The New “Doing Good”

Illustration by Emily Callison, CC'18

Illustration by Emily Callison, CC’18

I am young – I do not remember a time when going green was not vogue. Climate change concerns have steered social and economic activism to push for environmental stewardship, especially from companies. Green, however, is not the only color of sustainability, which is why the term is hard to pin down and hard to put into practice. Ask corporate sustainability officers and they will tell you that women in management and CEO succession policies matter just as much as a company’s carbon footprint when it comes to sustainability. Hiring locally also plays a part—but donating to local 5k runs is considered something else: philanthropy. To make the term “sustainability” even more vague and confusing, the idea has changed semantics over time – what used to be called “corporate social responsibility” has been folded under the one s-word umbrella thanks to this redirection of activist focus. Nowadays, it seems that being sustainable just stands for “being good.”

Such ambiguity actually works against activists pushing for change. When was the last time asking companies to “just be good” led to satisfying results? In order for companies to meet society’s demands, they have to break big ideas like sustainability down into parts that can be addressed with specific company policies. Companies would also like to have hard evidence of sustainability success, so that they can convince the skeptical “millennial” generation not to feel guilty buying from them. Activists, lawyers, politicians, consultants, and corporate leaders have been working hard over the last decade to establish guidelines and metrics for sustainability. Compared to ten years ago, companies now know much better what “being good” means and how important it is to their financial performance.

Fighting for companies to care about something besides financial return only started to resemble the modern push for sustainability in the 1960s to 1970s. Rewinding to the 1880s to 1940s, we find much dirtier and much less restrained industrial giants, like the ones grimly portrayed by Upton Sinclair in The Jungle. At that time, most activism occurred through unions fighting for workers’ rights. Large national groups with glorious names, like The Knights of Labor, the American Federation of Labor, and Industrial Workers of the World, for the most part ignored environmental damage and corporate corruption in order to focus on achieving shorter working days, a livable minimum wage, and compensation for work-related injuries. While their aim was narrower than today’s sustainability activists, they also protested more vigorously: there were 1,695 work stoppages in 1933 alone, ranging from strikes to hunger marches. Such focus and economically significant protests yielded great results.

In 1938, Congress passed the Fair Labor Standards Act. Not only did this act give a national minimum wage, it also shortened the working week from 70 – 110 hours to 40 hours a week, as well as prohibited child labor. Alas, these hard fought successes only showed how hard corporations and their owners fought what we now consider social justice. Companies were not so much meeting society’s demand of “doing good” as they were forced to acknowledge the power of unions and to comply with government regulations.

"Child laborer" by Lewis W. Hine for the National Child Labor Committee - This image is available from the United States Library of Congress's Prints and Photographs division under the digital ID nclc.01451.This tag does not indicate the copyright status of the attached work. A normal copyright tag is still required. See Commons:Licensing for more information.العربية | čeština | Deutsch | English | español | فارسی | suomi | français | magyar | italiano | македонски | മലയാളം | Nederlands | polski | português | русский | slovenčina | slovenščina | Türkçe | 中文 | 中文(简体)‎ | 中文(繁體)‎ | +/−This is a retouched picture, which means that it has been digitally altered from its original version. Modifications: most visible dustspots and scratches removal. Modifications made by Jklamo.Azərbaycanca | Беларуская (тарашкевіца)‎ | বাংলা | Català | Čeština | Dansk | Deutsch | Zazaki | English | Esperanto | Español | Eesti | فارسی | Suomi | Français | Galego | עברית | Hrvatski | Magyar | Հայերեն | Italiano | Bahasa Indonesia | 日本語 | ქართული | ភាសាខ្មែរ | 한국어 | Kurdî | Македонски | മലയാളം | Bahasa Melayu | Plattdüütsch | Nederlands | Polski | Português | Română | Русский | Slovenščina | Српски / srpski | Svenska | ไทย | Türkçe | Українська | Vèneto | 中文 | 中文(简体)‎ | 中文(繁體)‎ | 中文(台灣)‎ | +/−. Licensed under Public domain via Wikimedia Commons - http://commons.wikimedia.org/wiki/File:Child_laborer.jpg#mediaviewer/File:Child_laborer.jpg

“Child laborer” by Lewis W. Hine for the National Child Labor Committee

As evidence that their hearts had not changed, business owners eagerly supported Milton Friedman’s 1970 article in the New York Times, titled with the claim that “The Social Responsibility of Business is to Increase its Profits.” Friedman’s claim was likely in response to the 1960’s social justice movement, which resembled much more like today’s sustainability activism in that it started focusing on more than just labor rights. People began recognizing pollution as a problem, for instance. Then, like now, activists fought companies to overcome this single bottom line interpretation of a company’s responsibility. The right interpretation of corporate responsibility could lead to even better labor practices than what the law allows, seeing as how political lobbying gradually erodes the power of regulations over time. One effective way of fighting lobbying is to change the very minds of those who lobby, so that they do not butt heads with social justice. While progress has been made, the fight is not finished: today’s exportation of sweatshop factories to China and other developing countries, for example, are legacies of corporate leaders who only perform social justice only where it is enforced.

Ironically, the ones that were most successful in pushing corporations away from short-term profits were the largest shareholders themselves. In the 1970s, international attention on South African apartheid resulted in divestment from United States businesses participating in the socially corrupt system overseas. An infinitely small but growing percentage of wealthy investors decided to stop supporting firms that they found socially irresponsible. Institutional investors, who manage the money of millions of United States citizens and direct trillions of dollars in investments, started offering alternatives to their usual service of just maximizing return. They started to pre-screen their portfolio based on the Sullivan Principles, a code of socially responsible conduct for corporations created not by the government but voluntarily by Reverend Leon Sullivan, a board director of General Motors.

General Motors was the largest employer of black South Africans during that time, so his activism influenced the entire business community involved in the apartheid. Sullivan demanded his company, both with his money and with his board director position, and his company’s peers to disobey South African apartheid laws by desegregating their workplace. His principles were formally adopted by over 125 U.S. corporations in South Africa. The U.S. government quickly threw their support behind such principles, and in the 1980s began removing financial support from those U.S. firms that contributed to the apartheid. Unlike with the domestic labor law reforms in the 1930s, passing laws that could control the actions of multinational corporations abroad was out of the question. Instead, companies were forced to consider social justice due to financial concerns—and it worked. Once the money stopped flowing, many more U.S. firms shuttered or rebelled against the South African government.

Boycott_-_Contaminated_with_apartheid_-_South_African_goods

Investing ethically was, of course, not a new idea by the 1970s, only one with few practitioners. The success of the Sullivan Principles in curbing civil rights abuse in South Africa allowed the fringe idea to enter the minds of millions of Americans who had pension plans. If Sullivan could almost single-handedly pressure the business community to act against Milton Friedman’s bottom line fixation, so too could the life savings of thousands of concerned rising middle-class citizens when properly invested (or divested). More importantly, citizens choose to support or not support companies every day with their buying choices, and widespread realization of the consumer’s power, primarily the power of the growing middle class, dawned on activists more so in the 1970s than ever before.

The movement to divest from socially harmful companies only grew with rising concerns of multinationals offshoring American jobs to cheaper labor pools in developing countries. Keeping jobs in America not only meant that the company did not support human rights violations in Chinese factories but also meant that they supported American families, a win-win. Several additional trends added to the push for socially responsible investment: OPEC embargos of the 1970s led to two energy crises, and growing global media allowed the public to observe the politically ungovernable but devastating actions taken by multinationals pursuing shareholder profit alone. It is no coincidence that the “global citizen” idea grew popular at the same time as multinationals grew evil in the eyes of the media. The South African apartheid taught the new generation of activists that rallying consumer and investment support was more effective than rallying political support when it came to corporate policies.

In the action-packed social justice battles of the 20th century, climate change concerns came near the end as a cliff-hanger that continues to play out today. It is the newest edition to the idea of corporate social responsibility, and environmental stewardship brought with it new vocabulary for renaming old ideas and reenergizing the drive for social justice. The Sullivan Principles developed into our present day Environmental, Social, and Governance (ESG) principles. The term “triple bottom line,” which refers to businesses having responsibility to people, planet, and profit, was not popularly used until 1994 when John Elkington coined the term, but the idea was not new to those who had been fighting against Friedman’s narrow-minded philosophy since 1970. Because climate change has effectively placed a deadline on life as we know it, activism became feverish in an attempt to make changes before it is too late. Companies must be pushed to act, and fast. The world does not have much time to spare from fighting business lobbying against regulation as it did with the fair labor laws, and so activists must depend on their economic influence more than before. Huge media focus on the issue helps, and smarter consumers who make smarter investment and consumption decisions helps even more.

The millennial generation in particular places large emphasis on “green” because we grew up in the decades in which green usurped public attention. Yet in our demand for higher energy efficiency and lower carbon emissions from brands we consume, we have to remember that working conditions, human rights concerns, and other causes fought for in the past were not dropped from media spotlight because they were entirely resolved; rather, a more pressing and time sensitive issue emerged. They are still issues today, and to recognize their importance is to recognize all colors of sustainability, not just green.

Comments

  1. Columbian says

    An interesting take on a hot issue! My question is what it implies for Columbia as a both a corporation of sorts as well as an institution that is supposed to be guiding the next generation of leaders. How does this related to the divestment movement?

Leave a Reply

Your email address will not be published. Required fields are marked *