Adidas’ 1-Euro-shoe
Posted: November 11, 2010 Filed under: Company reports | Tags: Adidas, Greenwashing, Social business, Yunus Leave a comment »Last week in Wolfsburg, Adidas and noble peace price lauderate Muhammad Yunus again announced that Adidas will produce trainers for the poor for 1 Euro a pair as a social business (see also FAZ and Daily Telegraph in 2009). The idea is to produce a shoe in Bangladesh that does not fall apart after two months and that protects the poor from diseases that they normally get from running around without shoes. Yunus condition is that Adidas and its shareholders must not make any direct profits from the project.
Why should Adidas cooperate with Yunus? According to the recent Spiegel article, Maik Pflaum from the CCC criticized this cooperation for mainly pimping up Adidas’ reputation. One participant in Wolfsburg, whose company also cooperates with Yunus, told the Spiegel that the only profit his company makes is in the area of reputation. While Adidas says that they do not need such image polishing, Yunus admits this danger of greenwashing. However, he argues that the good large companies like Adidas can actually do, outweights the potential negative effects. Yunus intends to change the employees’ “spirit” of profit maximizing in large companies – simply put: if the people feel what good they can do, they will change.
Surely Yunus is a highly influencial personality, but I wonder how well this thinking works in a world of factual constraints and how much companies do really change if they see they can do good. My friends from economics always tell me, you cannot convince a company with arguments based on ethics. Companies can do good, but they primarily must make profits, even if not all must maximize them. I do not believe that a trainer can be produced for 1 Euro (well, maybe flipflops); so Adidas must somehow cross-subsidize the costs; hence, Adidas must convince its shareholders that it is worth while to support this project; why would an Adidas shareholder do that, if not for gaining more dividends, in the end? Here we are back at Milton Friedman. Also, such a project might confront Adidas with the need to explain, why we pay 200 Euros for a sneaker, while they can produce them for 1 Euro.
Kerstin Humberg, my colleague at the University of Cologne, who writes her PhD on Yunus and social business, also blogs about Yunus.
A CSR paradox: How do we match “gas-free” certification with car racing?
Posted: October 12, 2010 Filed under: Company reports, News | Tags: Car Racing, CSR, Greenwashing, McGregor, Paradox Leave a comment »How coherent must corporate practices be to not run danger of greewashing? Recently, I saw two press releases concerning the brand McGregor, which did not seem to fit together. One news posting reported that McGregor becomes the official partner of the automobile club of Monaco. Another agency reported that McGregor – introducing an organic fashion line – was an example that high-class fashion and eco-fashion do not exclude each other. In addition, on its own website McGregor (very poorly) presents its engagement for the environment, and it is also member of the FWF (which is very positive). In their CSR agenda one issue seemed particularly paradoxical to the car business:
When it comes to transport, we require all our shippers to guarantee that gas-free (free of toxic substances) transport is used for our products. At the McGregor distribution centre a container is not unloaded if it does not have a gas-free certificate. We require all shipments that enter Europe by container to comply with the rules. In practice this means that all containers carrying our products must be accompanied by a gas-free certificate.
This might be a good practice. But car racing is the maybe most senseless way of polluting the environment with CO2 and other toxics (surely, others value car racing higher). However, what we have here is that a company argues that it is committed to protecting the environment, while it promotes car racing just to boost its brand. This does not make sense.
Certainly McGregor does not say itself that it is a eco fashion company. My question is: Should we praise McGregor for helping protect the environment, for instance by introducing an organic line and using green energy, or do we have to evaluate the environmental efforts as greenwashing in a more comprehensive way – in light of the explained hypocricy?! Or: How coherent must a company be in their overall policy in order to not run danger of greewashing with their CSR policy?
Discounters & Zuckerberg (English clips)
Posted: September 24, 2010 Filed under: Clip | Tags: Aldi, CCC, Greenwashing, KiK, Lidl, White wash Leave a comment »Here is the “Schönfärber” clip of the CCC with english subtitles:
As clips belong to modern NGO campaigns, here is a very nice example of another campaign clip (however, with no connection to textiles):
Like this:
How not to do CSR: The case of Tatonka
Posted: September 20, 2010 Filed under: Company reports, News | Tags: Auditing, Better factories, CIR, CSR, Evidence, Greenwashing, Outdoor, Tatonka Leave a comment »
There is an interesting discussion ongoing between the German CCC (particularly CIR) and Tatonka, a German family-owned outdoor company. In July, CIR published the results of a study on CSR of outdoor companies (see also Abendzeitung). With regard to Tatonka the study comes to the result that the company cannot prove that internationally agreed working standards are implemented in the supply chain. Tatonka is producing 100% of its items in one self-owned factory in Vietnam – in terms of CSR this opens huge opportunities. However, Tatonka selected the following strategy that might look transparent at first sight, but more resembles a non-moving.
July, 28th: Tatonka presents its “Open Factory Programme“, which allows every consumer of a Tatonka product to visit their factory in Vietnam. The aim is to “document the long-term and sustainable engagement in the factory”. Tatonka argues that most factory audits are only a checkbook exercise, which do not show the many efforts the company takes to improve working standards. Criticizing audit techniques is definitely right, even if we need to differentiate a little. And it might be a nice holiday highlight for a European consumer traveling in Vietnam to visit a garment factory. But the idea that a factory visit by customers might improve or “document” working standards in any way seems either extremely naive or like an attempt to produce some quick positive PR to oppose the criticism. As Tatonka rightly says, audit professionals are criticized for not identifying the major problems in a factory: so how should a consumer “document” working standards in a factory?! This is particularly problematic regarding standards that are more difficult to identify (e.g. freedom of association, discrimination, wage payments).
August, 13th: Tatonka publishes a press release in which they argue that the report by the CCC (CIR/INTOKA) is biased and partly wrong. To provide evidence for their argument, they publish the questionnaire that was sent to the CCC on their website. Looking at these, I start to believe that there is little competence regarding social standards on the side of Tatonka. A few examples:
- Tatonka answers in the questionnaire (9.8) that it is member in the BSCI, which it is not. However, they even themselves argue elsewhere that they are momentarily screening and discussing different standards in the European Outdoor Group – in order to decide together, which standard they should all take. This might be a little late: The early movers have already joined the FWF, the ETI or the FLA.
- Tatonka argues in the 13/8 press release that the BSCI built up the “Better Work” Programm (“das von der BSCI in Vietnam vor Ort aufgebaute ‘Better Work’ Programm”). This is new information to me, and may also be to the ILO- and IFC-funded “Better Work” program.
- Tatonka argues that they want to combine the “open factory” programme with some standard audits. However, elsewhere they generally criticize audits…
- Instead of thanking their stakeholders to indicate that the outdoor industry has insufficiently addressed social problems in the global production (as most companies do today) and integrate these groups into finding a solution, they actively starts to fight the CCC. In a press release they ask their customers to take part at the discussions about the outdoor industry that are hosted by the CCC in Germany and ask detailed questions about Tatonka.
This case gives me three ideas: (a) Some companies still think (or at least argue0) that the labour laws in developing countries are sufficient for a decent life of workers. Maybe they should be, but there is surely enough evidence that they are not. (b) Some companies (such as Tatonka) do not understand that campaigning organizations like the CCC have an important role in society – and instead of using their critique constructively, they keep on criticizing NGOs. (c) Using methods like questionnaires to evaluate companies has its limitations. It does not measure the actual working conditions in the supply chains but can only evaluate the tools companies use to improve the working conditions. However, the results can certainly be misread. But as NGOs need evidence in their campaigns, it might be a better strategy to look at certain factories. This, however, requires transparency by the companies.
Let your people go surfing!
Posted: September 19, 2010 Filed under: Clip | Tags: Chouinard, Corporate culture, CSR, Greenwashing, Patagonia Leave a comment »Neil Smith, managing partner of SmithOBrien, a management consulting firm that specializes in corporate responsibility strategy development asks: “Does a commitment to corporate responsibility provide cover for bad corporate behavior”? He argues that a CSR strategy must be backed up with the right corporate culture (i.e. “the underlying values and norms that tell employees and managers ‘the way we do things around here’”) and uses the cases of BP, Apple and GlaxoSmithKline to illustrate the importance of the CEO and the board of directors in getting the corporate culture right. He concludes:
These three stories are common in the corporate world. Anyone who has worked for a large company can quickly recognize the mixed messages that come from those above. While people at the top, with their sights set on becoming the CEO, will mimic their boss’ behavior, those at the bottom, where most of the best operational solutions come from, grow disillusioned and cynical, and start looking elsewhere for an employer whose values more closely match their own. … Yet the role of the CEO as a leader and model for others in building and sustaining a truly responsible and transparent organization should take center stage. Equally important: a board of directors that insists the company doesn’t just pay occasional lip service to integrity and ethical behavior. The board should hold itself and the company’s top executives, to the highest standards of corporate responsibility.
Where is the connection to clothing? Yves Chouinhard, CEO of Patagonia, might illustrate well the role of a CEO in getting the corporate culture right.
RED: Doing good without challenging current practices
Posted: September 13, 2010 Filed under: Academic paper | Tags: Bono, CSR, distant others, Global Fund, Greenwashing, Ponte, RED Leave a comment »Stefano Ponte et al. recently (2009) undertook some deeper analysis of Bono’s philantrophic ideas: „Bono’s Product (RED) Initiative: CSR that solves the problems of ‚distant others’“ in Third World Quarterly (see also „Better (Red)TM than dead?“). Both articles analyse the RED initiative that the rockstar launched at Davos in 2006. Product RED is „a brand created to raise awareness and money for the Global Fund to fight AIDS, Tuberculosis and Malaria by teaming up with iconic brands to produce RED-branded products“ (p.301). Companies such as Converse, Gap, Armani, Apple, Motorola participate by selling some of their products RED-branded. So far, $150 Mio. were raised and 1/2 Mio. people “like it” on facebook.
The article examines „how the corporations that are part of this initiative use RED to build up their brand profiles, sell products and/or portray themselves as both ‘caring’ and ‘cool’.“ It uses a heuristic analytical framework, which distinguishes two types of CSR (engaged and disengaged) and two locations of CSR activity beneficiaries (proximate and distant) (see table 1).
Here are some of their main arguments:
- The RED initiative is a form of ‚disengaged’ and ‚distant’ CSR: „It is relevant and important to look at RED both as a new way of thinking about aid financing and as a manifestation of CSR that does not question the core objective of profit-maximization. RED improves a company’s brand without callenging any of its actual operations and practices, and increases its value and perception.“ (p.314)
- RED „pushes CSR back towards the disengagement that characterized the ‘old-style’ philantrophy it is framed against – but with a new funding mechanism based on consumption and co-branding“ (p. 313). But, in contrast to classical corporate philantrophy, in RED, „companies use ‘doing good’ to sell a particular set of products – profit is generated and donation is given at one and the same time“ (p.314) – sounds familiar…?!
- Potential critique from the ‘distant’ beneficiaries is excluded – and local accountability is regarded as low, if a company fails to succeed.
- Public contributions to the Global Fund remain much higher ($9.2 Bio in 01/2008) than private ones ($460 Mio in 01/2008).
Greenwashing, Bono & Louis Vuitton
Posted: September 12, 2010 Filed under: News | Tags: Africa, Cotton, Greenwashing Leave a comment »
Here is some stream of consciounsness on a lazy Sunday. I just read an interesting article “Mehr Schein als Sein” in the print issues of the Manager Magazine 9/2010 about Greenwashing and how measurements like the Dow Jones Sustainability Index can easily present a false image of a company – as in the case of BP. Christian Rickens presents two methods of greenwashing: (a) Exaggerate small environmental successes in public and thus divert from the fact that your core business is not ecological. (b) Clandestinely work against strict mandatory norms and publicly presents its (minor) endeavours in the area of sustainability.
Through my open window I hear Bono and his band singing in the Zurich Letzigrund stadium, which is only 600m from my flat. This makes me think of Bono’s T-Shirt brand, EDUN, which focused its marketing on developing Africa by sourcing some processes from Africa (e.g. organic cotton). Some clicks on the quite confusing website tell me that not all of Edun’s products are made of organic cotton in Africa – some say „cotton“ and „China“. Edun’s “mission” presents us a movie about “Bidii School” that is promoted by Edun and we can see some slides from cotton fields in Africa. But there is no information about a Code of Conduct, no transparency of the supply chain, no talk about living wages, fair trade cotton or GOTS.
I then learn that Bono and his wife are supporting the marketing of Louis Vuttion by posing for Anne Leibovitz in Africa – to promote „core values“… Tomorrow some German newspapers will present the new „campaign“. How does Bono benefit? Money from the sales goes into his „Conservation Cotton Initiative“ in Uganda. Where is the connection to LV’s core business?! Maybe to deduct attention from the core business? The website of the lvmh group – to which LV belongs – does not talk about corporate responsibility or accountability, but only about solidarity – and here we return back to what Slavoj Zizek talks about in his lecture about Solidarity that I posted some days ago.
Greenwashing @ Aldi, KiK & Lidl …
Posted: September 7, 2010 Filed under: Clip | Tags: CCC, Greenwashing, KiK, Lidl Leave a comment »The CCC in Germany has developed a very funny 2,5 minutes video-clip that sums up their view on discounters like Aldi, KiK and Lidl and illustrates greenwashing. Unfortunately it is only in German.
