Wallet Mouth

Share scare for thems that care

This article in the “Business of Green” special section in today’s New York Times describes a study by two Dartmouth professors that shows stock performance suffering after companies announced that they had joined a group dedicated to combating climate change.

It reminded me of something I read about in a special report on corporate social responsibility in The Economist a couple months back: the contention that responsible practices may not actually add value to business. The article, titled “The Next Question: Does CSR Work?,” pointed out that two of the best-known sustainability indexes—the Dow Jones Sustainability Indexes and the FTSE4Good—tend to underperform the market.

I don’t buy the contention—I think it’s simply a question of timescale.

And indeed, the Economist article went on to refer to a recent academic review of 167 studies over the past 35 years that concluded “there is in fact a positive link between companies’ social and financial performance” (albeit a weak one). It also pointed to Goldman Sachs’s GS SUSTAIN model, which considers responsible environmental, social, and corporate-governance practices to be “‘a good overall proxy for the management of companies relative to their peers’, hence indicative of their chances of long-term success.”

That’s reassuring. As our planet starts having to pay the bills for its dwindling resources, responsible practices will undoubtedly enhance value. The time to act is now.

Shoemaker takes responsible step

Hooray for transparency! Adidas has made its list of global supplier factories public. (And I just learned that Nike did the same thing way back in 2005.) The move has been lauded by the International Textile, Garment and Leather Workers’ Federation, Oxfam Australia, and other civil society groups—many of which lobbied the companies extensively over the years on this issue, so they deserve congratulations too.

I’m not saying you should run out and buy a pair of sneakers to celebrate—after all, labor abuses are still rampant in sportswear manufacturing, as various Oxfam reports and analyses relate (check out these links to learn more). But it’s a far cry from the days when these companies refused to reveal their factory locations because of competitiveness concerns. (Of course, that’s still the case with many businesses, including über-greeny online store Gaiam.)

Any move toward greater corporate transparency concerning supply chains deserves kudos, in my book.

Cheers and jeers for China

In a recent post, I mentioned a green-minded shopper butting heads with Macy’s over being given an unwanted plastic bag. Now comes an interesting paradigm reversal: I never thought I’d see the day when the Middle Kingdom out-greened the U.S., but China just banned plastic shopping bags. (Although, to be fair, I must mention that San Francisco recently beat it on that front with its own ban.) Starting in June, the production of totes less than 0.025 mm thick will be illegal in China. What do you say to that, Macy’s? (And when are you going to respond to my email?)

It’s great to hear about the plastic-bag prohibition, but my smile fades when I read stories like this one from the New York Times, which reminds us that worker abuse in China is still common, despite the fact that many businesses are starting to get a clue about CSR (corporate social responsibility) and take such issues seriously. Indeed, a number of big companies now hire auditors to inspect their supplying factories.

I’ve discussed problems in the social auditing industry before, and they reappear in this article: factories being warned about audits beforehand, managers bribing inspectors, etc. I’d like to think that China’s new labor law, which just went into effect at the beginning of the month, will help, but I have my doubts (though I applaud it as a first step). In a country where corruption is so rampant, the enforcement of laws is so fickle, and independent unions remain prohibited, it’s hard to be overly optimistic about labor.

But at least there will be fewer plastic bags.

What’s really scary about Halloween

Pumpkins are sprouting up on front steps, and synthetic spiderwebs are spreading throughout windows and doorways in my neighborhood. In a week, trick-or-treaters will blanket the area to collect all manner of sugary confections. But just as Halloween has a dark side (from its origins in warding off evil spirits to such present-day irritants as oversexualized kids’ costumes), so do all those sweets.

Top candy manufacturers such as Hershey’s, Mars, and Nestlé—the makers of most of the treats that will fill those bags on All Hallow’s Eve—have long been criticized for sourcing their cocoa from West African producers with unsavory labor practices. Chocolate isn’t the only culprit, of course; social and environmental injustices can lurk behind other ingredients and in other parts of the supply chain as well.

There are some signs of progress: Hershey’s and Nestlé, for example, have signed on to the International Cocoa Initiative, and Hershey’s this year worked with Verité and Business for Social Responsibility to create a code of conduct that addresses fair-labor practices as well as the environment and food safety in all its suppliers. But many conscious consumers are still understandably wary of Big Candy.

Then there’s the health aspect of the annual feeding frenzy; the statistics on childhood obesity today are nothing if not worrying.

In response, some forward-thinking people and organizations have come up with a couple of interesting twists on Halloween. Corey Colwell-Lipson, a mother who was inspired by the households in her Seattle-area neighborhood that gave out non-candy items last year, founded Green Halloween, an initiative that encourages parents hand out healthier edibles (like organic juice boxes) and keepsakes instead of confections. It also advocates for focusing more on costumes and the social aspects of the holiday than the caloric ones. (Thanks to Lonnie for turning me on to this one.)

Meanwhile, Global Exchange is publicizing reverse trick-or-treating, in which costumed kids give fair-trade sweets and informational postcards to the households they’re supposedly hitting up. I tend to share World Changing’s skepticism of just how fun this would actually be for the little tykes, but hey, it’s worth a try.

In any case, I like the fact that so many people are “thinking outside of the candy box” (to quote Green Halloween) this year. Hmm, Mr. Wallet Mouth and I have a bunch of leftover blinky dice we had made as gifts to hand out at Burning Man; perhaps those would make good treats (not for compulsive swallowers, though). At the very least, we’ll have to scare up some fair-trade chocolate.
Mmmm!

Ethical threads turning heads

To Mr. Wallet Mouth’s general relief (if occasional chagrin), I’ve never much gone in for haute couture. That said, I do wish I could teleport to Paris for the Ethical Fashion Show, which starts today. Now in its fourth year, the conference touts itself as a “unifying event” that fosters dialogue between industry players and promotes responsible designers.

And of course, it promises to be quite a spectacle, with exhibitors bringing the latest in catwalk fare from such far-flung locales as Chile, Indonesia, and Azerbaijan.

The 100-odd participating designers were invited only after meeting demanding criteria. They must comply with International Labour Organization rules concerning wages, health care, and the right to unionize. Dyes or other fabric treatments used must not be harmful to the environment. A portion of profits must be reinvested into local communities. Working with local craftspeople and making frequent use recycled materials is encouraged. And so on.

The show also features lectures examining ethical fashion entrepreneurship, responsible fashion in education, and the market for ethical fashion.

The latter topic is the one I find most interesting. As is the case with so many “sustainable” products, ethical clothes often come with a high price tag that puts them out of reach for many consumers. Apparel that doesn’t harm people or the environment shouldn’t be a luxury, but all too often it is.

The flip side is that events like this expose more companies to the idea of ethical threads and generate ever more demand for them. This should lead to economies of scale and to wider availability of nonexploitative fashion.

But in the meantime, many of us slumming at the bottom end of the market can rest easy shopping in an already-ubiquitous low-impact way—at the local secondhand shop.

Current events

Yesterday I attended a Tom’s of Maine press briefing on the company’s new Rivers Awareness Partnership, in which it will donate $1 million over five years to two nonprofits focusing on riparian issues.

It was a small, feel-good affair that gave American Rivers and the River Network a chance to talk about their laudable work, and it let Tom Chappell, a friendly fellow who resembles a more approachable John Kerry, describe how the grant is the outgrowth of his company’s long-held commitment to social and environmental responsibility: “Better values build better value,” etc.

One reason I went to the event is that the company’s acquisition by Colgate-Palmolive in 2006 was one of the things that led me to start this blog. I’d already become interested in corporate parentage and buyouts, but when that purchase happened, it put a real bee in my bonnet—perhaps because Tom’s was the first green brand I ever encountered, thanks to a college roommate who used the toothpaste.

Why shouldn’t the label on my Cinnamint tube be required to say, “A Colgate-Palmolive brand”? It’s a disservice to consumers, who are understandably skeptical of multinational corporations, that companies are not (and are not coerced to be) completely open about such information.

This opacity is particularly irksome when it’s companies or brands that base their appeal on progressive values that fail to volunteer this information freely. Consider Odwalla, now owned by Coca-Cola: unlike Tom’s, its website contains no disclosure or acknowledgment of its acquisition—even in the homespun “Who We Are” and “History” sections.

I felt Chappell out—not about the labeling question specifically, since that was off-topic, but about the ownership issue. I asked him whether the ability to give the rivers grant came in part from being owned by Colgate-Palmolive, and what the negatives and positives of the arrangement had been so far in the context of the company’s mission.

“They respect our values,” he replied. “They’re our biggest supporters.” And no, the grant had nothing to do with the Colgate partnership, as Chappell put it—Tom’s level of charitable giving hasn’t changed. He characterized Colgate-Palmolive as having principles similar to those of his company, and added that “if we don’t bring our values to scale, we won’t succeed.”

I hadn’t done my homework on Colgate-Palmolive before the briefing, alas, but I can tell you now that the company has been criticized for its environmental reporting, its use of animal testing, and its role years ago in polluting the Chemsol Superfund site. It gets a middle-of-the-road rating of 40 from Climate Counts, which describes it as being “at an early stage of addressing climate change,” a “poor” score of 5 from Ethiscore, and a neutral-to-negative rating from Knowmore.org.

To be fair, that’s Colgate’s record, not Tom’s. The latter company has pretty unimpeachable green credentials; indeed, it has been a leader in the sustainable-business world, and it seems—so far, at least—to be operating autonomously from its corporate parent. I still use Tom’s toothpaste. But guilt by association is all it takes for some people to stop buying your product.

As my parents always told me, be careful of the company you keep.

Another score for fair trade

I learned about Fair Trade Sports, Inc. the other day, when founder Scott James commented on my previous post, and it’s so cool I just have to blog about it. Who knew there was such a thing as a fair-trade pigskin? I certainly didn’t, until now.

James’s company, which was started about a year ago, is the first in the U.S. to sell fair-trade sports balls—for football, futsal (indoor soccer), rugby, soccer, and volleyball—as well as sweatshop-free sports apparel. And if that weren’t enough, it donates all after-tax profits to domestic and international children’s charities.

It’s worth checking out the site, which contains lots of interesting articles and links. I particularly liked the explanation of where FTS balls are made and by whom.

Pondering Anita Roddick’s legacy

I don’t think I’ve ever bought anything from the Body Shop. In fact, I remember being turned off by the overpowering fog of fragrance that emanated from the first location of the store that I noticed.

But I recall being impressed by reports I’d hear over the years about the environmental and social consciousness of Body Shop founder Dame Anita Roddick, who died yesterday after suffering a brain hemorrhage, and how she sought to have the company reflect and embody her ideals. (Roddick championed rainforests, opposed animal testing, crusaded for the rights of indigenous peoples and initiated trade agreements with them ... the list goes on.)

The company has also seen its share of denouncements, with critics arguing that it has not lived up to its stated ethics (one such critic, Jon Entine, has published a number of articles on the subject).

Last year, the Body Shop’s sale to cosmetics powerhouse L’Oréal—which uses animal testing and one-quarter of which is owned by corporate persona non grata Nestlé—heralded a drop in popularity for the company and prompted boycott calls. Ethiscore gives the Body Shop a “very poor” rating of 4.5 out of 20, citing the retailer’s “profiteering from pollution” and its use of potentially harmful chemicals and ingredients tested on animals.

Still, reading Roddick’s obits today, I couldn’t help but feel inspired by her life and work. She was clearly a passionate woman who genuinely cared about the causes she publicized; she was blogging about one of those causes, the situation of the American prisoners known as the Angola Three, on her site as recently as five days ago.

Whether or not the Body Shop ultimately betrayed its ideals, Dame Anita Roddick was a pioneer who succeeded in getting the notion that businesses can be ethical as well as profitable on much of the world’s radar. She helped create the conditions and momentum for much of the fine work being done today in the realm of responsible consumerism. And for that, I am thankful.

Bull in the China shops

Concerns about sweatshops and ethical-labor practices have been on the contemporary public radar ever since the early to mid-1990s, when the Kathi Lee Gifford child-labor fiasco and other scandals erupted in the mainstream media.

I’ve been learning as much as I can about these issues recently, and I was excited to discover the existence of auditing organizations such as the Institute for Marketecology, Social Accountability International, and Verité that conduct independent inspections of factories and other types of production facilities to ascertain whether certain codes of conduct are being met. If the facility passes muster, it gets a certified stamp of approval.

What a great idea: a way for consumers to ensure that they’re not subsidizing exploitative business practices, and for responsible corporations to put their money where their mouths are. I’ve even started pestering companies to encourage them to take part in such certification programs.

So imagine my dismay when I came across this Business Week article about Chinese factories that deceive auditors in order to be certified. It’s well worth reading in its entirety, but the gist is that nowadays it’s commonplace for factories in China to maintain extra sets of books containing falsified records, and to distribute scripts for workers to recite if they are questioned by inspectors. Not only that, but “a new breed of Chinese consultant has sprung up to assist companies … in evading audits,” the article states.

Pretty depressing, huh? But not entirely surprising.

I’m still digesting the contents of this article, but a few thoughts come to mind. One is that, as much as I sometimes enjoy heaping scorn on big business and calling large companies “evil,” it’s not always as black-and-white as that. After all, big players such as Disney, Nike, and Wal-Mart regularly use auditing organizations, and the large-scale pressure these companies provide has undoubtedly helped check some of the worst abuses. The system is certainly imperfect, but at least these institutions are in place; that’s the first step to meaningful reform.

Another thought is just how much, for me, China represents so many of the complexities, contradictions, and shortcomings of the global economy. I’ll no doubt be thinking about that tonight when I see Manufactured Landscapes, a new documentary about Edward Burtynsky, whose awe-inspiring photographs capture just how massive industry in China is.

Tippling with a conscience

... or, as Mr. Wallet Mouth calls it, “malternative energy.” 

Anyway, my favorite beer is green! The July/August issue of the Sierra Club’s magazine reports that the Sierra Nevada Brewing Company, based in Chico, Calif., is supplementing its hydrogen fuel cells with solar panels that will together generate 75 percent of the brewery’s electricity, along with heat for the beer-making process. Cheers to that!