Starbucks

Starbucks is one of the biggest buyers of  Fairtrade coffee. They do only business with farms who respect labour and environmental standards, for example minimum wages, water usages,...

Starbucks has send some of his employees to his farms. Like that, they could see what difference Starbucks makes for these farmers. They help to increase output and decrease costs.

The Guardian

I think Starbucks is a good example to show that ethics and doing business go together.
They also try to do something for the environment. As you see on their website, they have a lot of engagements. For example energy: they want to reduce energy use by 25% and get 50% of their energy from renewable sources. Water is an essential ingredient in coffee. In 2009 Starbucks reduced their water use by 4,1% and their still working on it.

This shows that you can be ethical and be profitable at the same time.

Karen Van Crombrugghe

I scream, you scream, we all scream for ice cream

From the beginning the ice cream brand Ben en Jerry’s is known for its care for the community. Even when the brand was getting more popular and they finally could reap the fruits of their hard work, they didn’t start caring less, like now they are planning to get all their products Fairtrade certified.  Ben & Jerry’s value-based business model has become an example for their parent company, Unilever.

Before there used to be a struggle between the  two companies, where  both had different values and Unilever is more consumer driven. However,  Unilever has learned from its subsidiary and applied Ben & Jerry’s values also in the other Unilever brands and implemented these values in their Sustainable Living Plan which I spoke about in my previous blog entry. (The New York Times)

As said in Jolien’s third blog, CSR does reward and Ben and Jerry’s might be the best proof of that, since they started making profit when they got known for there community-based values. Ben & Jerry’s business model sets a good example of how other firms should operate to safeguard sustainable growth.

Evelyn Stalpaert

How ethical are eco labels?

I agree entirely with Cedric. Producers more and more put their own labels on the packaging of their products. 

According to a British survey by order to the Department for the Environment, Food and Rural Affairs, the extensive variety of eco labels are experienced as confusing and deceiving by consumers. Such as Cedric mentioned in his blog, too often people wrongly think they buy ethically produced goods. These labels however, are no guarantee that every part of the supply chain has acted ethically.  

Cedric said some labels do not have any ethical requirements, which is very disturbing in my opinion. Dr Kathy Lewis, the head of the University of Hertfordshire’s Agricultural and Environmental Research Unit, confirms this fact. Just by paying a membership fee, companies are allowed to use an ‘ethical’ label. What does it mean for products with no label? Are their producers socially irresponsible? Or did they just not pay their membership fee?

Too many labels and too many different requirements make it impossible for consumers to judge the ethical level of companies. We need a more global accepted system to stamp the ethical effort. A scale, found on all products, informing consumers how harmful or harmless a product is to the environment, would bring some transparency. (Telegraph)

Jolien Nachtergaele 

Leading firms: Coca-Cola

The Coca-Cola Refreshments (USA) company recently installed two fuel cell systems in their New York production facility. Fuel cells are one of the cleanest energy sources, because they operate in water balance. This means that there’s no water pollution and no loss of water in the system. It also reduces the amount of energy that is needed from the utility grid. As a result of this there will be less emissions, because the generators that provide the utility grid with energy won’t have to operate as much as before. The positive financial advantage of a fuel cell system is that it reduces the costs, because there’s less water needed and the energy costs is also a lot lower compared to other energy sources. (The New York Times)

This is a recent article that shows the ethical progress of the Coca-Cola company. As Karen said in her article, the Coca-Cola company wants to improve their impact on the environment. My article shows that they’re investing in fuel cells to cut back on emissions. This new energy source also allows them to reduce their costs. This is a perfect example of how acting ethical can also be healthy for a company. 

Cedric Meyers

The label maze

More and more people are getting interested in ethical consumerism, but few people can recognize the true ethical labels. Nowadays companies know that some consumers are seduced by labels such as “environmentally friendly product” , “fair trade”, etc.. This is why companies tend to create their own ethical labels. These labels cause a lot of confusion amongst consumers, because each label has its own requirements. Some of these labels are very easy to get and don’t require any ethical behavior of the company. As a result of this consumers are often mislead. They think that they are purchasing ethical products, but nothing is farther from the truth. This shows the important need for more global approved labels. The ETP (Ethical Tea Partnership) is an example of such a label. It’s a label created by different companies in association with NGOs that protect ethical standards. The label requires companies to respect local laws and to create healthy working conditions in foreign plantations. The Lipton Tea company is one of the biggest leading firms that uses this label.(the guardian)

This article shows that ethical consumerism is being abused by some companies. In my opinion this is mainly the result of the fact that people don’t know enough about ethical labels. Personally, I only know the requirements for the Fair Trade label and thanks to Evelyn’s article I now also know the requirements for the Unilever label, but there’re a lot of labels about which I don’t know anything. So I think it’s important for consumers, governments and companies to create more global approved labels and to make sure that consumers know what they stand for.


Cedric Meyers

Does CSR reward?

That Corporate Social Responsibility influences consumer behavior is a fact. It seems that people really care about the extent to which a company is committed to the community and the environment. 

To begin with, being ethical has a positive, direct effect on sales. Consumers are willing to pay more for products that are ethically produced. 

Furthermore, CSR is rewarded in an indirect way. This is proved by the fact that Socially Responsible Investing  has become very popular. Socially Responsible Investing stands for investments that beside a profit motive, have an eye for environment. People who want to invest socially responsible, will just invest in firms that are doing great in their sector on ethical field.

According to Eurosif, the European Sustainable Investment Forum, Socially Responsible Investing represents 20 per cent of total investments. In my opinion, that’s a huge share. This figure demonstrates the importance of the public opinion. SRI should be a stimulus for companies to pay attention to their reputation and come up with a more social responsible management.(De Tijd)

Jolien Nachtergaele

Coca-Cola's and water

To produce one litre of final product, it takes 2,72 litres of water. Two years before, it took 3,12 litres. Therefore, activists have blamed Coca-Cola: "it is ridiculous that a firm that calls itself a hydration company wastes so much water"

A few years ago, there was a scandal in India.The Coca-Cola drinks contained high levels of pesticide. The firm also used too much water in drought-prone areas.

But the company has taken some measures to improve their use of water. They are trying to improve the efficiency of water use in each factory. There is one problem, a lot of the factories are not the companies property and local bottlers refuse.
Coca-Cola is also working together with non-governmental groups. In India, they are using rainwater instead of tap water.

The Economist

Water is a big problem in the world and it will certainly be so in the future. I think it is necessary that companies try to reduce their water use.
Coca-Cola takes these measures also for their own sake. Without water, there is no Coca-Cola.

Karen Van Crombrugghe

Unilever launches a new Sustainable Living Plan

Unilever has set up a plan wherein the carbon, water and waste impact of its products should be halved over a decade, including the impact caused by its suppliers and consumers. Through innovation and efficiency in production they will ameliorate their products.  The plan doesn’t only consist of environmental targets, but also the improvement of social conditions. They will work with fairtrade organizations like Oxfam, which benefits are already explained in Karen’s latest blog. The company will also do an effort to improve the state of health by changing the hygiene habits and purifying the drinking water in the developing countries.  (The Guardian)

I believe Unilever is a role model in business. It tries to operate by the basic principles of CSR-model.  Even though they might only want to obtain competitive advantage, it will lead to nothing but improvement both for the environment and the stakeholders. Contrary to Apple, Unilever does try to stick to its principles and cuts costs by being more efficient and not by exploiting the poor countries.

Evelyn Stalpaert

Fair trade

In conflict areas, fair trade can help to bring peace and to fight against poverty. By giving people a decent price for their work and goods, fair trade organizations try to support jobs, improve living conditions. They also try to take away young men from terrorist organization,...

But there are some difficulties to overcome. For example Afghanistan is too dangerous to send inspectors. Another difficulty is that the people in conflict zones are very distrustful of each other but to succeed, they have to work together. A third problem is logistical, especially in the West Bank.

The Guardian

I like fair trade. It helps people and country on the long term to stand on their own. But fair trade can not help everyone, only a small amount can be helped. I hope it will force other companies to pay a decent price to their workers in third world countries and in conflict zones. In this way a lot of people can be helped.

Karen Van Crombrugghe

Blame the system!

I assume everyone is aware of the impact of the globalization on the environment. Something has to change. Environmental measures need to be taken, and as soon as possible!

 

But should we really consider the actions of facebook unethical just because they use electricity? Would it be rational to invest heavily in clean energy while there are cheaper ways available? And business is all about rationality! Don’t blame facebook, blame the system!

We need to realize that the public opinion and protest actions from some environmental organizations will be far from sufficient. In the article, Greenpeace International’s executive director, Kumi Naidoo, claims that ignoring the company's environmental impacts could damage facebook’s reputation badly. I think it’s hard to believe a statement like that. Would anyone delete his facebook account after reading this article? (The New York Times)

Jolien Nachtergaele

Leading firms: Facebook, the So Coal Network

Leading firms are not only responsible for the social working conditions in a country, they can also have a huge influence on the environment. Facebook, a place to meet friends on the internet, is not as harmless for the world as it seems.  The social networking site’s data centers eat up electricity, which is mainly created with dirty fuels and only for a small proportion with renewable energy.

Greenpeace started a campaign to urge Facebook on choosing clean energy sources.  Nevertheless they  are satisfied that Facebook opted for an energy-efficient location and design for its data centers.  (The New York Times)

Honestly, I was quite surprised that a website could have such a big impact on the environment. But now the I.T. – sector is expanding strongly, one must be aware that this leads to a progressive consumption of electricity which should be fed with renewable energy. Taking care of the environment is very important in the CSR-model and shouldn’t be brushed aside .

Evelyn Stalpaert

Leading firms: Apple

Apple’s popularity has increased a lot the last few years, but nowadays criticism against Apple is also growing. Most people know Apple as a healthy company that produces innovative products, but few people know that these products are being fabricated by Chinese companies. One of these companies is Foxcon. Foxcon is known for not respecting human rights. Reports indicate that Foxcon’s workers are physically punished when they aren’t performing well and that working conditions are often very dangerous. This is why Apple is receiving more and more criticism. Apple claims their supplier code of conduct prevents such things from happening, but it seems like Apple is neglecting their own code of conduct in order to realize more profit.(The Guardian)

Although Apple isn’t acting ethical, they are forced to minimize their costs if they want to stay competitive. This is shown by the fact that Foxcon also manufactures products for other electronic firms. But I think that the balance between profit and ethic should change. In my opinion Apple can afford to reduce their profits in order to create better working conditions.

Cedric Meyers

Sweatshops: a nightmare… or a dream?

I think we shouldn’t just focus on the downside of sweatshops in Third World countries. Let’s consider the point of view of Nicholas D. Kristof:

The local population of the poorest countries could only dream of a job in sweatshops. It might involve not so great labour conditions such as long working hours and extremely low wages, but rather a job like that than no job. How strange it may seem, in the hierarchy of labour in developing countries sweatshop jobs don’t belong to the bottom. 

As D. Kristof mentioned in the article, the existence of sweatshops is a symptom of poverty. Shutting these factories down would imply a chance less for the locals to break the circle of poverty. (The New York Times)

I do realize that minimizing costs by exploiting people is all but ethical. We cannot explain away the use of sweatshops in Third World countries by leading firms. On the other hand there is no denying that the local population wouldn’t be better off without them. I think we can conclude that sweatshops are a temporary solution and a beginning of a long process to escape from poverty. 

Jolien Nachtergaele

Sweatshops

Nike is the favourite example for critism about sweatshops. In the past, Nike got a lot of negative publicity. Their reaction was denial, lash out at critics,...
Now Nike has an other strategy. They are working together with human rights groups, they have a team that inspects the factories,... Most other multinationals, like Wal-Mart, are doing nothing.

Still, Nike is doing little to the most difficult problems. These are low wages and unionization.
They are making progress but not on underpayment of wages and freedom of association.
But they are one of the few that have taken responsibility for sweatshop labor.

Bloomberg Businessweek

I think sweatshops are still a big problem in the world. Almost all big companies are using factories in third world countries.
You can't blame the companies alone, also the governments of these countries should take action to drive back sweatshops.

Karen Van Crombrugghe

CSR is spreading around the world, but in different guises

Nowadays everyone agrees that CSR(corporate social responsibility) needs to be integrated in the business strategies of companies, but  the definition of CSR isn’t the same in every country. CSR is mainly determined by traditions and priorities and this makes it impossible for global companies to use a one-size-fits all approach. The things that we find important can be considered less important in other countries. For example: emerging markets such as China will consider growth more important than human rights. This can lead to a competitive disadvantage for Western countries where NGOs force companies to respect the human rights. Nevertheless, foreign NGOs can also influence the business strategy of these Chinese companies by damaging their global brand reputation. The same can be said for foreign investors and global companies. They also have the power to force emerging markets to spend less effort on growth and more on CSR. But growth stays needed, because without the companies there will be no need for CSR.(The Economist)

As said in Evelyn’s article most people believe that integration of CSR in the business strategies of companies is needed, but this article shows that integration of CSR isn’t easy. It shows how difficult it is to create global laws that can control the ethics policy of global companies.  It also shows that companies need to search for a balance between ethics and profit. Without profit the company won’t survive and without company there’s need for CSR.

Cedric Meyers 

Ethics? Just do your business.

Companies are often wrongfully accused of doing unethical activities in developing countries. Although according to Ann Bernstein’s capitalistic view, doing normal business is enough to upgrade to a society where everyone benefits from the profits that companies make.
Poor countries have too few companies to improve the society’s welfare. Governmental rules and pressure from the NGOs deter companies to invest in Third World countries, while passing the task to solve social problems on corporate shoulders.
Bernstein doesn’t believe in the ‘triple bottom line’, but promotes integrating corporate social responsibility in the business strategy. However, the generous actions that companies sometimes undertake, are only to please the citizens so they wouldn’t undermine business activities. And so is everybody happy at last. (The economist)

Personally I do not fully agree with Ms Bernstein’s view. I think she‘s too strictly attached to the basic principles of economics where profit is the wonder medicine for everything. However I do agree that the lack of governmental involvement causes social problems.

Evelyn Stalpaert