widest sense possible, although there are differences within each value:
E1: Humanity as a whole, including future generations.
E2: Communities or social groups who share a defined living space. This can be either physical or virtual (e.g. all people living in a certain area or all internet users). The group has common rules and institutions that are based on a collective understanding. A company can belong to several communities (municipality, state, scientific, etc.).
E3: The global ecological environment, including the natural resources future generations will require.
E4: Stakeholders that are relevant to the company, which are not covered by sections A to D (e.g., neighbours, NGOs acting as ‘representatives’ of society).