How can we get corporations to operate more sustainably?
Lefties often characterize corporations as ruthless automata like the Terminator, grinding toward a goal — short-term profits — with no consideration of social or environmental consequences. I don’t think that is quite accurate, at least not in all cases. Though there is structural bias toward short-term thinking in the very nature of incorporation (exacerbated by the requirement in the U.S. to report profits every quarter), corporations are in fact composed of people. People, though often misguided, are rarely sociopaths. People within corporations who struggle to make them more humane and green can and do have an effect.
Perhaps instead of thinking of corporations as terminators, we should think of them as overgrown toddlers, stumbling erratically in search of instant gratification but susceptible to behavior modification.
As the parent of a toddler, the best piece of advice I ever heard is this:
- Create a fairly short list of behaviors that are absolutely verboten and enforce that list ruthlessly, without negotiation;
- the other 95% of the time, focus on positive feedback and don’t sweat the small stuff.
It’s worked well for me, and I think greens should consider applying it. Right now their parenting skills are lacking.
Several years ago, I learned that Levi Strauss & Co., which at the time was the largest cotton buyer in the world, had begun sourcing 2% of its annual cotton purchases organically. Levi’s wasn’t planning to manufacture an organic line of jeans (they already had tried that and failed). Rather, they were simply blending it into their conventional cotton purchases. They hoped, over time, to ratchet up its purchases with the aim of helping to grow the market for organic cotton.
This was big news and I wanted to write about it for The Green Business Letter, my monthly newsletter. I contacted Levi’s but was rebuffed; they didn’t want to discuss it on the record. I persevered and eventually prevailed.
When I finally interviewed a Levi’s spokesman, among my first questions was, “Why didn’t you want to talk about this?” He explained, in effect: “Look at it from our perspective. If we start promoting this publicly, we need to explain why we’re doing this — that roughly a fourth of all the chemical pesticides used in the United States are applied to cotton, with all of the environmental and personal health impacts that result. In doing so, we risk our customers saying, ‘So, you mean 98% of your basic materials are bad for people and the environment? Then why only 2% organic? Why not more?’ Because the organic cotton market is so small, we can’t even ensure we can maintain 2% every year, so it’s less risky for us to be doing this without a lot of fanfare.”
Also, consider Nike’s new line of shoes. My first response upon hearing about it was that it was greenwashing. But Joel — rare among bloggers in having first-hand professional experience in the areas he writes about — has actually been consulting for Nike for years. Turns out, ever since the 1998 lawsuit that accused them of making false statements about their labor practices, they’ve clammed up entirely about matters of social and environmental responsibility. But they’ve been working on it:
… Nike has been undertaking for several years to reduce waste, eliminate toxic substances, and otherwise lessen the environmental impact of the world’s largest athletic shoe manufacturer. (This is where my consulting has played a small role.) The company has a publicly stated goal to “Minimize or eliminate all substances known to be harmful to the health of biological or ecological systems,” and it seems to be making good on that promise. Three examples: Nike is well on its way to eliminating highly toxic polyvinyl chloride (PVC) from all of its products; has eliminated more than 90% of the solvents, glues, and other ingredients that are harmful to people and the environment; and is now the world’s largest buyer of organic cotton. Granted, they’re far from environmentally perfect, but they seem hellbent on getting there.
So: they’ve been taking steps in the right direction but until now they’ve been, like Levis, scared to talk about it. And why are they scared to talk about it? Because if they start making noise about green stuff, they’ll pop up on the radar of green groups, who will then proceed to publicly chastise them for not doing more, for still being, on balance (like most corporations), in environmental deficit. It’s not worth the hassle.
But don’t we want them to talk about it? As a huge, influential company, wouldn’t it be a great thing if Nike was loud and proud about its pursuit of sustainability? And yet we’ve scared it into a hole. It seems we’ve created a rather perverse set of incentives.
One last example. Imagine that you are a crusty old member of the board of directors at Ford Motor Co. From your perspective, here’s what happened: You got a new high-profile CEO, Bill Ford, who came in talking a big game about environmental issues. You managed to rein him in a little bit, but he still makes a point of talking about green issues frequently and pushing your company in the direction of sutainability. You’re irritated about it, because you’re still in the mindset that sustainability means lost profits.
On top of that, the minute Bill Ford starting talking about sustainability, the green movement descended on your company like vengeful harpies, picketing, taking out full-page ads, and otherwise doing everything in its power to convince the world that all Bill’s talk is hypocrisy and in fact you are the eco-devil.
The lesson you’ve learned? Stop talking about sustainability.
Is that really the lesson we want corporations learning?
How about a little psychological finesse here? How about, if we find out that Ford is building a cutting-edge sustainable manufacturing plant, instead of using that fact to shame Ford, why don’t we use it to shame, say Chevy? Why not celebrate Ford, give them good publicity, show the skeptical officials in Ford that taking environmental chances has great PR payoff? Why not take out a full-page ad saying, “Ford is showing the auto industry how manufacturing is done in the 21st century. DaimlerChrysler, General Motors … when will you step up?”
Why not use change, no matter how small, no matter how insufficient, to leverage more change?
Let’s celebrate Levis. Let’s buy these Nike shoes, even though they’re butt ugly. Let’s offer some positive feedback and reward steps in the right direction. Instead of being the business world’s nags, let’s be its coaches. It won’t give us the same smug satisfaction we feel in always being morally superior, but it might accelerate change, and isn’t that more important?