Ethical Chic: The Inside Story of the Companies We Think We Love

Ethical Chic: The Inside Story of the Companies We Think We Love

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by Fran Hawthorne

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“Hawthorne gives readers an impartial picture of the difficulties of running a profitable company while trying to maintain a positive corporate belief system…Highly recommended.”—Library Journal, starred review

Consumers are told that when they put on an American Apparel t-shirt, leggings, jeans, gold bra, or other item, they


“Hawthorne gives readers an impartial picture of the difficulties of running a profitable company while trying to maintain a positive corporate belief system…Highly recommended.”—Library Journal, starred review

Consumers are told that when they put on an American Apparel t-shirt, leggings, jeans, gold bra, or other item, they look hot. Not only do they look good, but they can also feel good because they are helping US workers earn a decent wage (never mind that some of those female workers have accused their boss of sexual harassment). And when shoppers put on a pair of Timberlands, they feel fashionable and as green as the pine forest they might trek through—that is, until they’re reminded that this green company is in the business of killing cows. But surely even the pickiest, most organic, most politically correct buyers can feel virtuous about purchasing a tube of Tom’s toothpaste, right? After all, with its natural ingredients that have never been tested on animals, this company has a forty-year history of being run by a nice couple from Maine . . . well, ahem, until it was recently bought out by Colgate.
It’s difficult to define what makes a company hip and also ethical, but some companies seem to have hit that magic bull’s-eye. In this age of consumer activism, pinpoint marketing, and immediate information, consumers demand everything from the coffee, computer, or toothpaste they buy. They want an affordable, reliable product manufactured by a company that doesn’t pollute, saves energy, treats its workers well, and doesn't hurt animals—oh, and that makes them feel cool when they use it. Companies would love to have that kind of reputation, and a handful seem to have achieved it. But do they deserve their haloes? Can a company make a profit doing so? And how can consumers avoid being tricked by phony marketing?
In Ethical Chic, award-winning author Fran Hawthorne uses her business-investigative skills to analyze six favorites: Apple, Starbucks, Trader Joe’s, American Apparel, Timberland, and Tom’s of Maine. She attends a Macworld conference and walks on the factory floors of American Apparel. She visits the wooded headquarters of Timberland, speaks to consumers who drive thirty miles to get their pretzels and plantains from Trader Joe’s, and confronts the founders of Tom’s of Maine. More than a how-to guide for daily dilemmas and ethical business practices, Ethical Chic is a blinders-off and nuanced look at the mixed bag of values on sale at companies that project a seemingly progressive image.

Editorial Reviews

Publishers Weekly
Joining the backlash against corporate social responsibility, journalist Hawthorne (Inside the FDA) evaluates six companies (Tom’s of Maine, Timberland, Starbucks, Apple, Trader Joe’s, and American Apparel) that have built brands around goodness, and asks: “Do they deserve their haloes?” In reviewing the impact of these companies on the environment, treatment of workers, and public service, Hawthorne’s methodology is mainly qualitative, based on interviews with company representatives, union leaders, and staff at various watchdog organizations. One of her biggest criticisms is the price premium some companies can command in the marketplace. Here Hawthorne’s argument is inconsistent, as when she criticizes American Apparel for nearly going bankrupt (“It might seem that a key requirement for a socially responsible company would be... to stay in business”) while also accusing Starbucks of overpricing coffee (“it is socially irresponsible for Starbucks to claim the ethical mantle while pricing out people who can’t afford its wares”). No one expects the author to resolve such conundrums; however, these pronouncements, set alongside attempts to maintain journalistic objectivity, make for a confusing read. Agent: Lauren E. Abramo, Dystel & Goderich Literary Management. (June)
From the Publisher
“Hawthorne's research provides clear, rational insights into our ethical choices, empowering us to be savvy shoppers.”—Kirkus Reviews

Ethical Chic will change the way you see the products lining the supermarket shelves, and even maybe the supermarket itself.” —Michael Blanding, author of The Coke Machine
“Highly recommended.”—John Rodzvilla, Library Journal, starred review

“Fran Hawthorne’s illuminating book will delight fans of 'corporate social responsibility'—and enrage its critics. Her descriptions of Apple, for example, at once beloved and much criticized by the CSR crowd, aptly captures the essence of the debate.”—Adam Lashinsky, author of Inside Apple

“In assessing corporate performance on social responsibility, Fran Hawthorne digs beneath the surface of some of America’s most beloved companies. Given the multiple dimensions of sustainability and ethical performance, it can come as no surprise that she finds no company is perfect. But there are differences. Bravo to Ethical Chic for helping to illuminate which companies are on the right track.”—Daniel C. Esty, co-author of Green to Gold

“A very informative look.”—Booklist

Ethical Chic is a lively and engaging look at the environmental, labor, and social practices of six legendary US companies. It’s a must-read for any consumer interested in spending their money in socially conscious ways.”—Sally Greenberg, executive director, National Consumers League

Library Journal
Journalist Hawthorne (The Overloaded Liberal: Shopping, Investing, Parenting, and Other Daily Dilemmas in an Age of Political Activism) analyzes six companies that have a reputation of being hip, ethical, and socially responsible: Tom's of Maine, Timberland, Starbucks, Apple, Trader Joe's, and American Apparel. Hawthorne draws from interviews as well as corporate reports to present a case study of each company's level of social responsibility and evaluates whether or not they deserve their reputation for being ethically hip. While other titles, most notably Gary Hirshberg's Stirring It Up, Bo Burlingham's Small Giants, and Jeffrey Hollender's What Matters Most, cover similar ground, Hawthorne's inquiry is more comprehensive, examining each company's record on environmental impact, human rights, working conditions, cost of the product to the consumer, and relationship with corporate owners. VERDICT Instead of writing hagiographies of well-known, socially active companies, Hawthorne gives readers an impartial picture of the difficulties of running a profitable company while trying to maintain a positive corporate belief system. This will appeal to the socially conscious consumer interested in how companies struggle to balance their beliefs with practical concerns. Highly recommended.—John Rodzvilla, Emerson Coll., Boston
Kirkus Reviews
Brands popular both for their social currency and image of social responsibility go under journalist Hawthorne's (The Overloaded Liberal: Shopping, Investing, Parenting, and Other Daily Dilemmas in an Age of Political Activism, 2010, etc.) microscope in this exploration of how closely the ethical words match up to corporate actions. In today's consumer world, advertising, publicity and marketing are mostly geared toward drawing customers to the brand, rather than pushing the product. Akin to social media, where people connect via shared interests, today's best-known brands seek to create communities based on shared product appreciation. One of the common elements companies seek to build these communities around is an ethical approach to business. Caretaking of the environment, fair treatment of workers and a focus on "doing the right thing" are as important as the profit margins. Hawthorne turns an optimistic-but-skeptical eye on a half-dozen companies to dig past the marketing hyperbole and explore actual practices. The companies--Apple, Starbucks, Trader Joe's, American Apparel, Timberland and Tom's of Maine--all purport to carry that best-case combination of ethical practices and "cool products." In reality, however, they all make significant concessions in pursuit of growing profits. Hawthorne wisely avoids taking a staunch green-or-not approach, instead taking into account the various complexities and realities of doing business in a world that doesn't always provide the infrastructure necessary to make a purely ethical business decision. The author ably explains the standards by which the industries police themselves and the different layers of whitewash and how they're applied to some egregiously unethical policies. She also acknowledges that a company's ethical practices, while increasingly important to younger consumers, are still far from being make-or-break factors for these entrenched status brands. American Apparel still runs ads designed to titillate; Tom's of Maine is now owned by Colgate. Hawthorne's research provides clear, rational insights into our ethical choices, empowering us to be savvy shoppers.

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From the Introduction

Company X is an ideal progressive company. Its products have dra­matically challenged conventional thinking while helping people from cerebral palsy patients to schoolkids in Africa to antigovernment protes­tors in Iran, Tunisia, and Egypt. Its cofounder, a vegetarian, was married in a Buddhist ceremony in Yosemite National Park. Its website posts de­tailed information about its carbon emissions; moreover, it was the first in its industry to eliminate the most common toxic ingredients. And it has done all this while competing against one of the biggest, most hated companies on Earth. Cutting-edge, creative people wouldn’t think of us­ing anyone else’s products.

Company Y, on the other hand, is a terrible company for progressives. Its nonunion employees historically labored long hours at the whim of a micromanaging chief executive who changed his mind at the last minute and made impossible demands. Overseas, it uses Chinese sweatshops so dreadful that a dozen workers have committed suicide. It has been slow on environmental issues, acting only after intense prodding by socially responsible mutual funds and a big public campaign from Greenpeace. Actually, it’s hard to know anything about this company because it’s so secretive that its press people don’t return phone calls.

Of course, Company X and Company Y are the same company. The name: Apple Inc.
In this age of consumer activism, pinpoint marketing, and unlimited and immediate information, we want the impossible: products and producers that will assure us that we are fashionable, and that don’t pollute, harm animals, or contain weird chemicals, that run on alternative energy, pay their workers good salaries, recycle their scraps, use natural ingredients, buy from local suppliers, donate generously to charity, donate in par­ticular to their neighborhoods, and don’t throw their weight around by lobbying. (Or maybe they should lobby for the right causes?) Why should we pay good money for something that will make us look nerdy, or that will poison the Earth? We don’t think we’re being overly demanding. All we’re asking for are the kinds of policies we try to follow in our own daily lives, and if we can manage to recycle and avoid animal products, then certainly big companies, with all their clout, can do likewise.

Hard as it is to be so many things to so many consumers, a handful of companies and products—like Apple, Ben & Jerry’s ice cream, Con­verse sneakers, and the grocery store chain Trader Joe’s—seem to have hit that magic bull’s-eye, at least for a time. Almost no matter what they do, they maintain an image of being cool, fun, and innovative and, at the same time, an equally strong image as green, politically progressive, and ethical.

As a result, their customers are fiercely loyal. At Macworld, the an­nual conference for users and vendors of Apple products, held in San Francisco in 2010, I met fans who had traveled at their own expense from as far away as Iowa, Illinois, and Michigan just to meet kindred souls and to ooh and ahh over the newest add-ons. And mind you, this was a gathering without the magical presence of Apple’s legendary cofounder, Steve Jobs. Meanwhile, Naomi A. Gardberg, an assistant professor at the City University of New York’s Zicklin School of Business, has friends who will drive thirty miles to get to Trader Joe’s.

Even during the 2008–2009 downturn and the weak recovery af­terward, BusinessWeek magazine noted in amazement that stressed-out, debt-ridden, mortgage-foreclosed consumers still found spare change (or unused credit lines) for Apple iPads and Starbucks lattes. They would forgo a new car, switch from brand-name to generic toiletries, and pick up shampoo at discount outlets, the magazine said in an August 2010 cover story. But Apple and Starbucks were irreplaceable.

Investors, too, are more willing to cut certain firms a little slack. “Some companies have built so much trust that shareholders are less likely to vote against management,” explained Laura Berry, executive di­rector of the Interfaith Center on Corporate Responsibility (ICCR), a New York City–based organization that represents about three hundred reli­gious institutions and is one of the pioneers of the movement for socially responsible investing. “In some ways, if shareholders bring a resolution that says, ‘We want you to report more about your environmental sustain-ability,’ and Apple says, ‘We’re making our best efforts—you should just trust us and don’t vote against us,’ we’re going to believe them.”

In return, more and more business executives are recognizing that ethical-trendy shoppers are a big and growing market. While the desire to be trendy is nothing new, the other factor—what’s often called corpo­rate social responsibility, or CSR—has burgeoned more recently.

When Walmart announced plans to run its trucks more efficiently, switch to solar energy at two dozen sites, promote energy-saving com­pact fluorescent lightbulbs (CFL), use recyclable cardboard cartons, and maybe even install windmills in its parking lots so customers could recharge their hybrid cars, it was clear that the environmental move­ment, at least, had gone Main Street. Institutional Investor, a trade journal that goes to the upper tier of business and finance, devoted a two-part cover package in November 2010 to socially responsible investing—a favorable package. The fortieth anniversary of Earth Day in 2010 “has turned into a premier marketing platform for selling a variety of goods and services, like office products, Greek yogurt, and eco-dentistry,” the New York Times reported. Even the crusty British weekly the Economist re­luctantly succumbed, in a special issue about CSR on January 19, 2008, with the cover headline “Just Good Business.” It harrumphed, “This newspaper has argued that it is often misguided, or worse. But in practice few big companies can now afford to ignore it.”

Thus, consumer-oriented businesses are trying to find the words, logo, and image—and, of course, products—that will indelibly brand themselves as the Apple or Trader Joe’s of their industry. Unilever, which markets the chemical-laden Knorr soup mixes, reached out to the or­ganic crowd by acquiring Ben & Jerry’s. The Clorox Company—whose chlorine bleach is despised by environmental activists for damaging sewers and aquatic life—made a dual effort: It bought the homespun cosmetics company Burt’s Bees, founded by a bearded guy who lived in a converted turkey coop in Maine. Plus, it has a new line of plant-based, “green” household cleaning products that touts an endorsement from the Sierra Club. McDonald’s has recast some of its outlets with chocolate-colored seats and muted beige walls to look like Starbucks. (Sort of.)

The more that businesses incorporate the image of socially respon­sible hipness, however, the harder it is for consumers. How can they tell whether the picture of happy cows grazing in a meadow is a marketing mirage? Did Clorox co-opt Burt’s Bees? When Starbucks says it buys fair-trade coffee, what does that mean?

Investigating a firm’s ethical credentials would seem to be fairly straight­forward, because plenty of organizations monitor and produce rosters of “best” companies in a whole range of categories. On the environmental front, according to a directory called the Ecolabel Index, there are at least 365 seals and certifications in 214 countries. For instance, Greenpeace publishes industry-specific lists, including a “Guide to Greener Electron­ics” for tech manufacturers and a “Supermarket Seafood Sustainability Scorecard”; the nonprofit coalition Ceres issues awards, reports on the sustainability efforts at particular businesses, and posts a list of the eighty-plus “network companies” that have met its green criteria; and the non­profit environmental organization Climate Counts analyzes the efforts to reduce and measure carbon emissions at the largest firms in seventeen consumer industries.

Which companies treat their employees well? Fortune magazine each year publishes its choice of the “100 Best Companies to Work For,” rank­ing nominees according to their internal communication, training, safety, work-life balance, pay, benefits, nondiscrimination, camarade­rie, and so on. Working Mother has a different set of 100 companies that focuses on working moms and criteria such as flextime, parental leave, child-care benefits, family health coverage, and adoption reimburse­ment. Other magazines have offered their own lists centered on their particular specialties, including Latina Style’s top 50 companies for His­panic women and Black Enterprise’s “40 Best Companies for Diversity.” An arm of the AFL-CIO posts an annual roster called “The Labor Day List: Partnerships That Work” in order “to recognize successful partnerships between employers and their employees’ labor unions that are working well in the global economy,” as the accompanying report puts it.

In the federal Equal Employment Opportunity Commission’s ar­chives, you might find press releases announcing lawsuits alleging ra­cial or sex discrimination at various businesses. Homing in specifically on the treatment of lesbian, gay, bisexual, and transgender workers, the Human Rights Campaign has a “Corporate Equality Index” that rates companies on factors like whether they have a formal nondiscrimina­tion policy or offer domestic-partner benefits. In addition, a consumer might look at the number of women and minorities on a company’s board of directors, at least for symbolic reasons, although Aaron Chatterji, an associate professor at Duke University’s Fuqua School of Business, sug­gests that such percentages “may not reflect the way they treat people throughout the firm.”

It’s a little tougher to analyze working conditions at factories over­seas. A lot of organizations monitor them, and activists disagree on which to trust. The Fair Labor Association? The Worker Rights Con­sortium? Verité? TransFair USA? Sweatshop Watch? Labour Behind the Label? Students & Scholars Against Corporate Misbehavior? The Global Union Federation? Specialized Technology Resources (better known as STR)? Regardless of the monitor, the brand-name multinational com­panies that contract out to those factories should have codes of conduct guaranteeing a right to collective bargaining and free association, labor experts say. Even better—but rare—would be a guarantee of a living wage, not merely that country’s minimum wage (since the factory should theoretically pay the minimum anyway, with or without a code).

Still more. For ethical corporate behavior in general, there are lists from GoodGuide, Corporate Responsibility (or CR) magazine, Business for Social Responsibility (BSR), and Green America (which, despite the name, chooses members of its Green Business Network based on whether they are “values-driven” and “using business as a tool for social change,” not greenness), to name only a few. Consumer Reports analyzes products’ reliability, quality, repair record, price, and customer satisfac­tion. At People for the Ethical Treatment of Animals (PETA), the “Caring Consumer” database names businesses that do and don’t test their prod­ucts on animals. Concerned shoppers and investors can also check the names approved by the socially responsible mutual funds run by finan­cial managers like the Calvert Group, Domini Social Investments, and Pax World Management Corporation. As a gauge of political leanings, the Center for Responsive Politics has detailed listings, going back more than a decade, of contributions to federal campaigns by companies and individual employees, as well as money spent on lobbying.

And I’ve left out dozens of others.

All these sources and rankings illustrate one big problem: ethically hip consumers are trying to follow too many—and often conflicting— criteria. Does the company use organic ingredients? Does it test its ingredients on animals? Does it obtain its ingredients from local sup­pliers? What if the sole source of organic, animal-safe supplies is im­ported? What if the organic item looks uglier than the one made with pesticides? What if it’s twice as expensive? Furthermore, are its employ­ees unionized? Does it recycle? Does a company have to pass every “test” to be considered ethical?

Meet the Author

Award-winning journalist Fran Hawthorne has been a writer or editor at For­tune, BusinessWeek, Institutional Investor, and other publications. She is the author of four other books, including Inside the FDA, Pension Dumping, and The Overloaded Liberal. She lives with her family in New York City.

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