I manage to find reasons to rant about Doing Business; Doing Good on more than one of my blogs, whether it's discussing employer-based health care or how to bring sustainable/organic products to the masses, and lately I've found a couple of articles/blog posts that explore these issues too. Thought I'd pass them along.
The first, on Brand Republic, examines the business behind ethical brands...namely is it good business to market ethical versions of consumer goods, especially if they come in at a higher price? Unfortunately no one seems to agree on the size of the market...and whether it's niche or not? The article cites figures everywhere from 4% of the direct to consumer spending pot being spent on ethical goods to 40% of eggs sold in Britain being touted as free-range. But the article cites a pretty clear reason why eggs might be ahead of the curve on ethical uptake:
Perhaps it is the simplicity of that choice - free-range or not - which is part of the reason for that mass-market success, however. The difficulty comes with the array of questions facing consumers as they shop. Is this a fair-trade product? Have any animals been harmed in its production?
Is it organic? Is the packaging carbon-neutral? Does the company that makes it use green energy? What about the companies that supply to them?
Much of the article echoes the points I made in my above-linked post on mass adoption of green products: availability, quality etc.
The second, from Professor Bainbridge, discusses the idea of corporate responsibility. Now the Professor brings up very good points that there is no definition of social good and corporate responsibility, and one could easily see that companies like Wal*Mart and CostCo are run by people with very different ideas on the subject. So the Professor sticks with "maximizing shareholder wealth maximization" as the proper measure of whether a business is doing good.
But: what do you consider "wealth" to be? I know the Professor is probably referring to dollars and cents, but clearly there are those of us who believe that if our choices contribute to our own sense of ethical or moral good, then we are wealthier for it.
Perhaps the answer, in a capitalist society, isn't to define for companies what equals social good, but rather to define what criteria should be made part of their public statements...thus allowing shareholders to make the better choice to increase their own personal idea of "wealth."
I'd like to see (with my acknowledged liberal slant) the following criteria included:
1. What is the ratio between what an administrative assistant makes vs. the CEO?
2. What are the stats on employees getting health coverage?
3. What are the company's charitable donations? And sponsorships?
4. What policies does the company have in place regarding recycling, conservation etc.?
5. How much does the company spend on lobbying the government?
6. What is the company's track record on diversity?
What would your criteria be?
If this information was made consistently and broadly available, would it impact how people invest? Or spend? I guess we'd find out.