A Moral Compass Made of Money
15 Oct, 2013
Sustainability is all the rage. At long last, citizens are insisting on a moral standard for the products they consume and the services they use. We’ve seen the light and have been transformed into good Samaritans. So naturally, corporations should cross over too. However, in the land of egregious exploitation and economic enterprises – more commonly referred to as the corporate world – the ultimate goal of corporations is profit-maximization. Ruthless business leaders will stop at nothing to accumulate endless piles of dollar bills.
Nonetheless, demand drives profits. Corporations must therefore satisfy every whim of the modern-day consumer to achieve their aim. Hence the emergence of Corporate Social Responsibility (CSR), a phenomenon that supposedly imparts upon corporations a moral conscience. CSR can encompass a myriad of initiatives such as equity in wages, reduced carbon footprints, fair trade products, and philanthropic actions.
With the notion of social responsibility gaining steam among corporations, firms have been obliged to jump on the bandwagon—ever the fuel-efficient choice—or else go home (quite often to their multi-million dollar mansions). And so began the infiltration of CSR, slowly extending its tenacious grip on everything in the realm of corporate capitalism, from baby enterprises to Wall Street giants.
CSR has since become a tool leveraged by corporations to rake in the dough. Is this a bad thing? Not always. In fact, it has at times led to creative innovation. Five years ago, a man by the name of Tyler Elm was hired at Canadian Tire by pointing out that the company could profit from being environmentally friendly–simply reducing excessive packaging could decrease Canadian Tire’s waste while simultaneously lowering shipping costs. Today, he’s the Vice-President of Corporate Strategy and Business Sustainability.
Elm’s proposal led to a 15 percent cost reduction in Canadian Tire’s shipments. You can bet your bottom dollar this idea would not have been endorsed if cost savings were not part of the package. This leads us to the question, has CSR converted greedy corporations into beacons of morality? Quite the contrary.
Take IKEA as an example. Similar to the layout of their stores, IKEA’s sustainability strategies are a meandering labyrinth full of false hope and manipulative schemes, intended to render an innocent soul disoriented and more prone to buying on impulse. In the past, IKEA has blatantly exploited child labourers in China in order to produce cheap products quickly. On the other hand, the company markets itself as an ethical company, promoting its “triple bottom line” approach by funding social projects in developing nations. Shall we ignore the injustices of child labour due to IKEA’s charitable contributions? IKEA’s image of sustainability is as confusing and contradictory as their instruction manuals.
As IKEA has illustrated, the concept of the ‘triple bottom line’ – environmental, social, and economic impact – is too often used as a marketing ploy. The sole bottom line is economic: profit. The other not-so-bottom lines are means to an end, used to increase profits. By creating an illusion of morally sound and green practises, CSR has been reduced to a branding strategy, (ab)used by many corporations to maximize their revenues.
However, can we blame corporations for employing these strategies? Companies are motivated by money. It is therefore logical to link profitability with sustainability. Perhaps it’s our job, as consumers, to insist that the corporate world dons a white hat. We’ve pushed for CSR, but it’s faulty, at best. We still live behind this veil of ignorance, a veil fabricated by corporations and marketers. With each product we buy, we are making a conscious choice and perpetuating the cycle of unethical behaviour. We, too, are guilty. Forget CSR, perhaps Individual Social Responsibility or ISR should exist. Ethical behaviour should be embedded in humanity, not an afterthought added to a corporation in the form of a CSR department.
This notion is not limited to the inner workings of the business world. It is seen within the very walls of the McGill community. In the Desautels Faculty of Management, Social Context of Business is a mandatory course for the suited-up students of McGill, a class that sheds light on the unethical practices of businesses. But even the existence of such a course reflects a significant flaw in the curriculum. If CSR is of the utmost importance, shouldn’t all of McGill’s Management courses emphasize sustainability as a core goal, instead of merely profit-maximization?
As student consumers, we are settling for less. We are taught to be critical thinkers and agents of change. However, we fail to question the blatantly erroneous facts due to our ignorance, or perhaps our mere apathy. With our daily dosage of Apple products, it’s all too easy to hide behind our MacBook Pros and iPhones, without realizing that the injustice is glaring us right in the face. The revered brainchild of the late Steve Jobs, Apple, explicitly prohibits violations to the basic human rights of its workers, stating they should be treated with both “dignity and respect.” Yet, Apple’s labourers in China are still slaving away in inhumane conditions, with work often stretching to fourteen hours a day.
Whether it’s through unabashed lies or creative scheming, corporations lack sincerity in their actions. The illusions need to end. Companies will continue to inflict their semblance of corporate virtue onto us under the pretence of moral action. As consumers, we hold the key to action. So the real question is what are we going to do about it?
The views expressed in this opinion piece are the author’s own and do not necessarily represent those of The Bull & Bear.