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The corporate social responsibility gamble

The corporate social responsibility gamble

The free market, where it is still free, has a way of keeping companies in line that stray too far from their consumers’ core values.

That was the counter-argument (not original) I always made when, during business school at Cornell, some of our professors would tote corporate social responsibility and the “triple bottom line” as a way to insert “green business practices” into companies’ decision-making practices. Cornell’s Johnson School has gone so far down the green road that they’ve even created a Sustainable Global Enterprise center. Don’t get me started. Milton Friedman was invoked.

Back in October 2011, Unilever, the multinational consumer-goods company with brands including Dove, Slim-Fast, Lipton, Vaseline, Pond’s, and Axe, allowed its ice-cream brand Ben & Jerry’s to publicly endorse Occupy Wall Street:

The endorsement remains on the B&J website to this day. Anthony Reuben, writing for the BBC, posits that Ben & Jerry’s changed Unilever, and not the other way round, after its acquisition of the brand in 2000:

Ben & Jerry’s publicly supported the Occupy Wall Street movement and, according to co-founder Jerry Greenfield, nobody got fired.

“I am pleased that Ben & Jerry’s is able to continue its innovative mission,” he says.

“We get a lot of support – sometimes I’m a little surprised at how supportive Unilever is.”

Ben & Jerry’s and its emphasis on activism is a bold stance given broader consumer sentiment about the Occupy issue in particular. In January, Rasmussen Reports released numbers showing that only 39 percent of Americans view Occupy as a valid protest movement and that 51 percent view it as a “public nuisance.”

But it is possible that despite broad American anti-Occupy sentiment, the consumers who care about these and other issues vote with their dollars, but others will continue buying the quality product despite its political gestures. Also highly plausible is that those who purchase Ben & Jerry’s aren’t politically representative of the broader American public.

Reuben reports that “Many companies now have such [corporate social responsibility] programmes, and Unilever itself launched its Sustainable Living Plan in November 2010 which is supposed to halve the environmental impact of its products while doubling sales over the next 10 years.”

Even so, the audience Ben & Jerry’s is courting may not be as reliable as they hope. One Occupy blogger writes:

I wanted to take a moment to respond to my various friends on various social networks who are linking to the above Ben & Jerry’s announcement that the brand supports the Occupy Wall Street protests.

It doesn’t really matter what Ben & Jerry’s board of directors supports as they are merely a division of consumer products conglomerate Unilever, the third largest food company behind Nestle and Kraft. Don’t be fooled by a shallow marketing ploy.

This is one of the problems with global corporations—they can have no obligation besides profit….

It seems of late many Americans increasingly are exercising this consumer activism as a way of furthering their political say — from boycotting the advertisers who pulled out of Rush or are abandoning ALEC to those consumers who seek out local or “green” merchants. And the pro-Occupy stance of Ben & Jerry’s could color consumers’ perception of other Unilever brands in the long-term.

Milton Friedman:

 “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

If consumers really prefer companies who practice “sustainability,” or “pro-Occupy” brands, etc., then they’ll vote with their dollars. If you were a shareholder of Unilever, would you have supported this gamble? Will companies like Unilever continue to allow their brands to pick sides in the political debates of our day?

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Comments

I wrote a novel nobody read that had as a supporting character a lady who was a venture capitalist. She HUNTED for companies who had been targeted by the mau-mau specialists, and ONLY bought into them.

That was several decades ago.

One of the great things about a market economy is that it is…by nature…tolerant of consumer preferences.

I don’t care if you want to support a business that is openly Collectivist. It matters not the least to me, PROVIDED you do nothing to coerce others to conform to your beliefs.

The rub comes in because the Ben & Jerry types are NEVER content to reciprocate.

    Put it online for a time, Rags. Think of all the readers—and reviewers—you’ll get right here at LI. It might trigger sales. What’s to lose?

      Ragspierre in reply to gs. | May 25, 2012 at 2:51 pm

      You know…I just might.

      What’s to lose? Anonymity.

      But maybe it is time…

      Ragspierre in reply to gs. | May 25, 2012 at 2:55 pm

      The title is “Joe Shrugged”. It is a (VERY) modest reprise of “Atlas Shrugged”.

      The premise is that Atlas will never need to shrug, as the Atlas-types have a phalanx of very talented, highly motivated people that the Joe-types NEVER have, who run interference and blunt the effect of law and regulation.

        Sanddog in reply to Ragspierre. | May 26, 2012 at 1:35 am

        Ordered this evening. If you’re willing to put yourself “out there”, I’m willing to buy your book.

      Ragspierre in reply to gs. | May 25, 2012 at 6:05 pm

      http://www.docstoc.com/docs/121372656/Joe-Shrugged-excerpt

      That’s a piece, gs. I’d appreciate feed-back.

        I have to defer feedback on the extract because I’ve already lingered here too long.

        However, if you don’t release a free online version, you might consider an ebook (assuming you retain the rights). Lots of authors are trying to create an audience by low-cost or free ebooks, and so far Instapundit has been very accommodating about linking to them.

        Amazon offers nothing but the hardcover at full price, and IMHO that doesn’t work to your advantage.

        (Yes, I just brim with insights when no work for me is involved!)

          Ragspierre in reply to gs. | May 25, 2012 at 6:39 pm

          Hey, appreciated! Beggers…choosers…that kinda thang…

          Looking into the e-book thingy…

        DocWahala in reply to Ragspierre. | May 25, 2012 at 8:43 pm

        Rags, I went to the link with the intent of reading it and coming back to write some “polite” words of encouragement.

        I’ve changed my mind….

        I’ve decided to stop living in a world of polite words and let my dollars speak. So here’s the deal… I liked the excerpt enough to want to read the whole book, and I am willing to pay money to do so.

        On a side note, I would like to see if anyone else thinks it is time to start a group like ‘Color of Change’… But be a group that says we are no longer giving our dollars to business that support Occupy, or run away from ALEC. It is time to counter Color of Change.

        Maybe call ourselves …. Color of Green…. Or… Color of Gold.

        Anyone?

          Ragspierre in reply to DocWahala. | May 25, 2012 at 9:35 pm

          Wow. I’m grateful, Doc. You can find the title on Amazon (funny that is a loaded term, now, since yesterday).

          I lowered the price, but I have not seen it reflected anywhere.

          Ooopsie. Just checked it again, and it is now reflected on the Amazon blurb.

          I’m also looking into an e-book version, but I have a contract, so I have to go through the publisher. But I’m really honored.

          As to the other, I think we could, should, and will mount some kind of push-back. This could be facilitated via the TEA Party organizations, and various others like AMAC.

          We should work on that. I am game.

          DocWahala in reply to DocWahala. | May 25, 2012 at 11:17 pm

          Rags… Look me up on FB. We should start talking about push back. Maybe, see if we can get Prof interested as well.

Companies love it when they can cut costs and raise prices, when they can charge more for fewer products and services, and be sanctimonious about it. Only mean-spirited people would complain!

They love it even more when friendly regulators are in place to deal with low-cost wannabe competitors.

2nd Ammendment Mother | May 25, 2012 at 3:09 pm

I doubt that my meager choices are much to write home about – but when B&J announced their support for Occupy, I stopped buying their product as did my kids… no need to make a stink, just purchased something else.

The one that really made me sad was to give up The Voice after Cee-Lo’s fundraiser for Obama; less that he hosted one, but more for the things he said. I held out until Adam Levine jumped on the bandwagon.

Currently, I’m having difficulty deciding whether to expend my scarce entertainment dollar on Greater Glory – I’ve been told it’s a good message about Religious Freedom, however, I don’t wish to support Eva Longoria, who’s involved in Obama’s campaign.

JimMtnViewCaUSA | May 25, 2012 at 4:00 pm

After working at a lean-and-mean company for some years, I went back to the BigCorporate world. I’ve now worked at 3 of these behemoths in the last 5 years.
The difference from before is that back in the 1980s/1990s companies tried to make a profit. They did so legally but they did not act as advocates for political positions. Now they have what I call “commissar” departments. There is inevitably a group which is concerned with charity, global warming, being green, diversity, and the like. These groups provide nothing for the bottom line but project a set of values and advocacy which makes corporate life hostile to conservative thought.
I would be interested in reading about this development if anyone has links.
And I would certainly prefer to buy from companies which do not participate in this trend.

    Ragspierre in reply to JimMtnViewCaUSA. | May 25, 2012 at 4:12 pm

    That is a good trick, as this kind of goo is being taught in most business schools, and has been for some time.

    It falls under the rubric of “corporate responsibility”…which is utter BS from my point of view.

    In economics, the idea of “externalities” has gotten some traction…and not without some merit.

    I urge the concept of “extranalities”…or concerns that are completely or mostly extraneous to the management of the enterprise. Many aspects of being a “good corporate citizen” are entirely within the ambit of “extranalities”, and are merely a means of siphoning off money and resources that belong to the investors.

I actually wrote Unilever about this when it first occurred. I asked them if they knew they were backing a movement whose endorsements included both the Communist Party of the USA and the American Neo-Nazis party whose names escapes me. I also asked if they would be willing to similarly back the Tea Party who suffered no such problem and was working for positive change instead of rioting in the streets.

I only received a form response about how they practice social this or community that… blah, blah, blah. Which of course is exactly the problem.

I wish I had written them backing saying “Now that you have successfully diagnosed the problem what do you intend to do about it?” Somehow I think they would have missed the nuance.

    JimMtnViewCaUSA in reply to Voluble. | May 25, 2012 at 6:13 pm

    Exactly, Vol. Probably the responder was one of these commissars and had no idea why someone would put corp profits ahead of “giving back to the community”. Literally, unable to comprehend what you were talking about.

BannedbytheGuardian | May 25, 2012 at 10:02 pm

I think America should not eat that ice creme because most people are too fat.

Simple really.

Go to http://activistcash.com/ and learn more about good old Ben & Jerry’s, and Environmental Media Services Also known as a “project” of the Tides Center

…Afraid to eat dairy products from cows that have been treated with hormones to produce extra milk? Scared that the hormone, which the FDA calls “entirely safe,” will make its way into your body and cause cancer or other irreparable damage? Beginning with a huge press conference in 1998, EMS pushed that very message relentlessly for over two years. And they did it on behalf of Ben & Jerry’s, a paying Fenton client. Why would Ben & Jerry’s care? Because their ice cream is made with hormone-free milk, and David Fenton calculated that a little health hysteria would drive customers to their “alternative” product quite nicely.

It’s called “black marketing,” and Environmental Media Services has become the principal reason Fenton Communications is so good at it. EMS lends an air of legitimacy to what might otherwise be dismissed (and rightly so) as fear-mongering from the lunatic fringe. In addition to pre-packaged “story ideas” for the mass media, EMS provides commentaries, briefing papers, and even a stable of experts, all carefully calculated to win points for paying clients. These “experts,” though, are also part of the ruse. Over 70% of them earn their paychecks from current or past Fenton clients, all of which have a financial stake in seeing to it that the scare tactics prevail. It’s a clever deception perpetrated on journalists who generally don’t consider do-gooder environmentalists to be capable of such blatant and duplicitous “spin.”

The first rule of this game is that it’s strictly pay-for-play. For a price, you too can promote your product by maligning the competition with junk-science smear tactics. To Fenton Communications, you’ll be a “client”; down the hall at EMS, though, you’ll join the ranks of its “project partners.” And nobody will be the wiser….

http://activistcash.com/organization_overview.cfm/o/110-environmental-media-services

They are a part of the problem – any Tides/Fenton “client” is.

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