Impressum ECOnGOOD Matrix Handbook 5.2 – V1.0

Publisher: International Federation for the Economy for the Common Good e.V.

Release: 2026-10-12 v1.0.1

Founder: Christian Felber, creator of the Economy for the Common Good model and initiator of the Common Good Balance Sheet.

Version 5.2 authors: Marta Avesani, Walter Kern, Sabine Lehner, Renata Sommer, Wolfram Sommer.

Previous versions authors: Christine Amon, Manfred Blachfellner, Monika Culka, Angela Drosg-Plöckinger, Christian Felber, Susanna Fieber, Peter Frank, Gerd Hofielen, Lutz Knakrügge, Sigrid Koloo, Carlos Lopez-Monllor, Christian Loy, Susana Mur, Pedro Olazabal, Ulrich Rücker, Christian Rüther, Karla Schimmel, Dominik Sennes, Regina Sörgel, Christoph Spahn, Lea Strub, Moritz Teriete, Christine Unterrainer, Carlos Adolfo Viale, Eva Wagner.

Special thanks to: Gerrit Elbrink, Veronika Sharonova, Roland Wiedemeyer for technical support and to Gerd Hofielen and Humanistic Management Practices GmbH for dedicated financial support.

Our heartfelt thanks go to everyone who sent their feedback and suggestions contributing to this handbook

Citation: ECOnGOOD Matrix Handbook 5.20, 2026, Matrix Development Team, International Federation for the Economy for the Common Good e.V

Licence: ECOnGOOD Matrix Handbook 5.20 © 2026 by the International Federation for the Economy for the Common Good e.V. is licensed under Creative Commons Attribution-ShareAlike 4.0 International. Here you can find a copy of this license: https://creativecommons.org/licenses/by-sa/4.0/

Defined terms from the Voluntary Standard (VS) adopted by the European Commission are used throughout this handbook. Additional terms are defined below.

– Actions – All initiatives and projects that an organisation carries out to ensure that it achieves its defined goals and targets. Actions can be planned, initiated, or fully implemented.

– Active mobility – All forms of transport based wholly or partly on muscle power; such as cycling, walking, etc.

– Balancer or balancing organisation – An organisation using this handbook to write its Common Good Balance Sheet.

– Consensus – A decision-making approach in which everyone must agree before proceeding. Any person who strongly disagrees can block the decision. This approach prioritises unanimity and collaborative agreement.

– Consent/Systemic Consensing — Decision-making method based on resistance levels rather than preference. The decision is good enough for now, safe enough to try. (Visotschnig & Schrotta).

– Fundamental human needs – A finite set of universal human needs shared across all cultures and eras, as defined by the economist and humanist Manfred Max-Neef. Unlike hierarchical models such as Maslow's, these needs are seen as interrelated and simultaneous, rather than ranked. What varies across societies is not the needs, but the satisfiers — the ways they are met.

– Goal – General, medium-long-term idea of the future or desired result that the organisation envisions, plans, and commits to achieve. A goal should not be confused with a target or an action.

– Human development – Human development is about enabling people to live the lives they value by expanding their capabilities, ensuring equality, and promoting well-being and dignity for all. The concept was founded by economist Amartya Sen.

– Policy — A set or framework of general objectives and management principles used by the undertaking for decision-making.

– Practice — One or more initiatives related to sustainability matters undertaken as part of the transition to a more sustainable economy. Smaller organisations often use practices instead of policies.

– Target – A precise, measurable outcome that an organisation aims to achieve within a certain timeframe as a milestone towards a broader and longer-term goal. A target should be drafted to be SMART: Specific – (in what it desires to achieve), Measurable – (through KPIs), Achievable – (given resources, time, and skills), Relevant – (aligned with the overarching goal), and Time-bound – (with a clear deadline or timeframe). A target should not be confused with 'actions'.

– Undertaking – Term used by the Voluntary Standard for “organisation”. The term is only used in VS datapoints.

– Workforce – Includes both employees and self-employed, independent of the type of contract.

– ECOnGOOD: Economy for the Common Good

– CGBS – Common Good Balance Sheet

– MDT – Matrix Delevopment Team

– MU – Monetary Unit

– FTE – Full Time Equivalent

– KPI – Key Performance Indicator

– TT – Temporal Trend

– PDCA – Plan Do Check Act

– VS – Voluntary Standard for corporate sustainability reporting adopted by the European Commission

The Common Good Matrix is a framework for organisations, a practical instrument for transformation towards the common good. It is structured around 20 themes (e.g. A1) resulting from the intersection of the 4 value groups (columns) with the 5 stakeholder groups (rows), and is further divided into sub-themes called aspects (e.g., A1.1). Aspects can be positive or negative depending on the impact on the Common Good.

The Common Good Balance Sheet (CGBS) is the output of applying the Common Good Matrix: a) a report based on reporting questions and verification indicators; b) self or peer-evaluation for internal use; c) (where available) external validation. It is a tool to support values-based decisions by reflecting on social, environmental, and overall ethical impacts, with the main goal of strengthening both the organisation's common good contribution and its own resilience, strategy and transparency. Like a financial balance sheet, it reflects the organisation's value — but here, value becomes values: a broader contribution to the common good and to the transformation of the economy. For the ECOnGOOD Movement, money and finance are means, not ends.

Scores and evaluations are for internal use, unless in compliance with local regulations for publishing. Refer to the MDT public page for further information and updates on available reporting tools and possible next steps, such as exchange with other balancers (peer evaluation) and a possible validation processes (audit).

ECOnGOOD advocates for an economic system in which organisations acting more ethically and sustainably are structurally rewarded — for example, through preferential tax treatment or priority in public procurement — while those causing greater social or environmental harm would bear a correspondingly higher cost. While such systemic incentives are not yet widely in place, transparency about sustainable and ethical practices can and should already generate tangible benefits in an organisation's relationships with its stakeholders, such as stronger employee retention, greater customer preference, and increased trust among investors and business partners.

This handbook enables organisations to understand, evaluate, and prepare a Common Good Balance Sheet, covering all themes and aspects of the Common Good Matrix. It is designed for organisations, consultants, and auditors, as well as anyone wishing to deepen their understanding of the Economy for the Common Good applied to organisations.

For each stakeholder group (row), the handbook offers a short introduction along with reporting questions and verification indicators to provide contextual and general information on that group. This information can then be analysed through the lens of each value.

For each theme, the handbook offers a short introduction, a list of behaviours typical of a common-good-oriented organisation ("An ECOnGOOD organisation…"), and "Initial questions" to support internal reflection and discussion.

For each aspect (sub-theme), the handbook includes: a) an introduction; b) reporting questions for the narrative; c) verification indicators to evidence the evaluation level; d) levels of evaluation for self- and external assessment; e) Guidelines for indicators and evaluation.

The Common Good Report can be prepared using the online reporting-template version of this handbook or a reporting tool (see MDT Public page for available tools developed by ECOnGOOD IT-Partners).

There are two reporting options suitable for organisations interested in values-based reporting:

• CGBS (incl. Basic VS). This option focuses on guiding organisations towards the common good, using a selection of questions and indicators to support this process. It includes content from the Voluntary Standard (VS) adopted by the European Commission, covering the complete basic module and some of the comprehensive module. All selected VS indicators are displayed in a separate section in each related matrix field, labelled: "ECOnGOOD relevant VS indicators" and must be reported in order to complete the CGBS.

• CGBS + Full VS. This option is for organisations that want to report in line with the full VS, while strategically transforming toward the common good. It includes everything in the CGBS option, plus the "Extra VS Indicators" appearing in a dedicated section of the relevant matrix aspect. This option enables complete VS reporting, while using the Common Good Framework's value-based approach as the strategic foundation for organisational transformation. Organisations wishing to report in line with the VS should check all datapoints marked "VS," bearing in mind the "if applicable" principle and possible omissions due to commercial prejudice, trade secrets/IP, classified information, or other legally protected data. The code next to "VS" refers to the relevant module, section and paragraph of the standard respectively, where 'B' stands for Basic and 'C' for Comprehensive Module. Each VS datapoint is linked to its corresponding Matrix topic. Five datapoints are relevant to more than one stakeholder group and therefore appear in multiple places across the Matrix — however, only the information relevant to that specific stakeholder needs to be reported each time. There is no redundancy.

To prepare the Common Good Report, the organisation answers the reporting questions and verification indicators, disclosing the relevant datapoints described in this handbook.

Reporting questions guide the narrative on context and management approach, disclosing policies, actions, and future goals and targets for each aspect.

Verification indicators are concrete facts and figures that demonstrate the effectiveness of the organisation's common-good-oriented strategy and transformation.

Micro and small organisations without systematic written documentation may simply describe how each aspect is addressed. Since committing to goals and targets for every ECOnGOOD Matrix theme may be too extensive for one reporting period, the priority is to start the transformative process, focusing on the most relevant themes.

Reasons for omission, non-applicability, or non-relevance should be disclosed in the "datapoint checklist," not in the report itself. This checklist is a final review for the CGBS and VS, ensuring traceability and consistency. If no data is available for a verification indicator, an appropriate alternative indicator may be used instead, with the reason explained in the datapoint checklist.

Reporting tools may offer different formats and features, such as the datapoint checklist, filtering options, and export functionality for VS datapoints.

Suggested Approach

1. Prepare — Get an overview of the matrix and put a team together (assign a responsible person per theme, if applicable).
2. Establish common ground — Answer the general facts and figures questions to align understanding.
3. Gather data — Collect relevant data for each theme, ideally before its discussion or workshop.
4. Reflect and discuss — Use the open space "An ECOnGOOD organisation…" and "Initial questions” of each aspect for guidance.
5. Analyse the past — Review historical data and temporal trends.
6. Assess the present — Examine existing policies, practices, measures, and strategies.
7. Define the future — Formulate goals based on this analysis.
8. Get inspired — Search for good practices in your own and other sectors.
9. Prioritise and plan — Return to the general introduction (Section 4.3) to prioritise targets and goals for the next period, then create an action plan with a responsible person and deadline for each goal.
10. Share good practices — Make them available to build momentum toward the economy for the common good.

Datapoints: Shall, May, and If Not every organisation is expected to answer every datapoint — datapoints are labelled "shall," "may," or "if," to support deep reflection across organisations of different sizes, sectors, and geographies. • "Shall" datapoints must be answered. If not possible, apply the comply-or-explain, using the datapoints checklist. • "May" datapoints are optional, selected based on relevance (size, sector, geography, risk); comply-or-explain does not apply. • "If" datapoints are mandatory only in specific cases (e.g., above a certain threshold); when applicable, comply-or-explain applies.

Reporting guidance Beyond the verification indicators, organisations decide independently what content and level of detail to include. Reporting should be clear and comprehensive, applying the SMART principles (Specific, Measurable, Assignable, Realistic, Time-bound) wherever possible, to facilitate potential audits. In general, reported information should be relevant, faithful, comparable, understandable, and verifiable. Organisations reporting in currencies other than the euro should convert relevant E-Calculator indicators using the average exchange rate over the reporting period.

Verification indicators may request temporal trends (T.T.), reported from the year data first became available. Trends are mandatory for VS indicators and outcome/impact indicators (used to assess effective transformation or positive change), and recommended for other relevant indicators.

Annual reporting is highly recommended, to maintain transformation momentum and align with standard business management cycles. Organisations already reporting may prepare a "Delta Report" focussing on changes since the last report (same Matrix version).

Organisations should decide whether to report by calendar or financial year. Disclosed information should remain consistent with the financial statement, to support easy cross-referencing.

The CGBS is generally prepared on an individual organisational basis. A consolidated version may be considered where centralised processes exist for functions such as human resources, purchasing, financial planning, or (in some cases) customer service — assessed on a case-by-case basis.

The section “Guidelines for indicators and evaluation” within each aspect offers more information and interpretation guidelines to support the evaluation process.

The evaluation assesses an organisation's impact on the common good, positioning it on a scale from Baseline to Exemplary. This is a way of applying Common Good Values to assess an organisation's activities and their effects on each stakeholder group — not a strict measurement. Each aspect is evaluated using five general levels, with specific criteria defined per aspect; in case of inconsistency, the general level description in the table below takes precedence.

A baseline is given for all aspects, which describes business as usual when the topic has not been reflected upon. The evaluation process is informed by reporting questions and verification indicators.

Assigning a level requires considering all relevant information and indicators holistically. Levels are cumulative — reaching a higher level requires first meeting all criteria of the level below (e.g., "Experienced" requires meeting all "Advanced" criteria) — though this should be applied pragmatically, as minor discrepancies don't necessarily cause a downgrade. Each level's score reflects both how common-good-driven the theme is and how fully its criteria have been met.

Scores are calculated automatically via the E-Calculator, which aggregates each aspect's score according to its weighting — the more relevant an aspect is to the common good, the greater its value within the theme. Positive aspects are scored 0 to 10, negative aspects 0 to -200, and each theme's final score is the weighted sum of its aspects. Negative aspects follow a different assessment logic and are presented individually in each aspect.

The Matrix offers flexibility: while it provides clear aims and implementation examples for each theme and aspect, organisations may develop their own comparable approaches, allowing room for creativity and auditor judgment.

Beyond theme-level evaluation, an overall score — Common Good Points — ranges from -3,600 (minimum) to +1,000 (maximum). The wide negative range is designed to prevent greenwashing or offsetting harm in one area with gains in another. Since the CGBS is used by organisations of all sectors, sizes, and legal structures, theme weighting varies to reflect each organisation's specific scope and societal role, considering: a) size of the organisation; b) financial flows to and from suppliers, investors, and employees; c) social impact of the raw materials in their country of origin; d) sector and its associated environmental and social impact.

Reports and evaluations prepared using version 4.1 or earlier are not directly comparable in terms of Common Good Score. Matrix Version 5.2 is designed to be comparable to Versions 5.0 and 5.1, though minor changes could still occur. In case the organisation is a repeat balancer, the new scores should reflect its actual evolution since the last balance.

Find below a list of major changes in Matrix 5.2:

• Matrix 5.2 is aligned with the EU's Voluntary Standard (VS) for corporate sustainability reporting, improving interoperability with international standards. See the reporting options section for details.
• Reporting template and E-Calculator datapoints are now integrated into the handbook.
• Full/Compact versions are replaced by "Shall"/"May"/"If" datapoint categories, applied to both reporting questions and verification indicators.
• The online digital handbook includes filters for: reporting options; datapoint category and relevance. See section on reporting options for more detail.
• Levels of evaluation have been improved with a general overview of their rationale and aspect-specific refinements, including adaptations to make the Baseline always applicable and improvements to the Exemplary level.
• A new "Report Introduction" section covers general facts and figures, methodology, previous results and improvement plan with the priorities for the next reporting period.
• An intro has been added to each stakeholder group to provide context for its questions and indicators, reducing repetition.
• VS-inspired management approach questions are now consistently applied across all aspects, covering policies, practices, actions taken, and future goals and targets.
• To make the CGBS more transformative, temporal trends have been added to some indicators and to the highest evaluation levels.
• Reporting is now possible in any monetary unit.
• A new "datapoint checklist" will make it fast and easy to track answered datapoints and note explanations for non-compliance.

A common good-oriented attitude with an ethical approach towards an organisation’s finances considers money only as a means to an end and not as an end in itself, while always respecting human dignity. If an organisation can finance its activities (even in times of crises) primarily from its regular income, as well as its reserves and funds provided by its owners and/or third parties who share the same values, it minimises the risk of violating the ECOnGOOD principles by having to meet the expectations of the broader capital markets, which focus primarily on short-term financial returns. Therefore, the impact of various types of funding on the wellbeing of all stakeholders is critically examined in order to strengthen opportunities and avoid risks.

An ECOnGOOD organisation...

• runs its financial management according to ethical principles.
• works on its financing structure to safeguard this ethical focus.
• strives for funding that ensures its independence and autonomy so that all decisions can be taken without being influenced by financiers who pursue short-term profit maximisation.

Initial questions

• How do we ensure our independence and autonomy?
• How do we implement stakeholder-based financing in our organisation?
• How do we assess the ethical position of our financial partners?

Important note in advance: This section focuses in particular on financial independence, in the knowledge that there are other influencing factors. In the public sector in particular, where financing is usually regulated by law, political influence is probably the more decisive factor.

Financial independence for an organisation is strongly linked to both equity/net assets and sustainable revenue streams. High levels of equity or net assets (the difference between total assets and liabilities) offer a financial cushion and increase organisational stability, flexibility, and the ability to take risks or weather economic shocks. Strong net assets mean the organisation can fund its activities, invest in the future, and manage unforeseen expenses without relying on outside support.

Equity financing, provided by financiers who share aligned ethical principles, mission, and strategic objectives with the organisation, ensures the organisation’s independence and autonomy, allowing all decisions to be made on ethical grounds. The percentage share of equity financing provided by financiers with similar values and goals represents how significant this aligned financing is relative to the organisation’s total equity, reflecting the extent to which financing supports not only capital needs but also the organisation’s social or ethical mission.

A budget is a financial plan that estimates expected income and expenses over a specified future period, serving as a blueprint for managing resources. It is used by organisations to allocate finances efficiently and achieve goals.

Predictable income refers to consistent and reliable revenue streams that are expected with a high degree of certainty, such as regular sales contracts, membership or subscription fees, government grants with fixed terms, or long-term service agreements.

The degree of diversification of funding sources means measuring how much the organisation’s budget depends on its single largest source of funding. It indicates the proportion or percentage that the largest funding source contributes relative to the total annual budget. A high percentage means the organisation relies heavily on one funding source, which implies low diversification and higher financial risk if that source changes or disappears. A low percentage implies the funding is spread more evenly across multiple sources, reflecting higher diversification and reduced risk. This metric helps assess financial stability and risk exposure concerning how dependent the budget is on one primary funder.

In short, financial independence arises when solid, well-managed net assets (equity) are combined with predictable income and diversified funding sources to ensure that the organisation can meet its current and future obligations without external influence, thereby maintaining operational autonomy and resilience and enabling all decisions to be made with an ethical focus on contributing to the common good.

Note: This section is only relevant if the organisation uses debt capital. Debt capital refers to all forms of loans with a term of more than 90 days, as well as checking account overdrafts or line-of-credit facilities, provided that the average annual utilization rate is 10% or more of revenue.

The following characteristics typically apply to stakeholder financing:

• The lenders belong to stakeholder groups that are directly or indirectly impacted by the organisation/project or actively involved in shaping it.
• Financing is not primarily market or return-oriented, but is often characterised by solidarity, sustainability, or strategic interest in achieving common goals.
• The terms of such financing may take socio-economic aspects into account, such as flexible repayment terms, or lower interest rates.
• Stakeholder financing often promotes long-term cooperation and strengthens trust and responsibility between the parties.

In summary, stakeholder financing can be described as a form of financing in which stakeholders who have a genuine interest in an organisation, project, or initiative and share the same ethical values provide the necessary capital. Common examples include loans (subordinated, if legally required) from owners, employees, partners, customers, suppliers, local communities, crowd-funding support, or even the government. Loans from development banks can also be included if the funding guidelines are linked to socio-ecological criteria that are consistent with ECOnGOOD values.

The ethical management of an organisation’s finances can be aided by its choice of financial partners who themselves are committed to appropriate ethical values. Ethical and sustainability ratings can be helpful in making this choice, but must also be closely evaluated to ensure they provide relevant information.

The difference between sustainable finance and ethical finance lies in the core focus and guiding principles, though they often overlap in practice.

Sustainable finance integrates environmental, social, and governance (ESG) criteria into financial decision-making with the goal of ensuring that financial flows contribute to a sustainable economy, balancing profitability with planetary and societal wellbeing.

Ethical finance is grounded in moral values, emphasising transparency, fairness, and social justice. It avoids investments in industries considered harmful or exploitative with the goal of aligning financial practices with ethics.

Financial partners are categorised into several main groups based on the types of services and institutions involved. Common categories include Banking and Credit Institutions, Investment Services and Asset Management, Insurance Companies and Pension Funds, Specialised Finance, and Other Financial Institutions (e.g. mortgage finance companies, leasing companies, and other non-bank financial institutions providing specialised credit and financial services such as crowdfunding platforms and payment services).

Responsibility for ethical cash flows continues to be largely attributed to clients. Nevertheless, there are now also legal requirements for financial institutions to demonstrate the extent to which sustainability risks are considered in their business policies.

Financial partners with a CGBS go well beyond the legal requirements in terms of transparency and business practices, but are still exceptions. They are classified according to an ECOnGOOD rating of ‘advanced’ and above.

Alternatively, financial partners such as banks can also be assessed based on their membership in an ethical banking association. By joining such an association, they commit themselves to adhering to its ethical principles. There are currently two ethical banking associations: the Global Alliance for Banking on Values (GABV) and the European Federation of Ethical and Alternative Banks and Financiers (FEBEA). The websites fairfinanceinternational.org/ and banktrack.org also provide helpful information for assessing the ethical stance of financial partners, particularly banks.

Membership in initiatives under the umbrella of UNEP-FI (UN Environment Programme Finance Initiative), which develops sustainable principles for banks (UN Principles for Responsible Banking), insurance companies (UN Principles for Sustainable Insurance), and investment companies (UN Principles for Responsible Investment), also provides helpful guidance, albeit less demanding.

Last but not least, sustainability ratings (known as ESG ratings) can also be used to assess financial partners. The main providers of sustainability ratings are CDP (formerly known as the Carbon Disclosure Project), MSCI ESG, S&P ESG, and Sustainalytics. The ESG Risk Rating assesses the financial risks arising from sustainability issues. They provide rating results by sector, risk groups, and for individual companies. Unfortunately, only Sustainalytics currently offers free access to its ratings. The situation will most likely improve due to Regulation (EU) 2024/3005 of 27 November 2024 on transparency and integrity of environmental, social, and governance (ESG) rating activities.

While B1 dealt with the ethical provision of equity and debt capital for the organization, B2 addresses the use of earnings in accordance with values of the common good. This is because the organization’s earning-reducing expenditures constitute income or otherwise influence the well-being of other stakeholders.

A good life in an economy based on ethical values means, from a financial perspective, fairness, supportive and cooperative behavior, and solidarity with stakeholders regarding how earnings are allocated among current expenditures, investments to ensure the organisation’s viability, and distributions to owners.

An ECOnGOOD organisation...

• sees itself as part of a network consisting of organisations and stakeholder groups that together make value-creating contributions to a good life for all.
• prioritises, in accordance with all stakeholders, its own long-term economic health over short-term return for equity investors.
• ensures that its own value creation is not made at the expense of the financial, social, and/or ecological integrity of the stakeholders involved.
• uses its financial resources both to secure its own future viability and to contribute to securing the future viability of its stakeholders, and deals consciously and transparently with any (potential) resulting tensions.
• has owners, who prioritise the further development of the organisation over a return on their investment and refuse any payment which would come at the expense of the organisation’s other stakeholders or generate a new debt.

Initial questions

• Who are our organisation’s most important stakeholders (besides the owners)?
• To what extent and in what ways are these groups financially dependent on our organisation?
• What aspects are considered in our organisation’s financial planning and income targets? Are stakeholder interests taken into account?
• How does our organisation prioritise expenditures that are considered income for the various stakeholders to secure their future?
• How well is our organisation positioned to deal with current and expected future economic, social, and ecological challenges?

An ECOnGOOD organisation uses its earnings in the reporting period primarily to fulfill the organisation's mission, to provide a fair income for its stakeholders, including its owners, and to ensure its development and long-term economic health.

Stakeholder analysis A stakeholder analysis is a strategic tool used to identify and understand the individuals, groups, or organisations that have a stake in the organisation and/or its decisions. It should contain a complete overview of the organisation’s stakeholders (including owners), their interests, and influence. The analysis should also provide a comprehensive overview of how the organisation assesses its own influence, responsibility, and economic relevance to impacted stakeholders because this is necessary input for the stakeholder risk analysis..

Stakeholder risk analysis The stakeholder risk analysis goes beyond traditional outside-in risk analysis for the organisation itself and deals also with the inside-out effects, in particular with the negative impacts that the organisation’s behavior could have on the wellbeing of its stakeholders. The more comprehensive and inclusive the risk analysis, the higher the assessment level. Helpful questions for the stakeholder risk analysis may include:

• What economic, social, and environmental risks occurred during the reporting period?
• What negative impacts on stakeholder interests occurred as a result?
• Will these impacts also have an effect in the next reporting period?
• What other risks can be expected in the next reporting period? The results of the stakeholder risk analysis, in turn, are a prerequisite for financial planning that takes into account how to address stakeholder risks.

Financial planning to meet the identified risks for stakeholders Financial planning is a structured process for managing finances, designed to achieve the organization’s goals, ensure its long-term viability, and address anticipated risks. What sets this type of financial planning apart, however, is that it also takes into account the impact on stakeholders and the associated risks by allocating appropriate financial resources to prevent and/or mitigate these risks as well.

The way in which an organisation spends its financial income has direct and indirect effects on the organisation’s stakeholders. Therefore, when the organisation makes decisions about the distribution of earnings, it should ensure that the interests of all stakeholders are considered. However, this section focuses primarily on the appropriate participation of owners in earnings (regarding this aspect, the other stakeholder groups are already dealt with in sections A, C, D, and E), which they usually decide on themselves. This includes all financial flows paid to eligible people or entities that have invested capital in the organisation (liabilities to financial partners are reported in B1).

If distributions are irregular, the average distribution over the last three years shall be used.

Distribution of earnings should primarily reflect ECOnGOOD's values rather than economic profitability for owners. Therefore, the return on investment should be based on the risk-free interest rate relevant to the organisation. In most countries, the risk-free interest rate is derived from the yield on long-term government securities denominated in the local currency (often 10-year government bonds). If the risk-free interest rate is not published on the websites of the Ministry of Finance or the Central Bank, the yield on 10-year government bonds can be used instead.

The transition towards an environmentally sustainable economy requires the consideration of social and environmental impacts in all investments, in particular, the targeted re-allocation of financial flows towards improving environmental footprints. Expenditures or investments aimed at the organization’s sustainable development and long-term viability should therefore be made with the understanding that financial resources are directed toward new acquisitions that improve social and environmental standards within the organization or promote them in the external market. Similarly, the (possibly temporary) investment of liquid financial resources should be directed toward financial products and projects that contribute to overcoming social and environmental challenges and serve social or environmental purposes.

An ECOnGOOD organisation...

• carries out a regular assessment of ways to reduce its environmental footprint when deciding on its investments.
• is aware of the costs it causes to society and the environment, normally considered externalities.
• considers potential socio-environmental impacts not only when investing in fixed assets but also when investing in intangible assets and financial products.
• invests surplus funds in socio-environmental projects, once the need for building up its own financial reserves to ensure its future sustainable development and stakeholder demands has been met.

Initial questions

• What impact do our long-term assets have on our ecological footprint, and what approaches are there to redevelop them through replacement investments?
• What social and environmental criteria do we consider when designing and evaluating the impact of new purchases?
• What social and environmental impacts do we consider when making financial investments?

Preliminary remark: The relevance of this aspect depends heavily on an organisation’s investment volume in fixed assets. Organisations that make little or no investments in fixed assets (e.g. less than 5% of total investments) can disregard this aspect.

A concrete investment plan, including renovation needs and the potential for improvement, is the preferred approach in this area. Such a plan should be linked to an existing transition plan. It should also be continuously updated, as needs and the potential for improvement constantly change due to changes in strategy, the emergence of new technological solutions, etc.

The investment plan should also consider the critical resources discussed in B3.3, even if the organisation’s business model is not based on them.

Organisations that require little or no fixed assets can still use their influence to improve their social and environmental impact.

The environmental footprint of products and services can best be assessed from a life cycle perspective (see the section on ‘Environmental sustainability’ in the introductory chapter on ECOnGOOD values). The investment plan should use the results of these life cycle analyses to identify and prioritise meaningful investments. Emphasis should be placed on those phases of the life cycle of products and services that can be controlled and/or influenced by the organisation, or where the environmental impact is significant.

Preliminary remark: The significance of this aspect depends on the extent of investment in financial assets. Organisations that make little or no investment (e.g. less than 5% of total investments) in financial assets can disregard this aspect.

The six Principles for Responsible Investing (PRI) are a good starting point for dealing with investments in financial assets. Developed by the UN in partnership with the UNEP Finance Initiative and the UN Global Compact, these principles guide investors in integrating environmental, social, and governance (ESG) factors into their decisions:

1. Incorporate ESG issues into investment analysis and decision-making.
2. Be active owners and integrate ESG into ownership policies and practices.
3. Seek disclosure on ESG issues from invested entities.
4. Promote acceptance and implementation of the Principles across the industry.
5. Collaborate to enhance effectiveness in implementing the Principles.
6. Report on activities and progress towards implementing the Principles.

These principles aim to align investment practices with long-term value creation and societal wellbeing. While PRI and ESG frameworks (see B1.3) are foundational, more advanced and holistic approaches exist:

1. Double Materiality Assessment:

   • Considers both the financial impact of sustainability risks and the impact of the investment on society and the environment.
   • Used in the EU’s Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS).

2. Planetary Boundaries & Science-Based Targets:

   • Aligns investments with ecological thresholds (e.g. CO₂ budgets, biodiversity limits).
   • Helps avoid greenwashing by grounding decisions in scientific metrics.

3. Impact Investing & SDG Alignment:

   • Focuses on measurable positive outcomes (e.g. education, clean energy).
   • Uses tools like the Impact Management Project or IRIS + metrics.

4. Controversy & Governance Risk Screening:

   • Evaluates past fines, scandals, or governance failures.
   • Helps investors avoid reputational and regulatory risks.

5. Lifecycle & Supply Chain Analysis:

   • Goes beyond entity-level ESG to assess upstream and downstream impacts.
   • Especially relevant for sectors like fashion, food, and tech.

A quick note for organizations that don’t have the resources to delve more deeply into the topic: When it comes to investment funds, there are generally two different sustainability approaches - ESG and SRI. ESG is a broad evaluation framework (Environmental, Social, Governance), while SRI is a strict exclusionary and positive screening approach that often invests in a much more selective manner. In short: ESG is broad, flexible, and often risk-oriented. SRI is value-oriented, selective, and often stricter than ESG.

The ecological and social consequences of the global (over)use of critical resources will lead to measures being taken to replace these resources. This may result in the withdrawal from certain sectors or entire industries. If such resources are indispensable to the organisation’s business model, neglecting the necessary phase-out will result in a negative assessment. Measures to reduce dependency are recognised according to their effectiveness.

Critical resources are resources that have significant negative effects - in the short or long term - on the environment, human rights, human health, and safety during extraction, treatment, use, and/or disposal. Resources, especially non-renewable ones, are also to be classified as critical if, according to scientific findings, their consumption at the current rate will soon lead to them no longer being available to humanity in sufficient quantities, or if their overuse has led to planetary boundaries being exceeded or soon to be exceeded at current rates of use. Critical resources can be fossil fuels, nuclear power, resources from conflict areas, genetically modified crops, pesticides, antibiotics in farming, asbestos and other dangerous substances for workers, and hazardous substances e.g. those listed in the EU Regulation concerning the Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH), more specifically, the Substances of Very High Concern (SVHC).

The ability to reduce and/or eliminate dependence on critical resources is an important factor in the (future) success of the organisation. This also applies if the organisation’s goods or services depend on input from suppliers in critical sectors or if the business model of important customers is based on critical resources.

For measures already taken to reduce dependence on, or consumption of, critical resources, negative points can be reduced in proportion to their effect.

This topic is based on the understanding of an organisation as a community of those who work for it, manage it, support it, and thus shape it. Specifically, it is about involving stakeholders in decision-making on issues arising from the responsibilities as an owner. As a rule, these issues concern strategic matters that have a significant impact on the organization’s continued existence and direction and, as a result, may also have a significant impact on stakeholders. Two concepts are relevant in this context: co-determination (B4.1) and shared ownership (B4.2).

An ECOnGOOD organisation...

• enables its stakeholders’ participation in strategic decisions through the highest possible transparency about organisational activity, strategy, goals, sources of decision-making, and the expected consequences of decisions.
• goes far beyond statutory rights in matters of co-determination and anchors additional co-determination options in statutes and organisational agreements with legal relevance.
• continuously develops joint decision-making processes as a learning organisation.
• prepares relevant stakeholders for the acquisition of co-ownership, where possible.

Initial questions

• Who are the owners of our organisation?
• How are the representation and consideration of the interests of key stakeholders embedded in our organization’s legal form, structures, or other instruments with regard to strategic decisions that are typically reserved for owners?
• How is an appropriate and equitable balance of the interests of all key stakeholders ensured?
• What is our organization’s position on the potential participation of additional stakeholders in ownership? What are the implications of this?
• How do we monitor, measure, and adapt stakeholder engagement in our organisation?

Involving stakeholders in decisions reserved for owners or their representatives (this concerns co-determination in strategic decisions; operational co-determination is dealt with in A4, C4, D4, and E4) enhances the quality and sustainability of decisions across all types of organisation (commercial enterprises, non-profits, public institutions, membership and community organisations) and builds trust and credibility.

Co-determination at the level of ownership responsibility concerns the strategic development of business activities. In the levels of evaluation Advanced, Experienced, and Exemplary, the participation of employees and other stakeholders entails more and more strategic decisions concerning the organisation. Examples can be investment decisions and investment planning, choice of suppliers, or decisions to enter new market segments, restructure debt, change the legal form of the organisation, create subsidiaries or functional units, or conduct mergers and acquisitions, as well as strategic shifts, restructuring, relocation or closures of plants, and contingency plans. Depending on the size of the organisation, elected representatives may exercise co-determination on behalf of employees and stakeholders.

In the evaluation level, First Steps, development of the concept for the gradual expansion of co-decision-making at the level of ownership responsibility can build on the experience already gained in topics A4, C4, D4, and E4. Additionally, employees and other stakeholders are trained to understand how these decisions influence and interact with ownership responsibility and liability. At all levels, co-determination is more than voicing opinions. It is about actually influencing decisions that affect the organisation and handling the consequences of these decisions. Co-determination spreads responsibility and entails both the advantages of successful decisions and the handling of failures as a team.

Applying Arnstein’s Ladder of Participation (see also C4) to organisations offers a powerful lens for evaluating how inclusive and empowering decision-making processes really are.

Small organisations are likely to have more informal forms of transparency and co-determination. However, even in this case, information on the transparency of strategic information and decisions made jointly with stakeholders, including the reason, regularity/frequency, and outcome, should be provided in as much detail as possible.

The Economy for the Common Good aims to involve all stakeholders actively participating in value creation in both operational and strategic—particularly financial—decisions, and to distribute the value created in proportion to their contribution. Since ownership rights in most organizations rest with the owners, the Economy for the Common Good recommends making active stakeholders owners whenever possible.

Certain types of organisations are already geared towards the common good by virtue of their statutes. Others have ownership structures that facilitate such orientation. However, regardless of an organisation’s legal form, there are almost always possibilities to pursue an orientation towards the common good. Due to the vast number of organisational and legal forms, it is not possible to go into detail here. However, a basic distinction can be made:

• Non-profits and public entities: In most cases no owners; governed by mission and public interest.
• Steward-owned models: Purpose-driven, with control held by stewards not investors.
• Member-based organisations: Owned and governed by members, often democratically.
• For-profit entities: Ownership tied to capital investment and profit rights.

Regardless of the organisational and legal form, the following is particularly important from the perspective of the Economy for the Common Good regarding owners/boards:

• Their attitude corresponds to the ECOnGOOD values.
• They are committed to maintaining/strengthening the independence of the organisation while supporting its mission and ensuring its viability.
• They are willing to contribute their skills, knowledge, and resources in a strategically strengthening manner.
• They ensure that the organisation’s activities are geared towards the common good.

Even though considerable progress has been made worldwide in recent years in banning unfair business practices, there is still a whole range of aggressive, extractive, exploitative, and other illegitimate practices in use. In many cases, such business practices serve to maximize profits without regard for the impact they have on other stakeholders, in order to distribute those profits unilaterally to owners or financial partners and thereby withdraw them from the organization. It is mostly profit-oriented companies that engage in such practices, but other organisations are not immune either (as demonstrated by the example of public-sector credit institutions that have been proven to be involved in so-called cum-cum transactions).

What constitutes aggressive, extractive, exploitative, and other illegitimate business practices? Below is a brief description of the different categories, along with some examples. These business practices represent distinct but often overlapping strategies that prioritise short-term gain, control, and profit at the expense of sustainability, equity, or ethics.

1. Aggressive business practices: These are high-pressure, confrontational tactics used to dominate markets or competitors. They undermine fair competition, concentrate power, and can destabilise entire sectors or communities. Some typical examples are hostile takeovers, predatory pricing to eliminate rivals, legal intimidation (e.g. SLAPP lawsuits), and covert or corruption-like lobbying to weaken regulations.

2. Extractive business practices: These focus on extracting value from natural or social systems without adequate reinvestment or regeneration. They are characterised by rent-seeking from the commodification of raw materials, while social and environmental costs are externalised, often associated with corruption, the displacement of communities, and/or the destruction of ecosystems, especially in the Global South. Typical examples include deforestation, overfishing, and oil, gas, or mining projects that destroy the environment and violate indigenous rights.

3. Exploitative business practices: These involve leveraging power imbalances to maximise profit often at the expense of workers, consumers, or vulnerable groups. They are often justified as steps towards “efficiency” or “competitive advantage”, but operate in legal grey zones and violate ethical norms. Examples are job cuts despite good business conditions, relocation of jobs to low-wage countries with lower social and environmental standards, underpaid labor, unsafe working conditions, price gouging during crises, monopolistic behavior, and manipulative or psychological pressure.

4. Other illegitimate business practices (without claiming to be exhaustive) include in particular:

• Speculative financial transactions that create value through short-term trading, often detached from real economic activities.
• Data extractivism, which monetises personal data without informed consent, creates surveillance economies, and undermines privacy.
• Obfuscation of the supply chain by outsourcing harm to distant suppliers (e.g., child labour, toxic waste) to evade accountability through complexity.
• Greenwashing and social washing, which use misleading claims about sustainability or ethics to deflect criticism and undermine real change.

Employees are seen as a key part of the organisation, being given opportunities to participate and take responsibility whilst being treated fairly across all levels of the organisation. The organisation cares for diversity in many different dimensions and guarantees adequate working conditions, especially with a focus on health and safety.

An ECOnGOOD organisation...

• 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 personal and professional development.
• sees diversity as a strength.
• respects health and safety as an integral part of its culture.

Initial questions

• What does human dignity in the workplace mean for our organisation?
• How can we take a more dignified approach within our organisation? 
• How would employees across different hierarchy levels and departments describe the organisation's people-related practices and policies? Would they use similar terms?

In a common good-oriented organisation, the atmosphere in the workplace is shaped by mutual respect, appreciation, and trust. Mistakes are handled constructively. Conflicts are seen as opportunities for improvement and are resolved on equal footing. Employees and teams have a high degree of freedom and autonomy in how they carry out their tasks. The organisation creates an environment where individual strengths and talents can flourish and employees find meaning in their work.

An employee-focused organisational culture manifests, for example, in the following areas:

• Respect, appreciation, tolerance of mistakes, constructive handling of conflicts.
• Non-material appreciation (e.g. appreciation circles).
• Successes are celebrated.
• Mistakes are regarded as learning opportunities (neutral or positive).
• Conflict is seen as a positive opportunity for finding a better solution.
• High degree of competence among employees in conflict resolution.
• Personal development, fostering strengths, and creating meaning in jobs.
• Employees are given a wide range of possibilities for professional and personal development.
• Employees are assigned tasks on the basis of their talents and strengths, and find their work meaningful.
• Clear distribution of tasks, allocation of responsibilities, structures, and self-management.
• Employees have a high degree of personal responsibility, i.e. they can make independent decisions and be involved as much as desired.
• Employees are held accountable for their responsibilities.

When answering above please also consider if the organisation has a code of ethics as well as the complaints-handling mechanisms incl. report channel to report misconduct, whistleblowing, ombudsman, etc.

Employees who leave the organisation because their temporary contract or apprenticeship ends, or they retire, are not usually counted in the employee turnover rate. Please make the premises of your calculation clear.

Health promotion and occupational safety are systemically embedded throughout the entire organisation and actively supported. Preventive measures and services help to maintain, improve, and restore their good health.

The World Health Organisation states that “health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity. The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic or social condition.” Practical implementation in the organisation’s day-to-day operations can be evaluated through:

• Please consider the relevant local legislation for guidance/definitions around accidents, sick leave, etc
• Measures for occupational health and safety, i.e. an ergonomic and healthy working environment (lighting, ergonomic furniture, electromagnetic fields, air quality and pollutants, noise).
• Identifying high-risk groups and measures to minimise risks.
• Safeguarding and protecting the health of employees, raising awareness, and offering courses on health issues: prevention of addictions, dietary guidance, sport and exercise schemes, measures to prevent burnout, stress, and depression, rehabilitation.
• Coaching, monitoring, mediation, psychological support, conflict, and crisis management.
• Leadership and health: raising management’s awareness of the issues around physical and mental health in the workplace and occupational health and safety.
• Dealing with and providing adjustments to support employees unable to pursue their work in a regular manner due to an accident, disease, care requirements, etc.

The diversity of employees in terms of professional experience, age, gender, origin, cultural background, and personal strengths is valued as a resource, and differences are seen as enriching for the organisation. All employees have equal opportunities and access within the organisation, based on their qualifications and personal preferences, aligned with organisational development plans. The organisation aims to overcome the discrimination of individuals and groups, both structurally and individually.

Possible measures could be:

• Adjustments of the workspace, tools, and work time to allow for religious, health-related, age-related, or other special needs.
• Barrier-free access for the physically impaired.
• Proactive collaboration with inclusion agencies and public employment offices to attract people with special needs as employees.
• Special training for the inclusion of employees with cultural, social, or other special needs.
• Fostering inter-cultural, inter-generational, and inter-disciplinary exchange in suitable formats (e.g. workshops, team building excursions, etc.).
• Paid leave or extra flexible work times to increase equal opportunities (e.g. for employees with dependants, special training to use aids, etc.).
• Investment in technology (e.g. braille translators), assistance (e.g. sign language interpreters), social needs (e.g. establishing an organisational child care), communication (e.g. language courses, writing trainings, buddy programmes).
• Adjustments in recruitment and placement (giving preference to under-represented groups).
• Consideration of social diversity in the local area when filling specialist and management positions to achieve above-average representation.

Organisations should be aware of the problems that lead to harmful working environments and take action to address them.

During the on-site visit, the auditor will also speak with employees. If there is conflicting information, in case of doubt, the employees' point of view is decisive. It is important to assess the credibility of the statements.

Employment contracts are the basis on which organisations and employees agree how they cooperate. How resources such as income, time, social security, or work-life balance are structured and allocated has a significant impact on the motivation, perceived security, and wellbeing of employees. The stated objective is individual structuring of employment contracts alongside extensive self-determination on the part of employees.

An ECOnGOOD organisation...

• is continually and contractually committed to improving working conditions.
• allows for a high degree of individualisation in employment contracts.
• discusses the basis of working conditions openly with all employees.
• empowers its employees to co-determine their own salary taking into account both the good of the organization and their own

Initial Questions

• How can our employment contracts be adapted to individual needs and at the same time be based on solidarity and fairness?
• How do we determine if the remuneration is appropriate for the contracted performance, and the appropriate working hours have been allocated for it?
• What positive/negative influence on the wellbeing of our employees do the contractually agreed working conditions have?
• How are cooperation and solidarity established among employees, including managers, concerning fair remuneration, workload, and work models?

Fair remuneration of staff significantly influences the culture and development of an organisation. Earnings should be based as transparently as possible on performance, responsibility, risks, and needs of staff members, as well as on individually defined benchmarks and incentive structures set by the organisation. The whole theme is not applicable for free lances and one-person companies.

Offering a minimum wage or contracts aligned with collective bargaining agreements is a starting point, but it might not be enough for fair remuneration and employee wellbeing. Sometimes, injustices and wage disparities arise from the choice of the correct salary level within the national collective bargaining agreement. Also, a living wage should be considered, as well as transparent remuneration schemes and participatory practices to co-determine a fair remuneration for both parties.

Highest to lowest pay ratio calculation: The earnings spread includes all staff.

Highest to Lowest Pay Ratio = Total Annual Compensation of Highest Paid Person / Total Annual Compensation of Lowest Paid Person (standardised for a full-time position) x 100%

Total annual compensation includes base salary, bonuses, overtime pay, stock/equity grants, non-cash benefits, retirement contributions, and other incentives.

The indicator is normally expressed as a proportion ([highest to lowest pay ratio]:1).

The difference in earnings can also be evaluated for organisational units or functional roles of staff. The difference between the earnings of staff in comparable roles or units can increase when an organisation implements individual wage components.

“With appropriate legitimation” means that all employees are involved in a participatory process and have a voting right that allows for the discarding of the proposed earnings-spread. The maximum highest to lowest pay ratio may not exceed 20:1, see also C2.4 negative aspect.

Tools for determining the living wage A living wage is the minimum income necessary for a person to meet their basic needs and maintain a decent standard of living. This includes food, housing, healthcare, clothing, transportation, childcare (if applicable), education, and some savings or emergency funds. In many cases, the minimum wage, if stated in national legislation, is not enough to be considered a living wage. Anyway, a living wage should never be less than the minimum wage. The living wage depends on the region-specific context and is usually calculated for full-time work. You can consult https://www.livingcost.org to check the cost of living in different countries and cities. Please consult the Additional Information document for country-specific recommendations and tools. The threshold for poverty risk is 60% of the median net equivalent income of the total population. The net equivalent income is systematically lower than the gross income from employed work. A living wage is more than 60% of a country's median gross income.

Transparent remuneration schemes Transparent remuneration schemes refer to pay structures and compensation policies where staff pay criteria are openly communicated and consistently applied. The goal is to ensure clarity, fairness, equity, and trust in how staff members are rewarded for their work. For an organisation to self-assess transparency on remuneration schemes, the following should be considered:

• Defined salary ranges for each role or grade based on objective criteria.
• Published criteria for raises and promotions, as well as for bonuses and incentives.
• Published the highest to lowest pay ratio. Internal publishing of all staff salaries can also be considered a best practice. However, this might encounter cultural resistance and is not legal in some countries. A good solution can be the internal publication of salaries in an anonymous way. Important steps while trying to set up transparency on remuneration is training managers on open and consistent communication and discussion with employees on this matter, and training employees to understand how their pay is determined alongside the financial situation of the organisation.

Self-determination of earnings Self-determination of earnings is a remuneration approach where employees have a say — or full control — over setting their compensation within predefined boundaries or frameworks. This is important for organisations seeking to build trust, autonomy, and responsibility in their culture. In order to ensure fairness and success in the self-determination of earnings:

• This process should be based on clearly defined core-principles, budget limits, and compensation philosophy (result-based, time-based, special need-based, etc.).
• Transparency of remuneration schemes should already be well developed (see above).
• Employees should be educated on financial literacy (how salaries are typically determined, budgets and profit margins, transparency about the organisation's financial health, etc.).
• Templates, structures, and processes for self, peer, and manager assessments should be developed.
• Regular salary reviews should be conducted to check for gaps, fairness, and budget alignment. Please note that the self-determination of earnings should apply to salary components beyond the fixed base salary, which should always be equal for anyone for the same job in the same country. Also, it should be considered that individual bargaining is inherently more vulnerable than structured negotiations, such as collective bargaining agreements (CBAs), which are strongly recommended to protect employees.

Gender pay gap = (Avarage gross hourly pay level of male employees - Avarage gross hourly pay level of female employees) / Avarage gross hourly pay level of male employees x 100 All employees shall be included in the calculation

Working time is life time. The efficient and effective use of employees’ labour is a direct expression of respectful and appreciative interaction within the organisation. The reduction and individualisation of employees' working time are declared goals of the organisation to promote the balance between participation in work and social life. The whole theme is not applicable for free lances and one-person companies.

In case of organisations based on volunteer work the focus should be on fair work distribution and the avoidance of overwork to prevent volunteer burnout. Also, the indicator: “Standard full-time fixed weekly working hours in the organisation” can be omitted.

Standard working hours per week refer to full-time jobs and serve as a reference value for part-time employment. Overtime must always be compensated in the form of free time, if the employee doesn’t prefer monetary compensation. Overtime can be performed to meet special business needs if it doesn’t exceed 10% of weekly working time on a permanent basis. If overtime cannot be documented or a realistic estimate of overtime is not possible, a flat rate of four hours per week should be applied.

Total Worked Hours = Standard Hours + Overtime Hours

Participatory or self-determination means that employees are involved appropriately into the working time arrangements by consent, consensus or democratically (majority votes). Work time structure schemes can be different for organisational units, depending on the work performed. Core working hours can be a means to ensure the functioning of work processes (e.g. availability and communication, reliable industrial production, etc.) and increase the employee’s flexibility at the same time. The documentation of work time should enable both the employee and the employer to monitor and analyse work time and performance.

The contractually agreed employment relationship has a significant influence on employees’ wellbeing. The individual design of the employment relationship and job security make it easier for employees to plan for the long term and enable better work-life balance for childcare, caring for elderly people, voluntary work, or political office. The whole theme is not applicable for free lances and one-person companies.

The role of executives and management as role models must be given special attention.

Employees’ satisfaction on work-life balance might be assessed via a survey or other documented ways. To check the robustness of the results, the percentage of employees who answered the consultation out of the total number of employees should be disclosed.

Definitions:

• Work models: A work model is a set of guidelines governing how, where and when work is performed and can apply to individual employees as well as to teams or entire organisations. Work models can be traditional models (full-time, part-time, shift-time), but also remote work (done entirely off-site), hybrid work (combination of on site and remote work), flexible hours (employees choose when to work, within limits, and the focus is on output over strict hours), job sharing (two people share a full-time position, allowing for part-time jobs through collaboration), etc. Please note that the possibility to actually use these working models might vary from country to country according to national regulations.
• Flexible work models: are employment arrangements that allow variation in when, where, or how much an employee works — such as remote/hybrid work, flexible hours, compressed weeks, part-time, or job sharing — as opposed to a fixed schedule and location. They are provided by the organisation and available for use by employees.
• Individually adapted work models: tailor-made solutions for individual employees.

Restriction of self-determination is possible if there are existential operational concerns (in consultation with the workers’ council or an equivalent representative body).

Employment contracts, including oral employment contracts, that do not provide a livelihood for employees or shift entrepreneurial risks to employees, are viewed as an abuse of power. This is exploitation by the organisation and self-exploitation by the employees. With regard to external staff, it is important to consider whether the organisation buys a service or buys working time. The former is stakeholder group A (suppliers) and the latter is this stakeholder group. However, the organisation must ensure that there is no bogus self-employment. Subcontractors working as regular staff for the organisation and with organisational colleagues should be treated as internal staff. The whole theme is not applicable for free lances and one-person companies.

This aspect is about the overall picture of unethical behaviour and employment practices. The definition of temporary work includes agency workers, leased personnel, sub-contracted labour, and seasonal workers if these employees perform a core part of the work on a regular basis. In this case, these workers count as employees and not as suppliers. Risks or disadvantages for temporary workers might be related to social security, health care duties for dependents, a thirteen-month salary, and temporary leave. Violation of laws in this domain might include violation of the maximum duration of fixed-term employment contracts or of the maximum number of re-appointments of an employee with a fixed-term contract without objective reasons. If the organisation provides vocational training or an educational internship, attention should be given to reflect the value that the trainee/intern brings in and not to treat them as a cheap workforce. The final remuneration should be guided by the standard payment for a trained person, while taking into account educational expenses and lack of experience. Voluntary activities of employees for the employer must be assessed separately, as they are not part of duties, but voluntary engagement. From the point of view of self-exploitation, special attention must be paid to training and reporting, for example, at large charitable institutions or for volunteers at large-scale events.

The indicator "Fixed-term contract non-conversion rate at legal maximum (%)" measures the extent to which fixed-term employment contracts that reach (or come close to) the legal maximum duration or number of renewals are terminated rather than converted into permanent contracts. A high rate may signal a systematic practice of exhausting the legal limits of temporary employment to avoid granting workers permanent status and its associated protections, rather than a genuine, occasional business need. Formula: (Number of fixed-term contracts that reached the legal maximum threshold — defined as whichever limit is hit first under applicable law: (a) maximum cumulative      duration, or (b) maximum number of renewals — and were terminated without conversion to a permanent contract) / (Total number of fixed-term contracts that reached that same legal maximum threshold in the reporting period) × 100 If the rate is high, this quantitative indicator should always be read together with the companion qualitative indicator: "Were fixed-term workers hired to fill roles vacated by previous fixed-term contracts that were not renewed/converted in the last 12 months? (Yes/No)" to identify any hidden structural turnover situations, i.e., situations in which the organization doesn't actually reduce staffing, but systematically replaces the person in the role to avoid permanent employment. This is a critical combination from an ethical standpoint, as it indicates a deliberate and evasive use of legal limits.

A lump-sum contract is an agreement in which a contractor commits to completing a defined scope of work for a single, fixed total price, agreed in advance regardless of the contractor's actual costs. It is fully legal and widely recognised worldwide — codified in civil law systems and standard in international frameworks such as FIDIC, as well as in public procurement regulations. Ethical risks arise not from the instrument itself but from how it is used: information asymmetry (incomplete specifications shifting unfair risk onto the contractor), incentives to cut corners on quality or safety to protect margins, predatory bidding strategies that rely on costly change orders to recover profit, downward pressure on subcontractors and workers when margins tighten, and unequal bargaining power that can force weaker parties into unfavorable terms. To use lump-sum contracts ethically, attention should focus on: providing clear, complete, and accurate project specifications; ensuring genuine good-faith negotiation and fair risk allocation between parties; maintaining transparency around potential variations and change-order pricing; and safeguarding fair treatment of subcontractors and labor throughout the supply chain.

A zero-hours contract is a form of employment agreement in which the employer does not guarantee the worker any minimum number of working hours. The employee is called in to work only when needed and is paid solely for the hours actually worked, while having no fixed or predictable schedule. Zero-hours contracts are legal, but regulation varies significantly by country. In some countries this practice is permitted but subject to specific rules such as bans on exclusivity clauses preventing workers from taking other jobs. Other countries regulate similar arrangements more strictly by allowing comparable flexibility but with tighter legal limits and stronger worker protections. This type of contract is frequently debated politically and socially due to several ethical concerns: it shifts income uncertainty almost entirely onto the worker, who cannot reliably plan finances or personal life; it creates a power imbalance, since workers may feel pressured to accept every shift offered for fear of not being called again, even without a formal obligation to do so; it can limit access to benefits like paid leave, sick pay, or mortgage eligibility due to irregular, hard-to-prove income; and it can prevent workers from securing more stable, additional employment because of on-call availability requirements. Critics argue that the "flexibility" these contracts offer often benefits employers far more than workers, raising concerns about disguised exploitation

Every organisation plays a significant role in increasing the environmental awareness of employees. An organisation can set a good example and provide incentive policies to promote environmental awareness and environmentally friendly practices of employees in their daily routines at work. This theme is closely related to E3. All offers, incentives, and products of an organisation that are targeted to change the behaviour of the organisation’s employees towards environmentally friendly practices in private or professional life are evaluated here. How well an organisation supports the employees is measured by the changes employees voluntarily adopt.

An ECOnGOOD organisation...

• develops environmental awareness, and promotes environmentally friendly behaviour of its workforce.
• creates a framework for the implementation of projects that foster sustainable behaviour.
• contributes to the implementation of key environmental measures through its organisational culture and internal processes.

Initial questions

• How do we foster an environmentally respectful diet for our employees during work hours?
• How do we support environmentally friendly mobility, in particular commuting to work?
• What measures are in place to promote environmentally sustainable practices among employees?

Our diet causes one-third of global greenhouse gas emissions (WWF). Reversing the effects of this environmental damage depends, among other factors, on increasing awareness of the environmental impacts of food production and consumption and encouraging changes in people’s eating habits.

What can be considered environmentally friendly nutrition:

• Seasonal fruit, vegetables, and cereals from the region.
• Organic food.
• Fish from local waters.
• Vegan and vegetarian diets.
• Fair trade products.

Other environmentally-friendly practices can be:

• Strategies and projects to reduce food waste.
• Strategies and projects to save energy in the kitchen.

Environmental friendly food-packaging:

• Prefer bulk buying food.
• Prefer washable to disposable dishware.
• If disposable dishware is really needed, prefer that which is biodegradable and compostable.

Examples for internal offers:

• Canteen.
• Fruit baskets.
• Local organic fruit and vegetable box from the farmer once a week.
• Local organic farmer's truck coming once a week for interested employees to do their grocery shopping.
• Development of an organisational purchasing group among the employees.

Examples for external offers:

• Cooperation with local restaurants or food services that offer environmentally friendly nutrition alternatives – e.g. giving discounts to employees who select these options or offering lunch tickets valid in environmentally-friendly food shops and restaurants.
• Cooperation with a nutritionist to set up proper diet habits.

Approximately 30% of global CO₂ emissions are caused by transportation. The majority of this (approximately 24%) is attributable to domestic transportation. Of this, passenger cars are the main source, accounting for 60%, with approximately 40% of this relating to commuting (European Parliament, 2022). Therefore, home-to-work mobility represents a significant factor in reducing emissions of this kind. GHG Protocol Scope 3 Category 7 emissions from employee commuting are considered here.

If an organisation choose to disclose Scope 3 Greenhouse gas emissions, Scope 3 Category 7 emissions from employee commuting in t CO₂ equivalent (T.T.) should be reported in this aspect.

Active mobility encompasses all forms of transport that are based wholly or partly on muscle power; cycling and walking are the most prominent examples, but it also includes forms of mobility such as scooters and skateboards, which may not immediately spring to mind.

What can be considered environmentally friendly mobility:

• Active mobility.
• Collective means of transportation (bus, train, metro, etc.).
• Combined mobility (car + bus, car + train, bus + train, train + bike, etc.), provided that the majority of the distance travelled is covered by low- or zero-emission modes of transport.
• Car pooling.
• Car sharing
• E-mobility (e.g., electric bicycles, electric scooters, electric cars), as a low- or zero-emission mode of transport, particularly where charged using renewable energy infrastructure provided by the organisation (e.g., on-site solar-powered charging stations)

Depending on the context (production site on the outskirts of town, office in the centre, remote location, etc.) there is a variety of ways to raise awareness and encourage employees to adopt more environmentally sustainable means of transport:

• Financial incentives to use public transport.
• Actively organising car sharing.
• Providing bicycles for hire.
• Participation in external cycling initiatives.
• An eco-friendly car policy.
• Fuel-efficient driving training.
• Designated bicycle parking.
• A reduction of distances travelled through technology and working from home.
• A shuttle service provided by the organisation.
• Preferential treatment for car-pooling.
• Provision of mobility budgets for environmentally friendly options, e.g. car sharing, public transport, bike sharing.
• Provision of bicycles and secure, covered bicycle parking.
• Avoiding company cars, or investment/leasing of environmentally friendly cars.
• Infrastructure for electrical mobility at organisational premises, e.g. charging stations for electric vehicles.

Establishing environmentally friendly behaviour needs knowledge, guidance, and practice. Organisations that develop and maintain an in-house concept of environmentally friendly behaviour as part of their organisational culture accept their responsibilities and can help employees to change their habits.

• Regular employee surveys to evaluate the overall recognition of the organisation’s environmental policy.
• Surveys to invite employees to bring in ideas for the design and implementation of environmentally friendly measures or offers.
• Involving employees in environmental decision-making.
• Informative activities: promoting environmental themes in the organisation’s suggestion box, organising specific events, placing posters around the office, addressing environmental matters in newsletters, etc.
• Environmental friendliness should be part of the organisation’s training programmes – both in terms of content and training procedures.
• Additional specific trainings for environmental friendliness: environmental footprint workshops, organising excursions to deepen environmental awareness.
• Budgets for external environmental projects set up or proposed by the workforce.
• senior managers within the organisation personally use a company bicycle or a low-emission vehicle for business travel, in line with the organisation's sustainable mobility policy.
• Recruitment procedures that take environmental awareness into account.
• ‘Green benefits’ can also support employees to adopt environmentally friendly behaviour in their private lives. Examples are financial support for private actions like thermal insulation, contributions to the cost of housing instead of a company car, and discounts at partner organisations for environmentally friendly consumption.

An organisation’s failure to address environmentally harmful practices or a wasteful treatment of resources ultimately harms society. For that reason, it is necessary to identify and name these critical, harmful issues and take actions to avert harm.

• Each case is assessed individually, and then the points are combined. A maximum of 100 points may be deducted.

Preliminary note: For one-person organisations, C4 is not applicable. The organisation is a place for active participation and involvement of all employees. All employees can contribute their ideas, suggestions, or creativity, thereby assuming shared responsibility and supporting the mission of the organisation. They increasingly identify with the organisation, and the combined wisdom of the many is put to work.

An ECOnGOOD organisation...

• makes all essential and critical information transparent, easily accessible, and understandable for its employees.
• has a management team that is based on the legitimation and evaluation of the employees.
• enables individual teams to have a high degree of responsibility and freedom to make decisions.
• allows employees to submit their interests, contributions, or aspirations, and participate in decision-making.

Initial questions

• How is the value of transparency and participation lived in our organisation?
• What previous experiences have we gained from transparent communication and participation?
• What fears and reservations exist within our organisation with regard to increased transparency and co-determination?
• What advantages and potential does increased transparency and co-determination offer us?
• When was the last time employee input meaningfully changed a major decision?

Transparency is an essential prerequisite for co-determination. If employees have access to all essential information needed for the execution of the assigned roles, responsibilities, and tasks, they can form an opinion and actively contribute. In principle, all data should be freely available and presented in a way that is easy for employees to understand. Some jurisdictions or sectors have data protection rules that legally restrict access to certain information. The same can be the case for specific legal forms. However, ECOnGOOD organisations should, within the existing legal framework, try to exhaust all possibilities to share critical and essential information with their employees.

• Examples of critical data: records of the board of directors, financial data, the salary structure, decisions on hiring and firing, and investment planning. Essential data: all data necessary for making organisational decisions or those vital to the organisation’s objectives.

• As already mentioned above, there are limits to transparency: the statutory rules on data protection, applicable legal data protection, employees’ confidential personal information, and the organisation’s protected intellectual property. Nevertheless, data protection laws and internal rules should not be used as a general reason to deny transparency. Rather, the organisation should establish internal transparency and public transparency with data protection management wherever possible.

Employees are in direct and ongoing contact with their managers as part of their daily work. They can therefore assess, based on their own experience, how effective their managers’ leadership skills actually are. As a result, they play a vital role in evaluating the competence of managers and candidates for leadership positions. Employee involvement in the hiring and evaluation of managers thus contributes directly to the managers’ acceptance and to the organisation’s success. Employee feedback is also an important source of suggestions on how managers can and should develop further for the benefit of everyone. Organisations are well advised to take critical feedback from employees seriously, as it points to areas for development and potential and helps to avert problems in the relationship between employees and managers at an early stage.

• “Periodical” election means re-election of the management after an agreed period.
• In terms of voting procedures, a “consensual” method is considered preferable to (qualified) majority vote decision-making methods. “Consensual” methods for decision-making seek the highest possible consensus among all parties involved, e.g. “consensus moderation” in sociocracy or “systemic consensus” using the Systemic Consensus Principle.
• Initiating the removal of managers from their positions by employees is comparable to pulling the emergency brake on a train. Employees should always have the opportunity to propose such a step, providing a justification.
• The assessment of managers should both ensure the highest possible level of anonymity for employees and contain as much information as possible so that management can take action based on the feedback.
• Startups and newly founded organizations have the opportunity to pursue a participatory and transparent leadership policy from the very beginning - or at the latest when the number of employees begins to grow.

In principle, employees have both technical and practical expertise required in their respective working environments. At the team level, employees make decisions independently and comprehensively, without instructions from above, but in close cooperation with all organisational stakeholders affected by the decisions. On all other levels, employees have the opportunity to help shape the organisation according to the bottom-up principle. Co-determination also means collective responsibility. Employees’ right to co-determination in organisational decisions is based on their willingness to actively seek information and learn in order to make informed decisions. To this end, the organisation creates conditions to enable employees to make informed decisions and supports its employees in doing so. Employee co-determination does not apply to all decisions. It is about maintaining the right balance between participation, operational efficiency, and effectiveness at all times.

In organisations, decisions are typically categorised into strategic, tactical, and operational levels:

• Strategic decisions are long-term and shape the overall direction of the organisation. They involve high-level goals such as entering new markets, restructuring, or defining core values. These decisions are usually made by owners or top management and have a broad, lasting impact.
• Tactical decisions translate strategy into action. They are medium-term and focus on resource allocation, departmental planning, or process optimisation. Middle managers usually handle these decisions to ensure strategic goals are implemented effectively.
• Operational decisions are short-term and routine. They deal with day-to-day activities like scheduling, customer service, or inventory management. These decisions are made at the supervisory or team level and ensure smooth functioning of daily operations.

Depending on their consequences, personnel decisions can span all of these categories. This depends not least on the size of the organization.

The question of whether and how employees should be involved applies to decision-making processes at all levels of the organization to which they can contribute their experience or expertise, or whose effects directly affect them.

The levels of participation

Organisations can involve their stakeholders at different levels of participation: from ‘no participation’, instrumentalisation and token participation, to involvement and co-determination, to decision-making power.

Political and social scientists have developed various models to illustrate this. These models can be used to assess the extent to which decision-makers within the organisation involve stakeholders in decision-making processes.

The best-known model is probably the one published in 1969 by political scientist Sherry Arnstein, known as the ‘Ladder of Citizen Participation’. Her participation ladder forms the basis for many other tiered models, such as the model developed by social scientists Michael Wright, Martina Block, and Hella von Unger, ‘Levels of Participation in Health Promotion’ (2007). Below is a brief summary of this model (with the corresponding levels of Arnstein’s model indicated in brackets), which can serve as a tool for classifying participation in virtually any type of organisation.

No participation, external control

Level 1 – Instrumentalisation/token participation (Manipulation): The interests of decision-makers are at the forefront. People from stakeholder groups are included for appearances’ sake, as a kind of decoration, so that decision-makers can better represent their interests to the outside world.

Level 2 – Instruction (Therapy): Decision-makers define the stakeholder group’s concerns on their behalf and determine solutions. The stakeholder groups are not consulted. Instead, they are told how they should behave.

Precursors to participation

Level 3 – Information (Informing): Decision-makers inform stakeholder groups about problems and how they intend to solve them.

Level 4 – Hearing (Consultation): Decision-makers are interested in the opinions of their stakeholder groups. They listen to them. However, stakeholders have no control over whether their opinions are taken into account.

Level 5 – Involvement/invitation to consultation (Placation): Decision-makers seek advice from people in the stakeholder groups and take their opinions and interests into account where appropriate.

Participation

Level 6 – Participation (Partnership): People from the stakeholder groups participate in decision-making and help shape processes. However, they are not allowed to make any decisions.

Level 7 – Partial decision-making authority (Delegated Power): Stakeholder groups are allowed to make decisions about parts of a process. Overall responsibility remains with others.

Level 8 – Decision-making power (Citizen Control): People from the stakeholder groups are allowed to make and implement decisions independently and on an equal footing with everyone else.

More than participation: Autonomy

The highest level, which goes beyond participation, is self-organisation. There is no equivalent to the highest level in Arnstein’s model. At this level, people from the stakeholder group implement projects independently. They make all decisions themselves.

In many countries, works councils or staff representatives are committees that have been set up to represent employees and protect their interests within the organisation. Ideally, the works council/staff representatives and management meet regularly to exchange ideas and work together on an equal footing. Decisions take mutual interests into account.

• No works council or comparable employee representation body: If no such body exists and is operational within the organisation, the possibility of employees exercising equivalent co-determination rights should be reviewed. In small organisations, more informal types of co-determination often come into play, whereas in larger organisations anything less than a works council or comparable employee representative body may be interpreted as an obstacle to co-determination.
• Obstruction of works councils or comparable employee representative bodies: Hindering such bodies occurs when the employer uses various legal means to prevent its formation or election. An anonymous survey of employees, feedback from dismissed employees, or information from trade unions (or similar institutions) can be helpful here. The burden of proof can be reversed, so that the organisation must prove that there is no obstruction or that credible supporting measures were taken.
• National differences: In some jurisdictions, it is trade unions that represent employee rights, sometimes even from outside the organisation. It is also not uncommon to find a combination of the two, with trade unions negotiating collective agreements with employers’ associations at the sector level, while works councils deal with internal company matters. However, organisations must comply with the ILO conventions on freedom of association and the right to organise:

1. Convention concerning Freedom of Association and Protection of the Right to Organise, 1948 (No. 87).
2. Convention concerning Right to Organise and Collective Bargaining, 1949 (No. 98).

Customers are respected as individuals and not merely as potential sources of revenue. The aim is to fulfil the customer’s genuine needs in the best possible way. Among other things, this approach requires customer-oriented product development, honest communication on an equal footing, and ease of access at all points of contact with customers. The concept of ethical customer relations may entail foregoing revenue or profit when this is in the customer’s best interests.

An ECOnGOOD organisation...

• takes care to respect customers as equals in the spirit of partnership.
• acts transparently and honestly with the aim of promoting its customers’ welfare and fulfilling their needs.
• designs products and services which are easy to access, useful, and user-friendly, and ensures access to information and ease of access at the point of sale.
• refrains from using deceptive advertising techniques, including exaggerating a product’s positive features, withholding information, and applying sales pressure.

Initial questions

• What are our values and principles regarding customer relations?
• How do we uphold these values within the organisation from the product development phase to customer care?
• What obstacles and barriers do our customers experience in the process of purchasing and using our product or service?

Information about the organisation and its products is aligned to the needs of customers and is authentic, comprehensive, and honest. Complaints and feedback are handled in a pragmatic and solution-oriented way, and are used to improve products, services, and organisational processes. Respectful communication with customers and high-quality products and services lead customers to recommend the organisation.

The levels are evaluated on the basis of three areas:

Advertising:

• Informative website.
• Word-of-mouth marketing resulting from positive customer experiences.
• Exemplary advertising is informative, enlightening, authentic, and respectful. The initiative lies with the customers, meaning they receive no unsolicited advertising (permission marketing).

Sales Process:

• The benefit to the customer takes precedence over the monetary benefit for the organisation.
• The organisation therefore sells products and services that benefit the customer. Products and services offered by competing organisations may also be recommended if the organisation’s own products and services do not meet the needs of the customer.
• The remuneration of employees is at the level of the living wage, and sales-dependent earnings do not incentivise unethical sales practices. Individual employees are not bound by internal targets or subjected to sales pressure.
• Care is taken to ensure that customer data is protected, meaning it is only used internally and is not passed on to other organisations unless this is necessary for service provision.
• Buy-now and pay-later options, if offered, are communicated with all consequences for customers, including a clear discussion of real interest rates and payment terms and conditions.

Customer service:

• Customers are offered pragmatic solutions, such as the straightforward exchange of products and reimbursement of the purchase price.
• Customers are not forced into buying the organisation’s products or services to increase the organisation’s market share. The freedom of customers to decide which product or service they buy, or re-buy, is not hampered by fraudulent misinterpretation.
• Existing customers benefit from the same advantages as new customers.

Start-ups and new organisations as a special case: Start-ups, new organisations and new products/services of established companies as a special case: more active forms of advertising are considered to be neutral for the evaluation if they are appropriate, informative, and factual.

This aspect covers the usability and user-friendliness of products or services, access to information, and the ease of reaching the point of sale or digital offerings. Physical, visual, technical, linguistic, cultural, intellectual, financial, and other barriers must be reduced as far as possible, and the distribution channels can also have an impact here.

Disadvantaged customer groups include people with mental, sensory, or physical special needs, older people, non-native speakers, people experiencing socio-economic deprivation, people from a minority ethnic or faith background, or minorities regarding gender or sexuality. NGOs, non-profit organisations, civil society projects and initiatives, non-commercial institutions from the fields of education, health, and social services, and micro-businesses can also be included in this category. B2B: The conditions and services available to small and medium-sized enterprises and regional organisations that are especially committed to the common good are equal to those available to bulk buyers.

The list of individual advertising activities below (in Levels of evaluation) describes practices that are difficult to reconcile with an ethical approach to customer relations.

The evaluation takes into account the overall impression of advertising activities, how extensively they are used by the organisation, and the extent to which customers are placed at a disadvantage.

Cooperation and solidarity with other organisations operating in the same sector means working together as equals in the spirit of openness, respect, and partnership. Competition is regarded as a healthy and honourable challenge with the emphasis on transparency and respect rather than hostile market share expansion. This attitude permeates the organisation’s culture. Aspect D2.1 focuses on cooperative attitudes towards other organisations aimed at improving the quality of products and services to better serve customers and develop industry standards for greater positive societal impact. Aspect D2.2 focuses on solidarity action between organisations aimed at mutual support in the case of need or as a collaborative business model, in general.

An ECOnGOOD organisation...

• sees other organisations operating in the same sector as a complement to the market.
• works with other organisations on solutions, products, and services that recognise and meet the needs of customers and target groups.
• offers other organisations support in emergency situations without expecting anything in return.
• develops and applies collaborative business models with other organisations.

Initial questions

• What is our understanding of a cooperative and caring attitude towards external organisations in general, and also towards other organisations operating in the same sector?

This aspect focuses on organisations working together and with industry unions or civil society organisations on products, services, and solutions to improve the quality of products and services to better serve customers and to improve industry standards for greater positive societal impact.

The evaluation considers whether there is cooperation with organisations with the same (regional) target group or with those operating in different sectors and regions and thus aiming at a different target group. Experienced and exemplary organisations cooperate with both organisations with the same and different target groups.

Cooperation can take place at various stages of the value chain: research and development, cooperative marketing, production resources and facilities, joint product and service offers, etc.

Knowledge and information can be passed on in different ways, depending on the organisation’s purpose. Examples are publications on the organisation’s website and in brochures or other literature, knowledge transfer via workshops or talks, the protection of intellectual property, and the licensing of use.

The focus of the evaluation should be the ultimate goal of cooperation: improving the quality of products and services and improving industry standards with regard to sustainability.

Cooperation can aim to raise industry standards through:

• External audits.
• Certifications (labels).
• Independent monitoring.
• Participation in initiatives within the industry and/or region (regular meetings of sector associations) to improve the range of sustainable products and services offered.
• Participation in collective action initiatives to minimise the risk of corruption.

Also, cooperation can happen through the initiation of or participation in good lobbying initiatives: ethical, transparent, and effective advocacy aimed at influencing public policy or decision-making in a way that aligns with public interest or a specific cause advocated by NGOs or civil society organisations.

This aspect focuses on solidarity and cooperation among organisations, from mutual help in difficult situations to collaborative business models. Mutual help in moments of need is not tied to compensation or reciprocal arrangements, but to enable self-help while allowing the organisation in need to retain responsibility and ownership, with the understanding that support is shared. Collaborative business models allow organisations to share resources, reduce costs, innovate faster, or expand markets.

Solidarity in difficult situations can take many different forms depending on the organisation’s purpose and the situation. These might include providing access to a network, facilitating introductions, sharing information and knowledge, offering individual solutions, donating money, or passing on job orders or labour force if legally possible.

If funds are offered to other organisations in the form of grants, they should also be accounted for in E2.1.

A collaborative business model is one where two or more independent organisations (often competitors or sector peers) formally or informally work together to achieve mutual benefits without merging or giving up their independence. Cooperative business models might include sharing information and knowledge, training, research and development investments, suppliers, production phases, machinery, space, and much more.

The organisation’s mindset demonstrates harmful behaviour towards other organisations. This is primarily expressed in the organisation’s desire to appear superior and in its attempts to disadvantage, obstruct, or cause a loss of market share for others. The goals and successes of other organisations are perceived as a threat. Success is achieved at the expense of other organisations, customers, users, or members (win-lose situations).

The organisation takes advantage of predatory pricing, (secret/covert) pricing agreements, and cartels to the detriment of peer organisations and, ultimately, customers.

Predatory pricing is the strategy of setting prices below cost (often below marginal cost or average variable cost) for a period of time, with the aim of driving competitors out of the market or deterring new entrants, in order to later recoup the losses by raising prices once a dominant position has been achieved or consolidated. It is a strategy concerning the level of the price and the competitive intent toward rivals. It is regulated under antitrust laws such as Article 102 TFEU in the EU or the Sherman Act in the US, and in order to be sanctionable it typically requires two elements to be proven: pricing below cost + the ability/intention of subsequent recoupment.

Secret price-fixing (covert collusion) refers to a clandestine agreement or coordinated arrangement between competing firms to fix, raise, maintain, or otherwise manipulate prices, made without the knowledge of customers, regulators, or the market at large. Unlike predatory pricing, which is a unilateral strategy aimed at rivals, secret price-fixing is a horizontal, multilateral practice: competitors who should be setting prices independently instead coordinate — directly or through intermediaries — to eliminate price competition among themselves and extract higher profits at the expense of consumers. Because such agreements are illegal under most antitrust regimes (e.g., Article 101 TFEU in the EU, Section 1 of the Sherman Act in the US), they are typically concealed through informal channels, coded communication, or third-party facilitators, which is why they are often uncovered only through leniency/whistleblower programs, raids, or forensic economic analysis (e.g., detecting abnormal price parallelism or sudden coordinated price jumps).

Given that organisations are unlikely to self-report anti-competitive conduct within their own assessment, the evidence base for this aspect should distinguish between externally established facts and externally sourced qualitative evidence, as follows:

A) Legally established breaches. Convictions, fines, or formal antitrust/competition authority rulings against the organisation in the reporting period. 50 points deducted per incident.

B) Credible external evidence of anti-competitive conduct not (yet) subject to legal conviction. Evidence drawn from sources external to the organisation's own self-reporting — such as media investigations, whistleblower reports, regulatory inquiries not yet concluded, complaints by competitors or industry bodies, or publicly available market data — indicating predatory pricing, undisclosed price-fixing, cartel behaviour, discrediting of competitors, or market-share maximisation pursued as a strategic objective at the expense of others. 50 points deducted per sub-aspect.

C) Defensive patenting without use or development Evidence that numerous patents have been obtained for the organisation's own product ideas without further pursuit or use, where this conduct has the potential and intention to limit other organisations' capacity for development, research, and innovation.Up to 50 points deducted.

Note: Points deducted under category A and B are not cumulative for the same underlying conduct — a legally established breach (A) should not also be scored under B for the same incident. A total of up to 200 points may be deducted across categories A, B, and C combined.

The use and end-of-life treatment of products and services often have negative impacts on the environment. These impacts should be reduced as far as possible. Environmental impacts created by customers or consumers (energy consumption, emissions, etc.) during use, and end-of-life treatment of products and services are considered in this theme. The design phase of products and services is fundamental to reduce or eradicate environmental impacts related to usage and end-of-life treatment. The classification of environmental impacts into fixed and variable impacts serves to distinguish whether the impacts are reported and assessed in D3 or E3. Variable impacts that are only incurred when customers use the product or service are to be reported in D3. Fixed impacts that are incurred even if the product or service is not actively used are reported under E3. Thus, the production phase is reported in E3. Examples are provided in the aspects. Scope 3 downstream emissions are considered here, meaning emissions caused by the use of the product or service.

An ECOnGOOD organisation...

• provides comprehensive information about the environmental life cycle of its products and services, including during use and end-of-life phases.
• aims to minimise negative environmental impacts to the greatest possible extent.
• offers products and services with fewer negative environmental impacts during use and end-of-life treatment than existing alternatives.
• seeks to exert a moderating influence on customers working towards sufficiency.
• uses business models that focus on product and service (re-)design to minimise or completely avoid negative environmental impacts, also known as Product Lifecycle Management.

Initial questions

• What environmental impacts result from the use and end-of-life treatment of our products and services?
• How do our customers use and discard our products and services (purpose, frequency, duration, manner)?
• What comparable alternatives to our products and services exist, and what are their environmental impacts?
• How is our business model assessed when reflecting on the environmental impact of our products and services?
• How can we improve the design of our products and services to reduce or eradicate negative environmental impacts during use and end-of-life phases?

The use of products and services should be as eco-efficient and circular as possible. The term circularity describes a product or service that imitates natural systems. In nature, energy and nutrients circulate, being continuously transformed: the waste of one organism becomes the nourishment of another. Circularity, when applied to products, considers the end of a product’s life as a resource for another product or application, thus reducing environmental impact. Eco-efficiency refers to the economic value added per unit of a product in relation to its environmental impact. GHG Protocol Scope 3 emissions downstream should be considered in this aspect if the organisation operates in a significant emission-intensive industry (see Guidelines for indicators and evaluation).

• The lack of a description of the life cycle leads to a devaluation by one scale point (see Introduction Chapter 3.3).
• Indicators marked with “*” can be obtained in detail by a Life Cycle Assessment (LCA) of the product or service. This assessment can be resource-intensive, and not all organisations may be able to carry this out. Considerations about the relevance of an LCA for decision-making and improvement of the business strategy should be made. A LCA is highly recommended, especially for products or services where a high environmental impact is estimated or recorded by alternative comparisons. Impacts considered are water consumption, carbon emissions, energy intensity, toxic substances, and severe impacts on biodiversity. See also the Introduction Chapter 3.3 on “life cycle perspective”.
• When reporting on the ECOnGOOD relevant VS indicator "The undertaking shall disclose whether it applies circular economy principles and, if so, how it applies these principles", please, also describe application of circular economy principles to the business model.
• Appropriate measures include the use of eco-design criteria or similar standards when designing and developing products and services.
• Information can be in absolute values or relative comparisons with similar products and services (environmental accounting, life cycle assessments, etc.) or, where appropriate, estimates or conclusions from scientific studies.
• Services also have a life cycle. A LCA for services, as well as products, is tackled in ISO 14044 “Environmental management — Life cycle assessment — Requirements and guidelines”, though ISO 14001 can also offer a basic approach for this.
• Offsetting/compensation is positively assessed only if it comes after due emission avoidance and reduction strategies. Any high-quality science-based offsetting/compensation typology can be considered: emission reduction projects (renewable energy, energy efficiency, etc.), carbon removal projects (afforestation, reforestation, sustainable forest management, regenerative agriculture, biochar, etc.) , offsets with social co-benefit (clean energy access, public health, local economic development, etc.). In order to be considered of quality, a project should include the following criteria: i) additionality (the emission reductions or removals should not have occured without offset funding); ii) measurability (the amount of CO₂ reduced or removed must be quantifiable using reliable methods); iii) verifiability (the results must be independently verified by a third-party auditor or certification body); iv) permanence (the carbon removal must be long-lasting — the CO₂ should not return to the atmosphere in the future).
• Environmental impacts are categorised as either fixed or variable, and reported and evaluated in D3 or in E3. Variable impacts that are only incurred when customers use the product or service are to be reported here in D3. Fixed impacts that are incurred even if the product or service is not actively used are reported under E3. For example:
  • In the case of a taxi company, impacts incurred as a result of “dead” mileage between fares, running an office, etc. would be reported under E3 and the impacts incurred as a result of trips carrying passengers under D3.
  • A massage therapist would report impacts resulting from the use of a room, heating, etc. under E3, and massage oil and journeys made by customers to the place under D3.
  • A business consultant would report impacts resulting from office maintenance under E3 and impacts resulting from travel to consultancy appointments under D3.
• For providers of non-material services, impacts relating to the content of their services and the actions resulting from them play an indirect role in addition to the environmental impacts directly associated with their activities. For instance, an architect might recommend using organic insulation materials, or a business consultant might advise a company on switching to renewable energy. Impacts of this kind are reported under E1.
• In the end-of-life phase:
  • Downcycled means that the product or packaging’s components or materials lose value when reused or recycled.
  • Up-cycled means that the product or packaging’s components or materials acquire value when reused or recycled.
  • Recycled means that the product or packaging’s components or materials keep the same value when reused or recycled.
• In accordance with VS, depending on the type of activities carried out by the organisation, disclosing a quantification of its Scope 3 GHG emissions can be appropriate to yield relevant information on the organisation’s value chain impacts on climate change. Organisations operating with manufacturing, agrifood, real estate construction and packaging processes are likely to have significant Scope 3 categories, which may be considered relevant for reporting in the organisation’s sector.

In addition to designing individual products and services more efficiently, it is essential to promote moderate overall use. Ultimately, this is the only effective way to reduce environmental impact at a societal level. Reducing consumption requires organisations to rethink their activities more profoundly than just improving eco-efficiency and circularity. Reducing consumption runs contrary to the prevailing growth paradigm. At the same time, customers should be enabled to make responsible decisions about what proportion of their theoretical personal budget of environmental impacts they wish to invest in a product or service. Sufficiency can be included in business models using concepts like reduction, abstention, substitution, resizing, sharing, dematerialising, multi-purposing, Everything-as-a-Service (XaaS), or other ways to reduce resource and energy consumption.

• Moderate consumption: In theory, each individual has a certain budget of environmental impact out of overall human consumption that can be incurred over a lifetime whilst remaining within planetary boundaries. Consumption or overall use can be considered moderate if these limits are not exceeded. Moderate consumption can be fostered directly through the organisation’s products and services and through the promotion of key concepts such as recyclability, reusability, durability, and repairability.
• Potential measures include:
  • Price advantages and incentive schemes to encourage repair, reuse, and shared use.
  • Extended warranty and an inexpensive repair service.
  • Development of products and services that promote the principles of sufficiency, such as car sharing, cradle to cradle, products made using easily separable materials, or materials with reduced environmental impact.
  • Information on more environmentally friendly alternatives (including competitors’ products and services) and incentives to buy these products, information on the environmental impact of all products and services, measures to raise awareness about moderate use among customers, and communication via telephone or electronic means rather than travelling to meetings.
• Sufficiency-oriented business models take into account the principles of exchange, sharing and repairing (during use) and recycling, reuse, and reprocessing (in the end of life phase), and promote the four D’s of sufficiency: de-cluttering, deceleration, disentanglement, and de-commercialisation.
• Products promote sufficiency if they are durable, easy to repair, timeless in design, and recyclable (e.g. cradle to cradle), or at least produced with environmentally sound end-of-life treatment (e.g. using materials that can be separated easily).
• A sufficiency-oriented approach to customer communications is one that seeks to raise awareness among customers and consumers on the issue of moderate use and to motivate them to limit their consumption. Notes on communication:
  • Misleading forms of communication, such as greenwashing, are examined more closely under negative aspect D1.3 Negative advertising.
  • Basic background information on environmental impacts might include short briefings on individual topics (greenhouse gas emissions, water consumption, etc.) with the primary aim of raising awareness and educating customers.
  • Informing customers as a standard procedure means that each item of customer communication always includes relevant information on environmental impacts.
  • Clear and comprehensive information includes background information on interconnected environmental impacts, ideas, and tips on moderate use and sufficiency, etc.
  • Sufficiency-oriented customer relation strategies could, for example, mean actively informing customers of more environmentally friendly alternatives (including those provided by competitors).
  • If information on environmental impacts is used only to increase overall consumption and use, this counteracts sustainability because it results in a net increase of environmental impacts. For this reason, communication regarding environmental impacts should also promote the concept of sufficiency.
• Applying sufficiency is also fundamental to avoid rebound effects, which happen when increased eco-efficiency leads to increased overall consumption of that resource, partially or completely offsetting the expected environmental savings.

This aspect evaluates disproportionately negative environmental impacts during the use and end-of-life treatment of products and services. Such impacts contribute collectively to the transgression of planetary boundaries. Products and services that, by design or as a part of the organisation’s business strategy, actively contribute to collective overconsumption are evaluated here.

• Products and services are considered to have disproportionate impacts when the combination of environmental impacts per use and current usage patterns, extrapolated to the entire human population, results in exceeding a planetary boundary.
• Products and services counteract principles of sufficiency, eco-efficiency, and circularity if they purposefully employ or support:
  • Planned obsolescence (technical, psychological obsolescence, etc.).
  • Rapidly changing fashion trends.
  • Rapid development of new product models in combination with planned psychological obsolescence, e.g. in the case of smartphones.
  • Active cultivation or activation of needs, e.g. long-haul flights in the case of travel agencies.
  • Misleading communications (e.g. greenwashing; see negative aspect D1.3 for a more detailed explanation).
  • Products that stimulate sales of supplementary products to ease or ensure functioning.

Practices generating unduly stimulated overconsumption might be: i) buy one, get one free; ii) limited-time offers or flash offers; iii) bulk discounts or multi-buy deals (e.g. “Buy 3 for 10€” instead of “3.50€ each”).

Customer participation and feedback provide useful input on potential socio-environmental and sustainable product improvements, product and service innovations, and the development of demands and the market. Customers can share their experiences directly with the organisation or communicate with each other. Organisations with active customer participation policies and transparent product information help leverage the common good. Transparent information on the material composition of products, price components, and how customers can participate allows consumers to make informed decisions. In D4, the organisation reports on the level of transparency about products and services towards customers. Not to be confused with the environmental impacts reported in D3, the solidarity and social justice reported in D2, and the contribution to human dignity reported in D1.

An ECOnGOOD organisation...

• encourages direct contact with its customers and involves them in product development.
• uses dialogue with customers to make products and services more sustainable and customise their products to the consumer’s needs.
• enables customers to participate in product design and improvement through comprehensive product transparency, including throughout the supply chain.

Initial questions

• What methods for co-determination and shared decision-making does the organisation offer our customers?
• How does the organisation involve customers in product development and market research?
• How transparent is the material composition of the products, including any potentially harmful substances they may contain?
• How does the organisation communicate its pricing strategy?

Customer involvement gives people a voice and requires honest communication up to the leadership level. A participatory approach in product and service development and in market research allows customers to contribute their ideas and needs, helping to improve existing products, develop new ones, or enhance their accessibility. Market research support product optimisation according to customer needs and strengthens, enabling customers to make informed choices in their own interest.

The focus is not on complaint management. Rather, the organisation understands that customers are the experts in using their products and services and are, hence, an important source of knowledge and innovation. Customer participation involves establishing clearly defined communication strategies and providing the opportunity to communicate with employees with dedicated roles that welcome feedback, suggestions, and criticisms from customers. Practical examples include:

• Passive and active customer relations management and market research.
• Hotline, email, or social media accessibility of customer relations personnel.
• Dedicated contact person(s) in the organisation for suggestions, innovation ideas, and improvements by customers.
• Standardised processes for feedback: input screening, categorisation, transfer to relevant people/roles, and response to customers on feedback handling.
• Market research on consumer preferences and acceptance of different participation formats (polls, questionnaires, events, the hiring of market research agencies, etc.).

A participatory approach to product development takes customer ideas and suggestions into account. Sustainability-oriented customer groups and stakeholder groups can be informed and engaged to assist with the development and dissemination of sustainable product innovations. Market research is considered exemplary if it also explores opportunities for improving the quality of products and services from an environmental and social perspective, e.g. longevity or reusability. Arnstein’s ladder of citizen participation can be adapted for customer participation:

1. Manipulation: Customers are used to support decisions made by organisations without any genuine influence.
2. Therapy: Participation is superficial, aimed at pacifying customers rather than empowering them.
3. Informing: Customers are informed about decisions but have no influence on the outcomes.
4. Consultation: Organisations seek customer feedback, but it does not guarantee any change in decisions.
5. Placation: Customers are given some influence, but it is limited and often tokenistic.
6. Partnership: Customers and organisations share decision-making power, collaborating on solutions.
7. Delegated Power: Customers have significant control over decision-making processes.
8. Citizen Control: Customers have full control and authority over decisions affecting their lives.

Transparency in products and services allows customers to evaluate their environmental, social, and health impacts on humans and animals, as well as the sustainability of the value chain. Transparency supports fair pricing and enables open discussion with partners in the value chain, including the wider public. Organisations view their customers as business partners who have a right to know whom and what they support with their purchasing decisions.

In D4, the organisation reports how transparently it shares the information of its socio-economic impacts with customers. The impacts of the organisation’s products and services are evaluated in D3. If a Life Cycle Analysis is carried out by the organisation, detailed information will be available.

When answering questions about what information is provided concerning the material composition, environmental characteristics, and health impacts of products and/or services, a possible answer could be: “We disclose the whole material composition for 50% of our products. The composition is disclosed directly on the product. We have an EPD for our 3 best seller products which is published on our website.” An organisation should not answer, “Our products are made of hemp and cotton. Our product is water-intensive and one unit produces 300 kg of CO₂ in its life cycle.” This second answer is something that could go in D3.

For products, relevant information can include:

• The ingredients, materials, components, and energy intensity.
• Information about the origin of materials and environmental impacts in countries of origin.
• Information about the process steps and associated impacts (CO₂ emissions, water footprint, toxins, etc.)
• Information about international value chains and risks for users/customers and the environment (mining, shipping, storage, logistics, pre-processing, intermediate products, etc.).

For services, relevant information can include:

• Purchased or leased products and materials necessary to perform the service.
• Energy intensity of the service and associated socio-environmental impacts.
• Digital resources used to perform the service (e.g. server capacity, electricity consumption).
• Direct and indirect impacts of mobility to perform the service.
• Direct and indirect impacts of service delivery location.

Information can be shared and disclosed in different ways:

• Digital Product Passport
• Service and product information attached to the product (e.g. manuals, information written on packaging, information on the product itself, labels, Nutri-Score, etc.).
• Service and product information attached to the organisation (e.g. website, online shop, product presentation, etc.)
• As regular client/customer information if the product’s socio-environmental impacts change.
• With product updates, regular maintenance, and legally mandatory inspections.

Information on the pricing strategy can be disclosed in different ways:

• To avoid competitive disadvantages, B2B disclosure is not mandatory.
• End-consumers should be delivered information, for example.
• Accompanying the invoice.
• Accompanying the purchase contract of the product or service.
• As part of the terms and conditions of service.
• With offers to prolong or renew subscriptions and acquisitions of new customers.

Externalised costs or impacts are not paid by the organisation but are incurred externally and impose a burden on the community or on nature. It can be difficult to estimate externalised costs. The transparency policy of the organisation should enable customers to understand what impact the products and services have, how the organisation handles these impacts (e.g. CO₂ compensation), and how this is reflected in the price of the products and services.

Products may contain substances that damage the health of consumers or harm the environment, even when used as intended. Both the substances themselves and the side effects of their use carry risks that consumers must be informed about.

Hazard pictograms and safety labelling for hazardous substances are standardised ways to declare this information, often required by law. Information on maximum doses and exposure periods should also be transparently communicated by the organisation. The consequences of the improper use, transportation, storage, or disposal of products and services for human and animal health should be clearly communicated in the information provided. For service providers, e.g. cleaning services, chemical treatment of materials, the content of substances used, and their environmental impacts should be declared to customers.

The ultimate purpose of an ECOnGOOD organisation is to produce and offer products and services that contribute to the common good, meeting genuine human needs in a way that is socially responsible and environmentally sustainable. This purpose is addressed at three distinct levels in the handbook: i) Purpose: Why the organisation exists, and whether it actually lives that reason in practice. This is a narrative, cross-cutting reflection using self-defined qualitative indicators to track, over time, whether the organisation's strategy and actions remain consistent with its declared purpose across all matrix themes (internal processes, stakeholder relationships, and products/services). ii) E1.1 addresses whether the organisation's products and services satisfy fundamental human needs, directly or indirectly. Not every product or service exists to meet a real human need: some primarily create artificial demand, planned obsolescence, or convenience without addressing anything essential to a healthy life. E1.1 asks organisations to test the basic legitimacy of what they offer against this standard. iii) E1.2 measures how much real, measurable positive change the organisation actually generates in response to major "glocal" (global and local) challenges, such as the Sustainable Development Goals (SDGs). Unlike the introductory Purpose section, which reflects narratively on intentions across the whole organisation and matrix themes, E1.2 is limited to products, services, and core business activities, and requires evidence of actual outcomes and not stated aspirations.

An ECOnGOOD organisation...

• offers products and services that contribute to a good life for all, and that satisfy the fundamental human needs of as many people as possible.
• promotes human and community health and development with its products and services.
• avoids products and services that carry socioenvironmental risks.

Initial questions

• How do our products and services satisfy fundamental human needs, support human development, strengthen our communities, or contribute to healthier ecosystems?
• What are the societal impacts of the production and use of our products and services?
• How can our effectiveness at bringing positive change for people, communities, and ecosystems be demonstrated?

Products and services can either be made to satisfy fundamental human needs or be short-lived luxury items thought to inhibit needs or pretend to satisfy them while consuming scarce resources. Overconsumption strains the planet’s resources, harms human physical and mental health, and erodes social capital. Offered products and services should efficiently meet fundamental human needs and support conscious consumer decisions. Products and services that are designed to reinforce social status distinctions, exploit economic insecurity, or exclude people based on economic means — rather than to meet a specific and legitimate need of a group — can harm social cohesion. Business-to-business (B2B) organisations should reflect and report on the sectors they directly and indirectly support through their products and services.

For non-profit organisations that don't sell products and services, indicators based on sales revenue are not applicable. In this case, it is sufficient to qualitatively describe activities/projects by category and their contribution to fundamental human needs, etc., without using the quantitative indicator based on sales.

When evaluating the organisation’s products and services, a classification is helpful. Products that satisfy the fundamental human needs for a simple and good life are preferable to products that are dispensable luxuries. Fundamental human needs are individual, but generally, the following can be considered fundamental human needs (Max-Neef and Rosenberg):

1. Subsistence: e.g. health, wellbeing, nutrition.
2. Protection: e.g. safety, defence, support.
3. Affection: e.g. love, social adherence.
4. Understanding: e.g. empathy, exchange, communication.
5. Participation: e.g. comfort, co-determination, personal impact.
6. Leisure: e.g. recreation.
7. Creation: e.g. genuinely making, producing, designing, contributing.
8. Identity: e.g. self-reflection, distinction.
9. Freedom: e.g. autonomy, decision-making competence, independence, the capacity for regulatory or self-determined action.

• The type of benefit provided to the customer should also be evaluated. Products and services with multiple benefits are rated highest, followed by those that provide a singular benefit, those that provide an inhibiting benefit, and lastly, those that provide a pseudo benefit. Negative benefits are reported within the negative aspect E1.3.

  • Multiple benefits: Products or services serve several human needs simultaneously.
  • Singular benefit: Products or services serve a single benefit, e.g. a sports event may only have the benefit of being a leisure activity.
  • Inhibiting benefits: Products or services serve one benefit at the expense of another. For example, TV shows satisfy the need for recreation, but can inhibit creativity and inventiveness.
  • Pseudo benefits: Products or services do not really address a need, but merely alleviate it or provide a substitute. If only symptoms are relieved, without a real contribution to meeting human needs, the product or service creates a pseudo benefit that is not satisfactory and not sustainable.
  • Negative benefit: Products or services causing more social costs than private benefit, creating a negative net benefit. For example, nuclear power stations, weapons, gambling machines, or violent video games.

• Business-to-business (B2B): organisations that sell or provide products and services to other organisations as their customers. The question the organisation should pose is “do my products or services contribute to the making of unethical products or services from my customer's side?”

• Unethical supply chains or products and services of client organisations are the ones listed in E1.3, guidance to indicators and evaluation.

• For B2B, in E1.1, the contribution to the downstream value chain is considered, while considerations concerning the upstream value chain (suppliers) are considered in A row themes.

Beyond the benefits to their customers, the products, services and activities of ECOnGOOD organisations can offer solutions to local and global challenges, such as the Sustainable Development Goals, whether intentionally or unintentionally, which might, therefore, be beneficial to wider groups of people. In this aspect, organisations are invited to reflect and report on the tangible and intangible societal impacts of their products, services, and core activities (see "Guidelines for indicators and evaluation" below for guidance on defining relevant output, outcome, and impact indicators).

Aspect E1.2 only assesses the impact of business activities. Voluntary contributions (in kind, time, money, network, etc.) are analysed and assessed in aspect E2.1.

If a non-profit organisation does not sell any products or services, indicators based on sales revenue are not applicable. In this case, it is sufficient to qualitatively describe activities/projects by category and their contribution to SDGs, etc., without using the quantitative indicator based on sales.

Local, regional, or global problems can be related to the 17 Sustainable Development Goals (SDGs) or to other challenges. The societal impact of products, services, and core business activities in general encompasses both customers and other individuals who are reached but not directly connected to the organisation, such as local residents, and communities, or national and international NGOs.

Societal impact of the core business activity, products, and services, might be related to:

• A change in the attitudes, behaviours, or paradigms of a certain target group (i.e. repairing instead of buying new, recycling instead of throwing away, buying directly from farmers instead of from supermarkets etc.).
• Extended and deepened knowledge about specific issues to make good and informed choices/
• An improvement in the life of customers and/or of their communities of reference. For example, if, thanks to a product/service offered by the organisation, the autonomy of a disabled person increases, the care-giver indirectly gains some relief, and social costs due to depression and stress decrease.

Measures and actions to improve the organisation’s societal impact through its core activities might include:

• Innovative ways to be more informative about core business-related issues and impacts through smart packaging, conferences, webinars, workshops, collaborations with civil society initiatives, etc.
• A re-design of some products, services, or the business model.
• New products and services.

Output, outcome, and impact indicators exist:

• Output indicators demonstrate that an activity has been completed (e.g. 10 people participated in a workshop on the benefits of organic farming).
• Outcome indicators demonstrate that change has occurred (e.g. 10 people started to buy organic instead of conventional food).
• Impact indicators demonstrate that change occurred due to the measures taken by the organisation (e.g. 10 people started to buy organic food thanks to taking part in a workshop). Sometimes impact is difficult to measure, because change often occurs due to many reasons and is rarely monocausal. However, it is often possible to show that the organisation also contributed to the change (e.g. 5 people report in a survey that the workshop on organic farming led them to try out organic products). Both outcome and impact indicators can be good indicators to demonstrate that change occurred, while output indicators are often insufficient to measure underlying the causes and effects of changed behaviours.

Examples of verification indicators:

• Number of people reached, for example, readers or visitors.
• Self-set outcome or impact indicator, for example, number of people who changed behaviour/attitude or improved their knowledge of a certain topic, or which life conditions concerning wellbeing have improved.

Products and services are considered unethical if they negatively affect the lives and health of living beings – physically or mentally – or if they harm human freedom, social cohesion, the global community, or ecosystems.

The following products and services are considered to be unethical:

• Products and services for the military, especially weapons of mass destruction and weapons that have been prohibited under international law, such as CBRN weapons (chemical, biological, radiological, and nuclear), cluster munitions, and anti-personnel mines.
  • Exception: weapons with 90% or more use by official security forces (e.g. police) or for licensed hunting.
• The construction or operation of nuclear power stations, nuclear reprocessing plants, nuclear waste disposal, the incineration of radioactive material, or uranium mining.
  • Exception: dismantling phased out nuclear power stations, products for safe treatment, recycling, and re-use, or risk alleviating technologies for nuclear waste.
• Manufacture and use of genetically modified plants and seeds, and release of genetically modified organisms (animals and plants).
• Manufacture of chlorine, organochlorine compounds, or chlorine-containing products, especially in the plastics industry.
• Manufacture and distribution of ozone-depleting chemicals.
• Manufacture of agrochemicals (pesticides, fungicides, and herbicides).
• Manufacture of products causing addiction (alcohol, drugs, tobacco, and tobacco products).
  • Exception: wine, beer, and alcohol products for ‘social drinking’, and drugs for medical purposes.
• The production and distribution of pornographic products and violent computer games.
• Products that have been tested on animals.
  • Exception: legal requirements (e.g. medical drugs, cosmetics, or detergents).
• Products and services related to gambling for betting and the manufacture or distribution of gambling devices.
• Research on developed human genetic cells (embryonic state).
• Raw material production with long-lasting or harmful environmental impact, e.g. shale gas and oil sand extraction.
• Participation in the fossil fuel (coal, oil, and gas) sector (exploration, mining, extraction, production, processing, storage, refining, or distributing, including transportation, storage, and trade, of fossil fuels).
• Installation or operation of plants that emit toxins or electro-magnetic radiation (electrosmog) e.g. mobile phone masts on residential buildings with a magnetic field greater than 0.4 microtesla.
• As defined by Article 12.1 and 12.2 of the Commission Delegated Regulation (EU) 2020/1818, some types of companies are excluded from EU Paris-aligned Benchmarks: (a) companies that derive 1% or more of their revenue from the exploration, mining, extraction, distribution, or refining of hard coal and lignite; (b) companies that derive 10% or more of their revenue from the exploration, extraction, distribution, or refining of oil fuels; (c) companies that derive 50% or more of their revenue from the exploration, extraction, manufacturing, or distribution of gaseous fuels; and (d) companies that derive 50% or more of their revenue from electricity generation with a GHG intensity of more than 100g CO₂e/kWh.
• Conventional production and trade of animal products.
  • Exception: animal products from animals farmed at animal welfare standards of the EU organic regulations.

The following behaviours are considered unethical:

• Failure to deal with human rights violations.
• Use of child labour.
• Animal suffering and abuse (e.g. livestock transportation, medical experiments where more humane technological alternatives are available “in silico”).
• Air transport of passengers or cargo representing more than 10% of revenue, except for emergency and rescue purposes.
• Media, in which more than 75% of content is either non-educational, culturally insensitive, or violent entertainment.

The state, civil society institutions, and society in general provide essential foundations for entrepreneurial activities. Every organisation benefits from the community: individually through subsidies and funding, but also as a part of the larger society through municipal services, social security, employee education, health, and infrastructure. Taxes and social contributions are meant to finance these services. In addition to taxes and statutory contributions, organisations can support community development through voluntary contributions as well as undermine it through tax evasion and avoidance or corruption.

E2.1 aspect mainly applies to for-profit organisations and it is not applicable to and can be skipped by non-profit ones. However, non-profit organisations can take the opportunity to reflect on their relationship with their local community. In fact, for non-profit organisations, gifts are the practical measure of a genuine bond with the community. If reciprocity is absent, the organisation lacks a deep relationship with its community, which leads to a high risk of being replaced and a less committed community in terms of donations and volunteers.

An ECOnGOOD organisation...

• contributes to society and its institutions by paying its taxes and making social contributions in accordance with its wealth.
• uses subsidies and/or public money or public funding correctly, consciously, and efficiently, and only for projects or activities that satisfy fundamental human needs, strengthen communities, or regenerate ecosystems.
• 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 these contacts and financial flows.
• puts measures in place to prevent corruption, tax evasion, and tax avoidance both internally and in its operations with direct business partners.

Initial questions

• How do we strike a fair balance between what we do for society and its institutions, and what we gain by doing so?
• How socially engaged are we? What is the aim of such activities?
• To what extent are these activities motivated by self-interest? Does this involvement provide us with additional benefits, whether deliberately planned or otherwise?
• What are the effects of our activities? What social impact do we have (individually and structurally)?
• How do we ensure that our activities prevent - or, at the least, do not facilitate – corruption, tax evasion, and tax avoidance?

Many organisations make voluntary contributions that go beyond their statutory duties, donating resources such as money, physical goods, or time, or by using their position and contacts to support civil society initiatives and benefit society as a whole (‘positive lobbying’).

Charitable works can be quantified in monetary terms: the hourly rate that the person who is made available for the voluntary project would receive in the organisation for their operational tasks should be used. This is to be documented in the list of all activities and their monetary value. Similarly, in the case of in-kind donations, the monetary value of the item(s) should be used. Evaluation is based on the organisation’s overall performance. Charitable works might be limited in some types of organisation, especially in the non-profit sector, which should be taken into account when making the evaluation. Specific individual measures are less effective than long-term commitments. Assuming responsibility for specific activities is evaluated at a higher level than one-off donations. The diversity of measures taken, and the extent to which they address the cause of any problems, is also relevant. For instance, An organisation regularly donating meals to a shelter for homeless people relieves a symptom (hunger in the short term) but does not address the underlying causes of homelessness; by contrast, an organisation funding a vocational training and job-reintegration program for homeless people creates lasting change, because it addresses root causes (lack of skills/employment) and builds long-term self-sufficiency.

Tax evasion and avoidance refer to illegal practices, as well as legal but aggressive practices, through which an organisation fails to return an appropriate share of the value it creates to the common good via taxes and social security contributions. Large international organisations can exploit differences in national tax systems in various ways to minimise their tax burden. As a result, their actual tax contributions may be significantly lower than those of small and medium-sized organisations operating in the same countries. This negative aspect, therefore, primarily applies to large international organisations or those operating as part of a multinational group. Risks also arise from international online trade and the digital economy. In any case, even small organisations should analyse their tax evasion risks, especially those related to the practice of undeclared payments. Ordinary tax compliance activities — such as applying tax reliefs and deductions as intended by law, or receiving general tax consultancy — are not considered aggressive avoidance and therefore fall outside the scope of this aspect.

Social security contributions, as defined by the OECD, are compulsory payments paid to the general government that confer entitlement to receive a (contingent) future social benefit. They include: unemployment insurance benefits and supplements, accident, injury, and sickness benefits, old-age, disability, and survivors’ pensions, family allowances, reimbursements for medical and hospital expenses, or provision of hospital or medical services. Contributions may be levied on both employees and employers. Such payments are usually earmarked to finance social benefits and are often paid to those institutions of general government that provide such benefits. Total taxes paid are mandatory payments in the organisation’s country, e.g. corporate and capital income taxes, taxes on labour income, taxes on consumption, etc.

The evaluation should focus on the risk potential of each organisation. Small and medium-sized businesses whose operations are largely regional have little potential for tax evasion and avoidance except for offering payments in black to their clients. The larger an organisation is, and the more it operates internationally, the greater the risk. The requirements for transparency, therefore, increase as the risk does. Should there be significant potential for such practices, then it is the organisation’s duty to be transparent in proving that it has not taken part in any aggressive tax avoidance schemes. In the case of doubt, an estimation is acceptable to determine any loss of points.

Corruption encompasses all practices, in both public institutions and private organisations, in which entrusted power or position is abused for private gain. This includes, for example, public officials favouring a party in exchange for personal benefits, as well as private-sector employees circumventing internal tendering procedures for personal enrichment, or suppliers offering personal benefits to purchasers to secure preferential treatment. This not only covers bribery and fraudulent behaviour by public officials, but also non-transparent lobbying, nepotism (favouritism), the embezzlement of common assets (e.g. the unlawful allocation of subsidies or circumvention of procurement obligations), and illegal financing of political parties or election campaigns. Corruption is usually linked to undue material or immaterial benefits for office holders. Organisations are expected to implement measures within their sphere of influence that prevent, detect, and combat corruption.

Every organisation should identify potential corruption risks. How comprehensive measures need to be depends on the risk entailed. The range of negative evaluations can be adjusted to sections of each aspect. Transparency rules apply to both business activities and personal actions:

• Accepting gifts.
• Accepting paid work (e.g., as a consultant or employee) with a supplier, client, or competitor just after leaving a position of responsibility within the organisation.
• Disclosure of all financial interests and assets that can lead to a conflict of interest in any undertaking.
• Sideline activities.

Typical measures to prevent corruption include:

• Rotation.
• The multi-person oversight principle.
• The principle of separating duties between the authorising officer and the accounting officer.
• Reporting requirements for irregularities.
• Transparent access to critical documents.
• Inclusion in the stakeholder register (Lobbying Register).

Organisations cause environmental impacts through their activities. By carefully analysing their own actions and their real costs to society, importantly including what is dismissed in the economy as ‘externalities’, they can make substantial contributions to reducing environmental impacts. This includes actions like adapting processes with the aim of avoiding the transgression of planetary boundaries. Besides working on reduction of impact, the organisations should also consider how to actively regenerate the environment.

An ECOnGOOD organisation...

• knows and actively manages the environmental impact related to the life cycle of its products and services.
• actively addresses the environmental impact of its core activities.
• continuously reduces any negative environmental impact, and designs its procedures and processes to be resource-efficient, frugal, and low in harmful substances.

Initial questions

• How do we recognise, analyse, and avoid harmful environmental impacts?
• What comparisons can be made with the environmental impacts of the manufacturing processes of companies in the same industry or region, and what conclusions can we draw from this?
• As part of its business model, how can the organisation participate in regenerating the ecosystems?

In the spirit of a responsible economy, every organisation is encouraged to reduce its ecological impact. The goal is to minimise resource consumption and emissions and reduce the use of hazardous substances, technologies, and processes. An established environmental management system can help define strategies and responsibilities as well as elaborate a transition plan to prioritise and implement measures, and evaluate their effectiveness.

• High climate impact sectors are the ones listed in NACE Sections A to H and Section L as defined in Annex I to Regulation (EC) No. 1893/2006.
• For guidance on the VS indicators, please refer to the European Union page.
• There are many tools available for determining an ecological footprint. It is recommended to a single method/tool to ensure comparability over time.
• Whenever possible, please report all indicators as T.T.

It may be helpful to draw comparisons with other companies in the sector or region when identifying ways to reduce the environmental impact of core activities. The basis for evaluating the relative environmental impact is best practice or current industry-wide standards. Such comparisons may not be easily available, but they are a powerful and effective tool to reduce impact. Assessing relative impact could be the basis for local cooperation with other organisations and the public sector to benchmark best practices and to evaluate innovation. Common good-oriented companies should seek and initiate cooperation with partners with the aim of collectively improving and reducing impact.

For smaller organisations without significant production processes, the need for comparative information to make an evaluation of the relative impact is lower.

If an organisation’s activities have disproportionate impacts on ecosystems or violate environmental regulations, they create ecological and social harm without offering corresponding benefits. Such activities are particularly problematic when they would not be permitted under environmental laws at other organisational sites.

A risk and impact assessment of potential damage caused by a breach of environmental regulations should be estimated and put in relation to the organisation’s total value (or annual revenue). The greater the hazard potential, the higher the point deduction. Personal injuries are always rated as major impacts. Local complaints may be published, e.g. through newspaper reports or submissions to the municipality.

Transparency and co-determination values are the foundation of an enlightened, democratic, open, and pluralistic society and are intended to promote a life-enhancing coexistence. The implementation of these values should primarily avert harm to the public and avoid decisions being made based on limited information and facts, inadequate exchange of arguments, or restricted participation of affected stakeholders. Stakeholders can vary greatly and may include local residents and authorities, committed non-profit organisations, future generations, as well as nature, including animals, plants, biodiversity, and landscapes. It is worth noting that democratic participation requires education and also engagement in finding solutions that go much beyond just opposing decisions to facilitate constructive exploration of feasible alternatives.

An ECOnGOOD organisation...

• is transparent about its actions and shares information of legitimate interest to the public.
• promotes democratic education and its application, and excludes discrimination and racism in their governance.
• recognises the potential dangers and risks of digitalisation and artificial intelligence.
• transparently shares information about corporate actions and responds to individual information requests and objections.
• takes into account legitimate interests and actively seeks dialogue with societal stakeholders, including those who represent the interests of stakeholder groups who cannot raise objections themselves (such as disadvantaged people in other countries and continents, children and adolescents, future generations, animals, and nature).
• engages in initiatives to foster the co-determination of impacted people, both locally, regarding the organisation’s direct impacts, and internationally, regarding indirectly impacted stakeholders.

Initial questions

• Which stakeholder (besides the ones discussed already) can be impacted by your organisations’s decisions and actions?
• How does the organisation develop and present their attitude towards transparency and co-determination?
• How transparent, honest, complete, unambiguous, and factual is the information policy for risk assessments and potential harmful effects on global society and the environment?
• How are the effects of entrepreneurial actions explained and communicated?
• How is co-determination implemented in the organisation’s decision-making processes to meet the legitimate interests of local residents, impacted stakeholder groups, future generations, and nature?

Transparency creates trust and enables others to participate and make informed choices. A transparent organisation provides comprehensive insight into its activities to relevant external stakeholders (such as the local community, neighbours, media, the public, etc.). It systematically acquires new insights from different perspectives, provides complete and neutral information, actively seeks the exchange of arguments, and is open to criticism.

The stakeholders are all those relevant to the organisation that are not explicitly analysed in other themes of the matrix. For example, nature, including animals and plants, societal groups that are not directly related to the organisation, and future generations. These indirect stakeholders are often represented by interest groups or associations, who claim rights on behalf of those who do not have their own voice.

All levels of evaluation can be applied in regional and global contexts. Depending on the size of an organisation, the number of countries of economic activity, and its market power, organisations have different ways of implementing transparency and co-determination. For a small exemplary organisation in terms of turnover and number of employees, the evaluation would be based on local or regional efforts, e.g. engagement in the local industry union and exchange with peer organisations.

For large organisations with branches in several countries, reporting can concern a subsidiary or the whole organisation. Examples for subsidiaries could be engagement with the parent organisation to establish transparency standards for all subsidiaries and cooperation with peer-subsidiaries. Parent organisations should themselves adhere to the same rules, and monitor and evaluate compliance with internal regulations and a general code of conduct.

A code of conduct defines binding internal rules that an organisation agrees upon. For the evaluation, relevant parts of the code of conduct can include a transparency strategy, e.g. a publication strategy, a data-mining strategy, and co-determination standards (e.g. multi-language offers to increase participation, etc.).

Examples of certifications include ECOnGOOD Balance, ISO 14001, EMAS, GRI, VS, etc.

Organisations play a significant role in addressing local, regional, and global challenges and should use their influence to make a positive contribution, starting with ensuring impacted stakeholders have a say in organisational decisions that will affect them. Democratic decision-making and governance ensure that individuals and interest groups are involved in creating the environment everybody shares. To engage in democratic decision-making, stakeholders need competencies, resources, and accessible possibilities to deliver their opinions. Democracy education fosters the capacities of stakeholders to form an opinion, come to informed choices, and engage in decisions of local, regional, or global societal interest. Awareness of the needs of indirect stakeholders fosters a sense of responsibility for the organisation’s actions and impacts. The goal of participation and co-determination is to foster globally responsible behaviour to avoid suffering, conflicts, additional costs, and the deterioration of future prospects.

Interdisciplinary collaboration is important. Various disciplines, such as politics, science, ethics, sociology, and environmental sciences, work together to consider the interests of stakeholders who are not contractually tied to the organisation. Solutions should be developed that ensure the protection and consideration of these interests. Participatory approaches give impacted groups the opportunity to participate in decision-making processes directly or through representatives. This can take the form of consultations, public hearings, public discussions, workshops, and participation procedures tailored to specific groups. These mechanisms enable those affected to voice their concerns and directly influence decisions.

Relevant for the evaluation are:

• The scope of involved stakeholders (local, regional, global).
• The degree of co-determination (information, contact, consultation, participation, and co-determination).
• Methods and weighting of arguments and interests.
• Degree of responsibility and demonstrable implementation of measures to improve the quality of life of indirect stakeholders.
• How the organisation assesses and assumes its responsibility in the context of global economic differences and the inequitable power of stakeholders.

Co-determination by representatives means active participation and co-determination of the fundamental and operational decisions, for example, policies, strategies, and investments in projects, and can have the form of weighted votes or direct participation/co-determination in organisational committees or commissions. Measures for democracy education for stakeholders are established.

Organisations and companies have a responsibility to inform society transparently and comprehensively. When an organisation deliberately publishes false or misleading information about itself, its plans, its interpretation of facts, or its mission, it harms the common good and obstructs informed public decision-making and discourse. Harm can be caused by:

• Intentional misinformation or withholding relevant facts.
• Biased interpretation of facts.
• Distorted reporting of risks to the detriment of the public, future generations, and nature.
• Neglecting scientific findings or empirical facts.
• Reinforcing stereotypes, resentment, group-based hostility, or prejudice.
• Disseminating information for the purpose of manipulation or targeted opinion-shaping.
• Suppressing or discrediting sources of information for strategic reasons.