Ethical Chic: The Inside Story of the Companies We Think We Loveby Fran Hawthorne
In this age of social activism, pinpoint marketing, and immediate information, consumers demand everything from the coffee, computer, or toothpaste they buy: 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. All companies would love to have that kind of reputation, and a handful seem to have achieved it. But do they deserve their haloes? What does it take to become so admired? 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 takes her investigative-journalism skills--honed from more than two decades as a business journalist—to analyze six favorites: Apple, Starbucks, Trader Joe's, American Apparel, Timberland, and Tom's of Maine.
“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
- Beacon Press
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Read an Excerpt
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 three books on health care and investing, including Inside the FDA and Pension Dumping.
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