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December 02, 2004
Gap-Verite Collaboration Exemplifies Award-Winning Practice on Social Responsibility
    by William Baue

Verite wins a Social Capitalist Award for labor standards monitoring such as its work with the Gap, whose Social Responsibility Report earns a Social Reporting Award.

Today, Fast Company magazine and the global monitoring firm Monitor Group announced the 25 recipients of the Social Capitalist Awards that recognize organizations for "devising ingenious ways" to fuse social progress and business success. Among those honored was Amherst, Massachusetts-based Verité, an independent nonprofit that provides monitoring, auditing, and training on global labor standards compliance.

Concurrently, the Sixteenth Annual Business Ethics Awards were announced in the latest edition of that magazine. Winner of the Social Reporting Award was Gap Inc. (ticker: GPS) for its groundbreaking 2003 Social Responsibility Report. This report received widespread praise for its frank disclosure of shortcomings in compliance with the Gap's Vendor Code of Conduct, which also serves as a point of intersection with Verité.

"By engaging an organization such as Verité, the Gap is strengthening the meaning and credibility of their Vendor Code of Conduct," said Allison Devore, director of development for Verité. "We're working with the Gap conducting a big picture assessment of their global vendor compliance program."

Verité understands the big picture at the Gap because it engages with companies throughout the value chain, from consulting with top management to monitoring working conditions on suppliers' production lines. Verité's comprehensive scope also extends to its ability to gather a wide range of diverse actors impacted by corporate activities.

"We've been able to create a diversified global network of stakeholders including governments, nongovernmental organizations, investment institutions, and companies that are able to engage together from the factory to the boardroom to address issues of compliance," Ms. Devore told

This is exactly what Paul Pressler, the Gap's CEO, calls for in the report.

"We are convinced that collaborative, multi-stakeholder engagement is the only way to create sustainable change industrywide," states Mr. Pressler. "That's why we’ve been expanding our global partnerships and significantly broadening our work with outside groups."

What so distinguishes the Gap report is not only its disclosure of punishment for non-compliance, but also its confession of areas where monitoring fails to expose transgressions that the Gap suspects are happening despite best efforts.

"In 2003, we revoked the approval of 136 factories" for code violations, Mr. Pressler writes in the report.

Perhaps the most refreshingly honest aspect of the report is its admission that discrimination and freedom of association violations are likely more widespread than the data suggests. However, this is also one of the distressing aspects of the report, as it reveals how much work remains to lift the veil hiding these problems.

Verité is helping to do some of this work.

"A lot of our work right now is at the next level of engagement, working with companies to actually resolve conflicts between workers and management," said Ms. Devore. "We're seeing a gradual evolution of companies who are interested in conducting remediation."

Verité inhabits a unique position between company and worker that lends strength to its ability to bridge differences. Its independence is a key to maintaining this position.

"The Social Capitalist Award evaluated organizations on five areas--in one the other areas, sustainability, we've diversified our funding to remain independent and objective as a nonprofit organization with a balanced revenue stream from individuals, government, foundations, and corporations, both as clients and as sponsors," Ms. Devore points out.

The other assessment areas include entrepreneurship, innovation, social impact, and vision. Verité's work, such as its collaboration with the Gap, exemplifies outstanding practice in all of these areas.

Other organizations that received Social Capitalist Awards for exhibiting these strengths include microfinance pioneers Acción International and Grameen Foundation USA, social philanthropists Social Venture Partners, and fair trade advocates TransFair USA.

The Gap's report enacts key Business Ethics Awards criteria, including meeting challenges with integrity and for leading their field by showing the way ethically in a fashion that sends a loud signal globally.

Other recipients of the Business Ethics Awards include Dell (DELL), which won the Environmental Progress Award for its computer-recycling initiatives, as well as two smaller Vermont-based companies. Chroma Technology won the Living Economy Award for employee ownership and fair wages, and King Arthur Flour won the Social Legacy Award for long-term commitment to employees and the environment.


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