Magazine

Eco-Concious Companies: Irrelevant Or Inevitable?


"Beyond the green corporation" (Cover Story, Jan. 29) presents a rather optimistic assessment of the business importance of corporate social responsibility. As the article notes, academic studies have not been able to prove a direct relationship between CSR and corporate financial performance, most likely because there is none.

Ethical investment funds continue to perform no better or worse than those based on other investment strategies. For virtually all companies almost all of the time, their CSR performance, whether leading or laggard, is irrelevant to their financial performance.

Numerous companies have "done good" but not well. This unfortunately long list includes Interface (IFSIA), Levi Strauss, Gap (GPS), Body Shop (LRLCY), Ben & Jerry's, Chiquita Brands (CQB), and now Home Depot (HD). Until very recently it would also have included Marks & Spencer and Hewlett-Packard (HPQ), two of the businesses featured in the story's list of those (now) "doing well by doing good" but that recently had experienced serious financial problems. The poor performance of these outfits was not due to their being too responsible, but neither was their leadership role in CSR sufficient to compensate for other management failures. The market has many virtues, but rewarding more responsible companies and punishing less responsible competitors is not among them.

David Vogel

Haas School of Business

University of California at Berkeley

Berkeley, Calif.

The business models of some corporations cited in your story are antithetical to sustainability.

Decreasing fat in fast-food burgers may aid the health of their customers, but spreading Wendy's (WEN) and McDonald's (MCD) incredibly resource-intensive diet of factory-farm-produced meat to people presently eating grain-based diets is irreparably damaging to our planet. And no improvements to fuel efficiency or "green building" by Target (TGT) or Wal-Mart Stores (WMT) can compensate for the inherently destructive model of shipping most goods across the globe.

The goal of these publicly traded corporations is to grow in perpetuity. Where does that leave us on our finite planet?

Jeff Milchen

Bozeman, Mont.

As a manufacturer of organic mat?? tea, we're in the arena with other companies using good farming practices, pursuing pesticide-free agriculture, and raising hormone-free livestock.

Recently, however, we decided that organic certification didn't go far enough. We took greater control of our supply chain and changed the source of our main ingredient, yerba mat?? tea leaves, to a farm that is fourth-generation family-owned and Fair Trade, which means workers in Argentina are paid a living wage for their work harvesting our tea. While our commitment to sustainable Fair Trade farming is good public relations, we're now finding that our new supplier is more stable, more responsive, and more ethical in its dealings with us and our product. Switching was originally a point of great debate in our company. Now it's obvious that the benefits in terms of image and efficiency far outweigh the incremental cost per pound of the mat????nd it is the right thing to do.

Thomas Wollmann

Bombilla & Gourd Inc.

Englewood, N.J.

Whether the current drive toward corporate sustainability is genuine or mere public relations, the fact remains that, in the long run, sustainability will not merely exist as an option: It will and must become an investor-driven as well as a physical necessity. The human modus operandi is inherently shortsighted, ever overemphasizing the immediate, but as countless indicators have recently demonstrated, issues of sustainability have become very much concerns of the here and now. It is only a matter of time before these concerns garner the scrutiny of the investing public.

The earth itself is an asset, and profiting at the expense of this resource without accounting for its depreciation is not a practice that can continue unchecked. The present scale and scope of industry has left an ominous environmental footprint, and only the most arrogant of companies could be reckless enough to believe investors will ignore consequences that now loom just over the horizon.

Ari David Kopolovic

Cambridgeshire, England

Your article correctly points out that companies need to wean their products from toxic materials lest such products get shut out by the tightened regulations of European markets. But Europe is just one driver of corporate safer-chemicals policies. Many states in the U.S. are also outlawing specific chemicals for use in products and are adopting environmentally preferable purchasing practices. Additionally, many private-sector companies are implementing such practices, shutting out dirty products and creating opportunities for innovative cleaner ones.

Richard A. Liroff

Investor Environmental Health Network

Arlington, Va.

"Far from Hallmark's best moment" (Entertainment, Jan. 29) stated that the median age of the Hallmark Channel's audience is 60, "hardly the demographic advertisers crave." Given the country's more than 78 million baby boomers and their estimated $2 trillion in buying power, according to AARP, perhaps advertisers need to rethink their targets.

My cohorts buy pricey cosmetics, go hiking, and spend lots of money on our leisure pursuits. And those devices attached to our ears? They're iPods, not hearing aids. If the Hallmark Channel is "one of the most-watched offerings on cable," yet it brings in relatively few advertising dollars, then the remedy is to court advertisers who give boomers what we really want, not what someone thinks we want based on an outdated notion of what it means to grow older.

Emily Lees

Chapel Hill, N.C.

"Held hostage by health care" (Social Issues, Jan. 29) misses the larger point. It's not just workers, it's the economy that is held hostage by health care.

"Job lock" is the tip of the iceberg. "Growth lock" is on the horizon if we don't make affordable health care available to every American??nd not just the poor or children. I'm referring to aging boomers who decide to leave corporate life to start a business, as I recently did.

Those in the 55-to-64-year-old demographic are most likely to start a company. But when we do, it becomes a game of double jeopardy. We risk our savings on the venture, and we risk being told we're ineligible for individual health insurance if we or our spouses become seriously ill.

President George W. Bush and others have proposed ways to make health care more affordable through tax breaks and other means. But tax incentives will not make health care more accessible. As long as managed-care companies can deny individuals coverage based on past or future medical conditions, those who could start ventures, build products, create jobs, and boost the economy will sit tight, locked into their dead-end jobs for fear of becoming uninsurable before Medicare kicks in.

David C. Loveland

Wilmette, Ill.


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