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5 ways social washing is damaging consumer confidence

Social washing is the new buzz word that has emerged from the misrepresentation of companies appearing more socially responsible than they actually are. You may have heard of greenwashing when companies put marketing-friendly words such as “sustainable,” “natural,” “green,” or “environmentally-friendly” on labels to misguide consumers into making them think that these products are eco-friendly or green, when in fact they are not. Social washing is the same, except it relates to the treatment of human capital.

If shopping with values and purpose wasn’t hard enough, now companies are tricking consumers into thinking that employees and community are their top priority.

COVID-19 has provided consumers the rare opportunity to evaluate the legitimacy of a company’s commitments to social good and assess that company’s priorities. The impact of shelter-in-place orders has forced companies to make difficult decisions that can place the interests of their shareholders in conflict with those of their employees and communities. The spreading pandemic is prompting companies to put a greater emphasis on human beings and consider how the treatment of all stakeholders is being scrutinized by the general public.

Here are 5 easy ways we, as consumers, can spot social washing, in the hope that we all come to the realization that by recognizing these tactics, we will choose to either not support these companies with our wallets or to outwardly expose their misguided practices to the public via social media.

  1. Living wage

    Check to see if a company as a living wage policy (don’t get this confused with minimum wage). Any company that doesn’t pay their employees enough to meet their basic needs shouldn’t claim to have an “inclusive company culture” on their job postings.

    Understandably, if, during the pandemic, a company is forced to reduce pay, check to see how they are handling the reductions, and if they are being equitably shared by top management and rank-and-file workers.

  2. Paycheck Protection Program Pirating

    Many companies had to lay off or furlough a majority of their employees at the beginning of the pandemic. The first federal stimulus package introduced the Paycheck Protection Program (PPP), which allows loan forgiveness for payroll costs — including salary, wages, and tips. This program was designed to bring people back to work, but a closer look at the facts shows us that some companies that received millions from the $517 billion program have not retained most of their staff on the payrolls.

  3. Adequate and affordable health insurance

    One of the central promises of Obama’s signature healthcare law was to prevent Americans from going broke paying for essential healthcare procedures. But some of the country’s largest health insurance companies have developed and marketed a variety of plans that allow employers to avoid the expense of adequate insurance that often covers only preventative care options such as check-ups but not things like hospitalization and surgical operations. Employees are being exposed to bankruptcy-causing medical bills as if they had no insurance at all.

  4. Treatment of customers

    We have all been affected by the pandemic-induced economic shutdown in some form. How are you, your family, and your friends being treated by your favorite stores and service providers? For example, is your auto insurance company taking into account that you have been working from home and quarantining since March? Think about how many times you have driven your vehicle and if you really needed to pay top dollar for coverage.

  5. PTO vs. Paid Holidays

    Companies using the PTO protocol, that close their operations for certain holidays like Christmas and New Year’s Day do not pay their hourly employees for these “closed for business” days. If hourly employees can’t afford a gap in pay, they are forced to use their PTO days. This, in turn, makes employees reluctant to take time off when they’re sick if they want to save some time for vacation days.

    I worked for a company that used this loophole tactic. After using my PTO days to cover the 5 non-paid closed-for-business holidays, I had 5 days left to use for vacation days with my family each year. If I got sick, I came into work anyway because I didn’t want a gap in pay. Needless to say, employee retention and wellness weren’t a priority with that company.

Some companies will come out of this pandemic with positive long-term economic prospects based on their actions in supporting their employees and communities, while others will likely suffer lasting reputational and financial effects. Now more than ever we need to applaud the companies that are legitimately doing social good by supporting them and advocating for them.

There are a few rigorous and holistic certifications that are verified by a third party and were created to take away all the guesswork for consumers. B Corp Certification and the Certified USA Social Enterprise (sister affiliates are Certified UK Social Enterprise and Certified Canada Social Enterprise) are two of the most trusted distinctions that I look for in a company. If you see businesses with these certification logos on their websites or packaging, you can be positive that you are not being social washed or greenwashed.

Jennifer Moreau Chick

As the Founder and CEO of World For Good, Jennifer Moreau-Chick helps readers learn about how to elevate social and environmental sustainability in the business community so companies can differentiate themselves from their competitors. She has been featured in Conscious Company Magazine as a leader in social impact, in Conscious Magazine and has worked as a Marketing Director for 3 certified B Corporations for the past four years.