How to teach a corporation to behave
Earlier today, my wife and I had a discussion about whether or not socially-conscious consumers should shop at Walmart. It was an interesting discussion because Walmart has earned a bad reputation over several years, but has recently been correcting their policies and have started many far-reaching initiatives for positive change.
To me, the question of whether to shop at Walmart can be rephrased to this:
Should we reward companies for the positive changes they are making now, or should we punish them for their past deeds?
I think that corporations learn the same way that people do, so we should treat corporations the same way that good parents treat their children: we should punish them justly, reward them swiftly, and never hold a grudge. While it may feel justified to hold a grudge, it can impede the positive change that drives social progress. Acting like a good parent gives them immediate feedback and encourages positive changes in their behaviour.
To help you decide for yourself, I’ve summarized some of Walmart’s criticisms and current initiatives with information from here and here. To be clear, I am not saying that you should shop at Walmart; I am simply arguing that if you want to foster change then you should judge corporations (and people!) based on their present actions and not their past (provided their past isn’t too gruesome!).
Criticisms:
- As a large company, they drive local “mom and pop” stores out of business with lower prices through economies of scale and loss-leaders.
- They are very profitable but they pay most employees near-minimum wages while paying executives very high salaries
- They have poor working conditions and offer poor health care for many employees
- They use their influence to put pressure on their suppliers, causing the suppression of wages throughout the economy
Recent initiatives:
- They have committed $500 million per year to environmental initiatives such as:
- Double the fuel efficiency of their shipping fleet within 10 years
- Reduce their greenhouse gas emissions by 20% in 7 years
- Reduce their energy use by 30% and solid waste by 25% in 3 years
- They designed and built three experimental “green” stores
- They’ve set a goal of being a “good steward for the environment” with an ultimate goal of using only renewable energy and producing zero waste.
- They announced profit-sharing initiatives, 401k contributions, and stock purchasing program contributions for their employees
- They’ve announced plans to develop a worldwide sustainable product index, which would provide transparency for socially-conscious consumers — similar to how nutrition labels have brought transparency for health-conscious consumers.
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I agree to the extent that it’s important to reward good behaviour and to not be so cynical that you’re blind to any good deeds because you’re fixated on the bad. I don’t think that Walmart going green excuses any of their other transgressions but it is important nonetheless. The challenge I face is how to reward Walmart or any other corporation for the good things they do without seemingly condoning the bad?
It’s a good point, and I think there are a few options. You can consume only their products or services that are directly associated with the good initiatives; for instance, buying only their eco-branded products. Another way is to talk about it on the internet – on blogs like this one. Discussing it privately doesn`t tell corporations anything, but public discussions on blogs, online forums, and twitter do get picked up (eventually) and it can feed into their market research and corporate decision making.
There’s an interesting article in the NYT about this:
http://www.nytimes.com/2009/12/06/opinion/06diamond.html?pagewanted=1&hp
Thanks for the link Shreyas, it’s a great article. I think I’ll repost it.