Weekend Ramblings: Big Business

>> Sunday, June 28, 2009

Sometimes on the weekends, I will be rambling about thoughts I've been having that week. Feel free to comment, add to my thoughts, or disagree with anything I say. But please remember that I don't like being called an idiot, even if I'm being one. So keep your comments respectful.

My husband and I have an ongoing argument about whether or not an environmentally or socially responsible company should get big. My feeling is that when a company gets too big, it loses sight of its original goals and values. And when there's too big of a gap between the people at the top and those at the bottom, the people at the top care less about how their actions affect those at the bottom.

I sometimes talk about "evil companies," which annoys my husband. He argues that businesses either have to get big or die, though frequently that involves selling out to a larger company that might not share its values. I say, Why can't they just get big enough? He says that's not the way our economy works. Etc., etc., etc. We've had this conversation a dozen times.

Some examples of companies that frequently enter into our discussion: Burt's Bees sold out to Clorox. Tom's of Maine is owned by Colgate. Dagoba Chocolate is owned by Hershey. Chipotle sold out to McDonalds. Ben & Jerry's is part of Unilever. I could go on...

I've been thinking about this topic this week for a couple of reasons. One is because I was writing about saving money on organics, and unfortunately, I think one of the ways we will see price drops in organic foods is when big business really gets involved. Namely, Walmart. And as much as I'd like to see cheaper organics, that thought still makes me sad.

But the other reason I've been thinking about this topic is because I've read a few related quotes this week by big name environmentalists who surprisingly seem to side more with my husband than me. For example...

From Josh Dorfman, the Lazy Environmentalist:

As we transform our economy—which I really believe is what we have to do—into sustainability, I just think that these large corporations are going to be part of that change. They have to be. Some of them will go out of business, but most of them are going to be here and they have to transform. These are the steps corporations have to take to transform and sometimes it’s hard for us as environmentalists to operate in this gray area. We want to see the world in terms of good guys and bad guys, black and white, and that’s not a luxury that we have if we’re really serious about creating change that’s going to make a real difference.
From Jeffrey Hollander of Seventh Generation, on whether or not they will do business with Walmart now that he's stepped down as CEO:
[Up] until a year ago while we were in a very close dialogue with Wal-Mart and working to help them become a more sustainable and responsible business, we were not comfortable selling to them. But the progress that Wal-Mart has made in the past three to four years is astounding and absolutely an incredible inspiration for what’s possible of a large company. Does that mean they’re perfect today? No, but they have made more progress than just about any company that I can think of and that progress has led us to experiment with them in a small group of stores....

I don’t believe that we can solve the urgent problems that face us—whether it’s global warming, or whether it’s a crisis of fresh water or species disappearance—without aggressive leadership from the business community. Part of the role that Seventh Generation wants to play is showing business that being responsible is good business and being sustainable is good business, and that we can’t afford to have business stand in the way of the progress we need to make to become more sustainable.
From William McDonough, respected architect, designer, and author of Cradle to Cradle:
[Just] as industrialists, engineers, designers, and developers of the past did not intend to bring about such devastating effects, those who perpetuate these paradigms today surely do not intend to damage the world. The waste, pollution, crude products, and other negative effects that we have described are not the result of corporations doing something morally wrong. They are the consequence of outdated and unintelligent design.
And also from William McDonough:
"How can you work with them?" we are often asked, regarding our willingness to work with every sector of the economy, including big corporations. To which we sometimes reply, "How can you not work with them?"...

Eco-effectiveness sees commerce as the engine of change, and honors its need to function quickly and productively. But it also recognizes that if commerce shuns environmental, social, and cultural concerns, it will produce a large-scale tragedy of the commons, destroying valuable natural and human resources for generations to come. Eco-effectiveness celebrates commerce and the commonweal in which it is rooted.
Where do your opinons lie in this argument? Are big business and environmentalism at opposite ends of the spectrum? Or can they work together toward a sustainable future?


Anonymous,  June 29, 2009 at 11:11 AM  

I think saying you are not going to work with big business is about the same as saying you are not going to work with Mexicans or any other group.

Sustainability must be adopted by the majority of the worlds population or it will not happen. Talking and working with everyone will further the cause and open new dialogs that will lead to new ideas.

Naturally small business will be able to move faster than big business. Burt's bees mindset might be diluted by Clorox but Burt's was a small company. A much larger effect will come to Clorox as they learn how to charge more money for sustainable products and improve their business by becoming a better company.

This change of mindset will have a huge effect. In the past companies like Clorox only thought to make it cheaper using the least expensive ingredients that work. Right now I expect their formulators and production chemists are working hard to learn how to scale up production with a whole new set of ingredients and processes.

Frank Ladd

Erin aka Conscious Shopper June 29, 2009 at 9:29 PM  

@Frank - The problem I've seen is that some companies lose their integrity or values when they're absorbed by a larger company. For instance, Silk Soymilk was originally made with only organic soybeans. After Dean Foods took it over, they stopped using organic soybeans but kept the same packaging and price (simply removing the word "organic") so that people were paying more for an inferior product and may not have even noticed the change. Then after awhile, Dean Foods created a new product - Silk Organic Soymilk - in a new package with a higher price.

Another problem I have with big business is that it's hard to maintain the same level of sustainability on a large scale. So you end up with companies like Horizon Organics, the biggest brand of organic dairy in the U.S., which actually uses CAFOs (confined animal feed lots, aka factory farms).

I fear that as more big businesses go green, we'll see even more diluted standards - meeting minimal rules or expectations but missing the overall point of sustainability and fairness. If Walmart expands their organic product line, will they be grown and packaged by mistreated workers in other countries? Will Walmart's low prices force more organic small farmers out of business because only large scale farmers can meet their price demands?

But on the other hand, I don't think there will be broad enough changes until big business gets involved, so I don't know what the answer is. I'm hoping companies like Burts Bees and Seventh Generation can prove that it's possible to maintain a high standard while making a profit.

Michael June 30, 2009 at 10:19 AM  

Husband here, defending and clarifying his position:

It's not that I don't think there are evil corporations (or rather corporations that do evil things since a corporation is just a legal entity the evil is really being done by people). Rather I think that if a small company gets successful they can hit a ceiling.

If all they want to do is be a niche company selling to niche consumers (aka, active environmentalists) then they've reached their goal. But if their goal is change the world or help more people make sustainable choices then they will eventually need to start selling to Walmart or sometimes become part of a larger organization that has more reach. Otherwise they can't help as many people.

And yes, larger organizations aren't as nice to work for (I really, really like working for a small company). And yes small company ideals can get lost when absorbed by a larger company. But I think the net gain is worth it sometimes. Which has more impact? A small company with great ideals or a really big company that just improved it's impact? There's not a clear cut answer and a lot of it depends on the who/how/what of the deals, but I usually give them the benefit of the doubt that it's a net benefit until I see otherwise.

Anonymous,  June 30, 2009 at 8:42 PM  

Still I think a diluted idea at Clorox might affect more consumers and have more effect on the environment than the true ideal of the idea at Burt's bees for example.

I certainly expect the ideas to get diluted upon absorption, but the ideas do go into practice on a greater scale.

If everyone ate a little less meat for example it would have a far greater effect than if the number of vegatarians doubled.

Frank Ladd

Erin aka Conscious Shopper July 1, 2009 at 8:20 PM  

Frank - You make a good point about eating less meat vs. more vegetarians.

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