The Business Ethics Blog

Apple has faced a bit of criticism over its environmental record of late. In particular, GreenPeace recently launched this website, a parody of Apple’s own website. The parody site proclaims the campaigners’ affection for Apple, along with an ardent desire that the computer company clean up its act, environmentally speaking:

We love Apple. Apple knows more about “clean” design than anybody, right? So why do Macs, iPods, iBooks and the rest of their product range contain hazardous substances that other companies have abandoned? A cutting edge company shouldn’t be cutting lives short by exposing children in China and India to dangerous chemicals. That’s why we Apple fans need to demand a new, cool product: a greener Apple.

The webpage follows up on an earlier GreenPeace report, their Guide to Greener Electronics. That report “…ranks leading mobile and PC manufacturers on their global policies and practice on eliminating harmful chemicals and on taking responsibility for their products once they are discarded by consumers.” It says that, from an environmental point of view, Apple ranks near the bottom of the pack: just ahead of Lenovo, Motorola, and Acer, but well behind companies like Dell, Nokia, Sony Ericsson and Samsung. Why does apple score so badly? According to the report,

Apple scores badly on almost all criteria. The company fails to embrace the precautionary principle, withholds its full list of regulated substances and provides no timelines for eliminating toxic polyvinyl chloride (PVC) and no commitment to phasing out all uses of brominated flame retardants (BFRs). Apple performs poorly on product take back and recycling, with the exception of reporting on the amounts of its electronic waste recycled.

Apple, for its part, has the following to say, on its Apple and the Environment page:

Environmental protection is a priority for the conservation of precious natural resources and the continued health of our planet. Apple recognizes its responsibility as a global citizen and is continually striving to reduce the environmental impact of the work we do and the products we create.

So, how do we make sense of this?
Well, one possibility is that GreenPeace’s assessment of Apple is fair & accurate. Even folks who are fans of Apple’s products (and frankly I’m one of them) should acknowledge that it’s at least possible for a company that produces beautiful, efficient technology to do so in a way that’s not as environmentally-friendly as it could be. Naivete about this would be pretty sad, even childish.

On the other hand, we shouldn’t take the rating handed out by an activist group — even a well-established one like GreenPeace — at face value. In particular, we need to look at the criteria GreenPeace uses in arriving at its ranking. In particular, it’s worth noting that according to the GreenPeace report, “Companies are ranked solely on information that is publicly available.” This, of course, is not uncommon among rankings. Companies are not always cooperative, so researchers and activists interested in evaluating & ranking companies often have no choice but to rely on whatever info is available on corporate websites, in Annual Reports, in SEC filings, etc.
But note the particular result this focus on public sources has for the GreenPeace report: some companies get slammed for not (publicly) providing a time-line for phasing out certain chemicals or for failing to mention the Precautionary Principle, while others get credit for using the right definition of the Precautionary Principle (there are several competing definitions, by the way), or for “explicitly supporting” edgy environmental concepts such as “Individual Producer Responsibility.” So, the report shows evidence of little (if any) effort to measure actual environmental performance. Should this critcism of the GreenPeace report reassure us about Apple’s commitment to the environment? Not entirely. The aspirations and promises that appear on a corporate website do matter. Companies that stick their neck out by promising to reduce pollution, committing to changing production methods, etc., deserve credit for saying something that they eventually be held to. It’ll be interesting to see whether GreenPeace’s criticisms spur Apple to stick its own neck out a little more. Which, of course, was the whole point right?

(Thanks to blogger & Apple fan Daniel Eran for pointing out the significance of the “publicly available” bit.) (And thanks to former student Nicole for the story idea.)

A number of blogs have taken note of this report on Genetic Testing of Embryos.

One of the more striking findings of the study has to do with one particular use of Preimplantation Genetic Diagnosis (PGD), namely to ensure that the child that (eventually, probably) results from the process is deaf. According to the report…

Some prospective parents have sought PGD to select an embryo for the presence of a particular disease or disability, such as deafness, in order that the child would share that characteristic with the parents. Three percent of IVF-PGD clinics report having provided PGD to couples who seek to use PGD in this manner.

Yes, that’s right: a certain percentage of deaf individuals value their deafness, value their participation in what they refer to as “deaf culture,” and want to raise a child in that culture. Doing so, of course, requires that the child be deaf.

OK, so most commentators are going to ask “is it OK for parents to try to ensure that their child is born with a disability?” Here’s a quick summary of the debate:

On the “con” side:

• Deafness is, from most people’s point of view, a disability. Children born deaf face obstacles and dangers not faced by children with “normal” hearing. Parents should be trying to improve their children’s lots in lives, not impoverish them.

On the “pro side:”

• Not everyone thinks of deafness as a disability.
• It’s up to parents to decide — within very broad boundaries — what’s best for their kids.
• A kid born deaf due to PDG cannot be regarded as having been harmed by their parent’s choice, because had they (back when they were an embryo) NOT been selected, “they” would never have been born.

OK, so that’s the standard debate.
But this isn’t a generic ethics blog…this is the Business Ethics Blog. From the point of view of business ethics, this isn’t (strictly) about the choices parents make, but about the products and services that private fertility clinics (i.e., businesses) choose to make available. What difference does the commercial aspect make?

Some will say it makes the whole thing worse. After all, it’s one thing for parents to choose what they think best for their kid (even if some of us disagree with that choice); but it’s another thing for some company to profit from churning out kids with disabilities.
Others will say that the commercial aspect makes this all easier. It’s “merely” a commercial transaction. The clinic, as a mere commercial entity, can’t be (much) responsible, because after all, the consumer is king. If the consumer wants deaf babies, the consumer gets deaf babies.

So, from a business ethics point of view, are deaf embryos/babies any different (at a sufficiently high level of abstraction, of course) from other socially controversial products and services? Such as:

• rap music;
• pornography;
• guns;
• SUV’s
• fur coats;
• etc.

In each of these cases, businesses are making money off of something that at least some people think shouldn’t be sold at all, but that other people are willing to defend (and, indeed, purchase).

Is the fact that there’s social disagreement enough to imply that businesses shouldn’t be selling these products? (i.e., should businesses avoid selling anything controversial?) Or does the specific nature of the worry about a given product matter? For porn, the worry has to do with the objectification of women. For guns, it’s increased violence. For SUV’s, its…well, a whole list of worries. And for deaf embryos, the worry is likely a combination of a) concern for the quality of life of the child that results, and b) the “commodification” of babies/reproduction/life in general.

Probably no one thinks that any controversy immediately implies that you shouldn’t sell your product. There are an awful lot of products — including some I’m quite fond of — that are going to be opposed by someone. So, the key question seems to be, what extra obligations (if any) does a well-intentioned company undertake if they decide to market a product or service that is relatively deeply socially divisive?

[Thanks to Rebel Sell for lobbing the hot potato my way.]

Food isn’t as simple as it used to be. Once upon a time, a bottle with a picture of an apple on it was pretty likely to contain apple juice…you know, the juice of an apple. A real apple. One of those things that grows on trees. These days, the bottle might contain apple juice, or mostly apple juice, or apple-flavoured synthetic apple beverage. Plus, once upon a time, people (supposedly) knew which foods were (supposedly) good for them, because products were simple. Apples were apples. Beef was beef. Butter was butter. Now, apples can be genetically modified, beef can be mechanically separated, and butter-like products may-or-may-not contain partially hydrogenated vegetable oil. Modern food labelling seeks to help consumers navigate these murky waters. Just how effective is it?
Here’s the story from Reuters: Americans puzzled by food labels

Most Americans read food labels to help them decide what to buy but few people actually understand what they’re reading or consuming, according to two U.S. studies published on Tuesday.

What sort of information confuses consumers?

Overall, patients correctly answered 69 percent of the questions, but they had problems understanding serving sizes and extraneous information and completing simple calculations.
For instance, only 32 percent of patients could correctly calculate the amount of carbohydrates in a 20-ounce bottle of soda that had 2.5 servings in the bottle, and only 23 percent could determine the amount of net carbohydrates in a serving of low-carbohydrate spaghetti.

This is pretty bad. On one hand, it speaks to the functional illiteracy (and innumeracy) of a significant portion of the American (and, I’m guessing, Canadian) population. But it also means that a significant number of consumers just aren’t benefiting from the additional information that food packagers are required to provide. Think about what this means beyond food labels: the results of these studies probably also imply that roughly the same percentages of people aren’t understanding the specs for their cars (or their car loans), mortgage documents, safety instructions on power tools, etc. If autonomous choice requires full information, so much for consumer autonomy.

Roughly, this implies 3 options:

1) Work hard at improving literacy rates, especially when it comes to reading consumer labels. (Just whose responsibility is that, anyway?)
2) Give up on labels. (“They don’t work, so why bother?”)
3) Shrug our shoulders and say, “No system is perfect. Some understanding is better than none.”

Discuss!

Footnote:
In an article forthcoming in the Journal of Business Ethics, Melissa Whellams and I argue that there’s no ethical obligation for corporations to label Genetically Modified foods. (You can read the abstract here.) One of the things we point out (and we’re not the first to say this) is that simply providing labels doesn’t necessarily mean that people will then be able to make good choices about what they eat. If people don’t understand what a calorie or a gram of carbohydrate means, how on earth are they going to understand what it means when the label says “This product may contain Genetically Modified ingredients”? If the GM food issue interests you, go back to the list of options above, and go through them again….

[update: A loyal blog reader tells me that Oprah Winfrey recently dedicated a show to reading food labels. Given that she’s got something like 10 million viewers each week, that’s a pretty significant contribution.]

Working Mother magazine has put together their 21st annual list of the 100 Best Companies (which they also refer to as the most “family-friendly” companies in America).

Programs we could only imagine a few years ago—16 months of maternity leave, free backup care, phase-back programs, $10,000 in adoption reimbursement—are now a reality at many of our Working Mother 100 Best Companies. In selecting this year’s winners, we gave special weight to leave policies, because it’s critical for a mother to be able to stay home as long as possible with her newborn without suffering professionally.

WM lists their top 100 in alphabetical order, so I can’t tell you who topped the list. Among the welll-known companies included, however, are Aflac, Allstate, American Express, and Avon. There are also a few surprises (i.e., companies that have overall various kinds of image / social responsibility problems) such as Dow Corning, Ford, GlaxoSmithKline, and Microsoft.

What is the WM list based on? There isn’t a lot of specific information, but according to WM’s Methodology page:

Seven areas are measured and scored: workforce profile, compensation, child care, flexibility, time off and leaves, family-friendly programs and company culture.

Helpfully, the list also provides access to extra information about just what makes each company a good place for working moms.

Interestingly, BusinessWeek leaves out the whole “mom” angle, and entitles their version of the story List of 100 top places for women to work (so, is that women generally? Are they trying to keep the headline short, or just assuming that all women are current-or-potential moms?)

(Thanks to Feministing for the story.)

I can see it now, the smoke coming out of the ears of the most strident anti-corporate critics, as they try to make sense of this one.

Wal-Mart is an evil, low-paying, mom-and-pop-store killing, culture-dumbing, hegemonic corporate monster, right?

And drug companies are money-hungry giants that care more about their profits than they do about the health, well-being, & financial status of their customers, right?

So…what are we supposed to think when evil Wal-Mart takes on the evil Drug Companies?

Here’s the story, courtesy of the Detroit Free Press: Wal-Mart to Cut Prices for Generic Drugs

Wal-Mart, the world’s largest retailer, plans to slash the prices of almost 300 generic prescription drugs, offering a big lure for bargain-seeking customers and presenting a challenge to competing pharmacy chains and makers of generic drugs.
The drugs will be sold for as little as $4 for a month’s supply and include some of the most commonly prescribed medicines….

Now, Wal-Mart claims that it sees the drug companies as “partners” in this endeavour.

…Wal-Mart is working with the 30 participating drug companies to help them be more efficient. “We are working with them as partners. We are not pressuring them to reduce prices….”

Uh-huh. I’ve blogged before about the love-hate relationship that many suppliers have with Wal-Mart. The point is, Wal-Mart is here (again) using its economic might and savvy supply-chain management techniques in a way that is genuinely beneficial…not to shareholders of pharma companies, but to the working-class folks who make up the bulk of their customer base. Now, I have nothing against the shareholders of pharma companies, nor do I begrudge them their stock dividends. The point is that a paradigm-bending company like Wal-Mart shifts benefits around within an economy. Wal-Mart makes some people better off, and others worse off. Should you be a fan of Wal-Mart? That depends on some combination of a) whether you think Wal-Mart’s net impact is positive, and b) whether you think the harms and benefits of Wal-Mart are appropriately distributed.

Hmmm….so, first Wal-Mart goes organic, and now they’re trying to do something the U.S. government has been unable to do, namely get pharmaceuticals into the hands of people who really need them, at a reasonable price. What next? It looks like it’s going to get harder and harder to find reasons to hate the Beast of Bentonville.

Here’s an ethical issue that doesn’t make it into a lot of textbooks: what names are ethically permissible for your product? A beverage company has decided to name its “energy drink” after a dangerous drug. Here’s the story: ‘Cocaine’ drink claims to be real thing

Its maker claims the title is “a bit of fun” but critics slammed the technique as a cynical ploy which could tempt young people into using drugs.
The drink’s inventor, Jamie Kirby, said: “It’s an energy drink, and it’s a fun name. As soon as people look at the can, they smile.”
He claims Cocaine is “350 percent stronger than Red Bull” but that people do not experience the “sugar crash” or jitters that he says some of the other energy drinks can produce.

Here, again, is one of those stories that makes my vision go all grey.
Are young people really likely to use an energy drink as a “gateway drug”? That’s hard to believe. (“Say, it’s so great in a can, maybe I should try freebasing!”)
On the other hand, is promoting a product that could even conceivably lead anyone to attribute a remotely positive connotation to the term “cocaine” an admirable business strategy? Don’t think so. Is it 100% cool to market a drink named after a drug that has ruined millions of lives? Probably not. In fact, it probably means you’re the kind of person who thinks that “hey, as long as it’s legal, and as long as no one is being directly harmed (probably), then it’s a great way to make a living.”

As a frame of reference, are there other products that have dubious names? I suppose Iceland’s Black Death schnapps might be a contender. Though (given that the real Black Death — i.e., the Black Plague — is a few hundred years past), I think the Icelanders are just showing a sense of humour regarding what is, by most accounts I’ve read, a horrible-tasting beverage. See also Bong Water (a carbonated citrus drink made by Real Things Distributing), and Pimp Juice. (Sort of a pattern, there, with the energy drinks…) Then there was also Ice-T’s (in)famous rap tune, “Cop Killer” (1992), though I guess the issue there wasn’t so much the name of the song as its content. There was also Porn Star clothing.

Of course, Cocaine (the energy drink) is aimed at a young audience…generally, that’s who energy drinks are aimed at (which is odd, when you think about how much energy young folks have compared to older folks. Anyway…) So, the fact that Cocaine (the energy drink) is aimed at a younger audience is part of the problem. When you market to kids, you bear extra responsibilities. And notice that almost all of the products with controversial names (at least, the ones I can think of) are aimed at youth. (Picture it: “Whoah! If I wear a t-shirt that says Cocaine on it, that’ll really piss off mom & dad!”)

Where does that leave us? I don’t know. I suppose as long as there are rebellious teenagers, there will be someone who wants to make money off them by giving their product a naughty name. Business students ought to be encouraged to ask themselves this: do you really want to look back on your career, and say that your biggest achievement was introducing Crack Whore(TM) lip gloss to the world?

Relevant Links:
Cocaine energy drink’s website
Cocaine & Crack info from the National Institute on Drug Abuse

So, thrill-seeking billionaire Richard Branson has decided to donate a huge chunk of money (over the next 10 years) to fight climate change.
Here’s the story, from Forbes: Branson’s $3 Billion Donation

…Branson announced that he’ll hand over all profits from his airline and train business to research and develop renewable-energy initiatives. What’s that mean? Branson estimates he’ll end up donating $3 billion over ten years.

Accoding to the BBC,

The funds will be invested in schemes to develop new renewable energy technologies, through an investment unit called Virgin Fuels.

Branson’s espoused reason for this? (From Forbes…)

I’ve got children; hopefully I’ll have grandchildren. Everything I’ve read about the world shows we need to reinvest in new sources of fuel. I’m in a position to do something.

Sounds like a nice bit of philanthropy. Now, there is a bit of a catch. Branson isn’t just giving this money to charity. He’s planning on investing it in companies seeking to develop cleaner fuels, renewable sources of energy, etc.

Branson is quoted byABC News:

Obviously what we hope is to generate profit from that so we can then carry on reinvesting it and building a powerful company, which can invest … in more fuels

OK, cynics: ready, set, GO!

“Ohhhhh,” quoth the cynic, “he’s not actually giving money away, he’s just investing it in hopes of making more money!”

But wait.

Will Branson get some press for this? Sure.
Will Branson’s ego get stroked? Of course.
Will he profit from his investment? Who knows. Maybe. It’s a gamble.

The key, I think, is this: Branson clearly has some cash at his disposal. (And by “some”, I mean “lots of.”) He can invest it in lots of things. He can invest it in Exxon (which would be a much safer investment). Or in the tobacco industry. Or in expanding his mansion. Or in solid-gold toilets for his private jet(s). Intstead, he’s decided to invest a huge chunk of change in something worthwhile.
So, is Branson going to get praised just as if he were handing money over directly to some charity? I sure hope so.

The language of “corporate citizenship” is pretty common these days. My friends Wayne Norman and Pierre-Yves Néron (at the University of Montreal) have been doing good work examining the ups and downs of applying the political vocabulary of citizenship to the artificial entities known as corporations.

In light of this, I found the following story pretty interesting:
Wal-Mart strides into election fray

Wal-Mart, the nation’s largest employer, is planning to launch a voter registration and education campaign this fall targeted at its 1.3 million employees in an effort to combat growing criticism from Democrats and labor unions.

By doing so, the world’s largest retailer is striding into the national political arena, which until this election cycle it has taken pains to avoid.

Fantastic, huh? A major corporation working hard to make sure its employers vote (in an era where voter turnout in many democracies is pretty pathetic). That’s good, right? Promoting voting, and other forms of legitimate political engagement, has to be a central virtue of citizenship. But wait, this is a big corporation, flexing its muscles in the political realm. That’s bad, right? Uh-oh! Lots of people get uncomfortable — understandably — when corporations (and their deep pockets) get too involved in politics. Well, it’s certainly food for thought.

As Wayne and Pierre-Yves argue, in a paper they presented at the Society for Business Ethics meeting in Atlanta last month…

What a normative theory of corporate citizenship needs…is a framework for deciding what sorts of political activities and relations with government regulators are appropriate or inappropriate, permissible or impermissible, obligatory or forbidden for corporations….

(p.s. Some people say Enron is the best thing that ever happened to Business Ethics, as an academic discipline, on the grounds that it did a lot to bring the importance of business ethics into the media spotlight, and made it harder for dinosaur colleagues in certain business schools to continue doubting the significance of ethical issues in business. I think Wal-Mart has done more for Business Ethics than Enron did, precisely because Wal-Mart presents so many ambiguities. Enron is the hard sell. But Wal-Mart is so much more thought-provoking.)

Over at the Rebel Sell blog, Andrew has a nice commentary on a NY Times story about the battle over standards for organic foods. Wal-Mart is (again, still) being accused of selling “organic” food (in this case, milk) that doesn’t meet the standards for real organic food.

Andrew’s response to one critic’s concern that feeding cows grain — even organic grain — isn’t natural? This:

Natural behaviour? Cows aren’t natural entities. Like dogs, they’re completely artificial. They’re basically living meat sculptures, shaped by humans, for human purposes, over thousands of years. Besides, who cares whether what they eat is part of their natural behaviour? You’re going to drink their milk. Once you’ve decided that you’re willing to swallow whatever comes out of a cow’s udder, you’ve pretty much abandoned any high ground on the “natural behaviour” front.

Seems to me the obvious pop-cultural touchstone for the un-naturalness of cow’s milk is comedian Tom Green’s famous stunt, drinking directly from a cow’s teat. (I’m sure Green wasn’t the first to do this for its shock value, but he did kinda perfect it.) Green’s shtick is funny precisely because it plays on our own visceral reaction to the un-natural act of drinking cow milk.

So, just what is the debate over? At heart, it’s a debate over “the principles” of organic agriculture. Which principles are those? Depends who you ask. Given that, as far as I know, there’s currently no evidence that organic anything is any safer for human consumption than non-organic equivalents, debates over standards pretty much have to come down to debates like the one Andrew justly mocks. Debates over which style of organic farming is “more natural” have more in common with disputes over interpretation of religious texts and debates over whether a particular transitional painting is best seen as part of an earlier, or instead a later, artistic era, than they do with debates over (say) standards for garment-industry labour. (I don’t see any reference in the NYT story to animal welfare. Is that one of the “organic” principles? That’s quite a stretch, I would think. I care about animal welfare, but isn’t that a separate issue?)

What it comes down to, I suspect, is that Wal-Mart has figured out which aspects of “traditional” organic agriculture consumers (or at least, enough consumers), actually care about, which is absence of pesticides and growth hormones. Wal-Mart will capitalize on the fact that their average shopper does not care — probably never will care — about whether the diet the milk-cow ate or the environment in which it was raised was “natural.” Even if there’s no concrete evidence that organic foods are healthier, that’s what most consumers want from it, not good karma.

Things are not getting any better at Hewlett Packard. (The story is about allegations that HP used unethical, perhaps illegal, methods to determine who on their board was leaking information to the press. See my earlier posting about this.)
From today’s NY Times:
Hewlett Review Is Said to Detail Deeper Spying

A couple bits worth noting from the NY Times story:

Hewlett-Packard has said that as a public company, it had a responsibility to stop unauthorized disclosures.

Note the use (appropriation?) of the language of ethics, here. HP claims to have had a responsibility — an ethical or legal duty — to stop the unauthorized disclosures. Now, that might well be true. In fact, it probably is true. But such an obligation clearly does not immediately imply a right to meet that obligation by any means necessary. (Interestingly, little of the coverage of this story has had much to say about the actions of George A. Keyworth II, the board member eventually found to have been the source of the leaks. Were his actions unethical? Illegal? A serious failure of governance? A breach of fiduciary duties? Now, two wrongs don’t make a right — even if Keyworth’s actions were inappropriate, that doesn’t make HP’s investigative measures justified — but I for one would like to know more about standards for board confidentiality.)

This is also pretty interesting:

The account of those briefed on Hewlett-Packard’s review of the matter sheds new light on the scope and timing of the investigative methods, establishing that invasive and possibly illegal techniques were used far earlier than previously known and that the company’s chief ethics officer was among those providing supervision. [empahsis added]

The Times names Kevin Hunsaker as HP’s senior counsel and “director of ethics.” I don’t know whether “director of ethics” is the same as “chief ethics officer”. I checked HP’s ethics page, and it doesn’t seem to say who’s in charge. The search tool on HP’s website also turns up nothing for the name “Hunsaker.” Is this guy a ghost? Or has the Times mis-spelled his name (doubtful). If anyone can clarify this for me, let me know.

For further reading:
Governance & Ethics at HP