Eco-Friendly, Socially Conscious Company Faces Tough Choices

Seventh Generation, the biggest U.S. brand of eco-friendly household products — toilet paper, diapers, soaps, etc. — is a case study in the possibilities and perils facing companies with a social conscience. Founder and CEO Jeffrey Hollender recently struggled over his decision to continue supplying the company’s products to Albertsons while the supermarket mega-chain battled with its unionized employees over benefits. In the longer term, especially as Seventh Generation grows at 20 to 40 percent annually, the company must address what Hollender calls the toughest problem facing responsible companies: scale. How can a small company built on the vision of a strong-willed founder (think Ben and Jerry’s) succeed and expand while staying true to its principles? Hollender optimistically cites mounting evidence that social conscience is a business asset, with activist shareholders increasingly coming to see that good environmental behavior is indicative of good behavior across the board.