by Jon Entine
What do you do with too much ice cream? That was the dilemma faced a few years ago by Ben & Jerry's. After every run of Rainforest Crunch, Chunky Monkey, or Cherry Garcia, technicians at its Waterbury, Vermont, headquarters washed down their machines with hot water, leaving gallons of diluted ice cream. At most companies, the waste would have presented no dilemma at all-just wash it down the drain. Ben & Jerry's, with its socially conscious operating philosophy, had another idea. The ice cream water was collected and given away to local pig farmers.
It seemed like a classic win-win situation: Ben & Jerry's solves a minor environmental problem while farmers get an unexpected windfall. At least, that's what everyone thought. Meanwhile, the story was fed to the press along with pints of free Chubby Hubby. It got great play in Vermont and even made the international news wires: yet another example of benevolent eccentricity at one of today's most progressive companies.
But benevolence soon turned into disaster. Piglets that happily slurped Ben & Jerry's Homemade sugar water never made it to 600-pound adulthood, suddenly expiring at 200 pounds, victims of oddly human-like arteriosclerosis. It was a minor catastrophe, the kind of reckless idealism that everyone would forgive, but Ben & Jerry's chose to hide the mess. A reference to the project was suddenly deleted from the company's annual report; no one was allowed to talk about the story, even to its social auditor.
This would be merely an amusing story if not for the disturbing insights it offers into Ben & Jerry's quixotic managerial style and the contradictions of many businesses that boast the moral high ground. The sloppiness, and eventually the arrogance, that marked "swinegate" is as much a trademark of Ben & Jerry's-and the socially responsible business movement in general-as its well-publicized social campaigns. It leads to far more significant disasters, such as the ill-conceived "rainforest harvest" which has caused so much unintended disruption in Brazil.
"The success of the rainforest harvest and our Rainforest Crunch ice cream made from Brazil nuts," said Ben Cohen in a June speech in Los Angeles, "has shown that harvesting nuts is a profitable alternative for indigenous Amazon natives who have seen their lands ravaged to create grazing areas or for mining." The crowd of 350 idealistic business leaders at a local meeting of Business for Social Responsibility (BSR) burst into applause. It was an inspiring moment. The only problem is that Cohen wasn't telling the truth.
In fact, Ben & Jerry's 1995 annual report, released just days before, and a spate of recently published critiques, tell the behind-the-gloss details of what anthropologists have come to call the "rainforest fiasco." In 1987, Cohen left a Grateful Dead fund-raising concert for the Amazon rainforest determined to do his part to help. Thus was born "Rainforest Crunch" ice cream. By 1990, Cohen had set up Community Products Inc. to source and market Brazil nuts for rainforest-friendly products.
Cohen was sincerely convinced that capitalism-on-the-Amazon offered indigenous cultures an alternative to mining and clear cutting. According to the label on his ice cream, "money from these nutsxhelps to show that rainforests are more profitable whenxcultivated for traditional harvest than when their trees are cut and burned for short-term gain." The harvest was an overnight success-for Ben & Jerry's, which reaped millions of dollars in profits from its best-selling ice cream.
The view from Amazonia was not nearly so sanguine. The anticipated source for the nuts-the Xapuri cooperative of white, former Portuguese rubber tappers-never produced the necessary quality or quantity. To meet exploding demand, Ben & Jerry's turned to the commercial markets supplied by some of the most notorious, anti-labor agribusinesses in Latin American, including the Mutran family, convicted of killing labor organizers. Over the years, Ben & Jerry's has purchased more than 95 percent of the nuts for Rainforest Crunch from these suppliers.
The story gets worse. Larger commercial interests elbowed out native suppliers in Brazil and Bolivia and flooded the market. Nut prices, already soft, plummeted, cutting the income of native tribes who did harvest the nuts. To make up for the shortfall, Indians have been selling off more land rights. Meanwhile, not one pint of Rainforest Crunch has included nuts harvested by indigenous natives for Ben & Jerry's.
The vaunted rainforest harvest has been dubbed "harvest moonshine" by Survival International, an indigenous rights group. University of Chicago anthropologist Terrence Turner calls the harvest "Aid Not Trade," a play on Ben & Jerry's and The Body Shop's "Trade Not Aid" slogan. "Indigenous cultures give these companies free aid in the form of their green image with almost no trade in return," says Turner. Even Ben & Jerry's own annual report takes the company to task. "It is a legitimate question," writes Paul Hawken in a social audit included in the 1995 report, "whether representations made on Ben & Jerry's Rainforest Crunch package give an accurate impression to the customer." Hawken quotes sharp criticism from Amazon rights groups, then concludes: "There have beenxundesirable consequences which some say were predictable and unavoidable."
Aware that the messy reality of the rainforest endeavor was beginning to leak to the mainstream press, Ben & Jerry's quietly ditched its deceptive label this spring. Yet, no one at the company, which declined to comment on "swinegate" or the harvest controversy, has been able to reign in Chairman Cohen. "We have made a difference in the rainforest," he said during the recent Los Angeles gathering. At the reception after his speech, a new member of BSR munched contentedly on Rainforest Crunch. "It's so inspiring," she said, "to know that business can make money and still do so much good."
According to Joan Bavaria, president of the Franklin Research and Development social investment firm, the business world can no longer be conveniently divided into "bad" multinationals and "good guys," mostly retail entrepreneurs. Bavaria is one of the founders of CERES, the Coalition for Environmentally Responsible Economies. In the wake of the Exxon Valdez disaster, an evolving group of environmental and social activists and public pension trustees developed a set of environmental standards and accounting guidelines with the goal of beginning a constructive dialogue with business, small and multinational. "We are entering a new era in the world of socially responsible managing and investing," says Bavaria. "It is not a black world or a white world with neat and crisp lines of demarcation. It is the real world of complex systems and internal contradictions."
The search for socially responsible business (SRB) principles is fragile and still evolving. The philosophical roots stretch back to the Industrial Revolution. Robert Owens, the early 19th century Welsh philanthropist and socialist, founded "Owenite" communities in the United States and United Kingdom. Over the decades, social business experiments such as George Pullman's model factory town near Chicago flourished and failed. Few were taken seriously by the mainstream business community.
SRB has only become fashionable in the last 15 years, spurred by environmental concerns and the cultural impact of aging baby boomers. Green marketing is sizzling. More than one third of consumer dollars are so-called "green" dollars-$100-plus billion a year. Investors are also putting their money where their hearts are: $5 billion has poured into some 30 mutual funds that screen out companies that develop weapons, sell alcohol, or violate environmental regulations; another $10 billion is "ethically" invested by pension funds.
Yet, for many companies, even those run by well-meaning executives, "responsible business" is little more than a synonym for "cause-related marketing," or trading on the idealism of consumers. Affluent baby boomers no longer try to change the world so much as "shop for a better world," the title of a popular "green" consumer buying guide.
Big business has jumped on the green bandwagon. Today, everyone from Mobil to Waste Management makes noise about reengineering the corporation, improving worker relations, or protecting the environment. "We are all environmentalists today," says George Keller, Chairman of Chevron, which has systematically tried to gut toxic waste regulations.
This is not to suggest that all green claims are frivolous or fraudulent. Many companies walk their talk because it makes dollars and sense. Responsible business fosters pride, spurs employees, and creates loyal customers. Selling quality products; treating employees, franchisees, and vendors with integrity; and reexamining environmental practices go straight to the bottom line.
For instance, Monsanto recently began recycling its sludge after it found it cost more to just dispose of it; Johnson & Johnson rebounded from its Tylenol poisoning crisis so quickly in part because of its quick, sensitive response to loyal consumers and its well-deserved reputation as a progressive corporation. The press is far more sympathetic to companies it perceives as open and trying to do things with a double bottom line in mind.
Unfortunately, many companies spend far more time bragging about green practices than actually practicing them. On close scrutiny, progressive business is often a land of alchemy where promises are easy to make, workers are frequently treated with indifference, and environmental reforms are superficially attempted. "So many socially responsible companies have noble corporate philosophies," observes Jon Lickerman, a social researcher with the Calvert Group of mutual funds, "but mistreat their own employees, vendors, and customers."
In 1976, Anita Roddick opened a tiny shop in the faded English southcoast resort town of Brighton. The Body Shop offered "one-stop ear piercing" along with an exotic-sounding array of beauty products in small, plastic bottles. Today she and her husband Gordon oversee a chain of 1,200, mostly franchised Body Shops in 45 countries with annual sales of $750 million. With a net worth of more than $250 million and an annual income of $1.1 million, Roddick is arguably the most financially successful self-made business woman in the world. No competitor could match her two-for-one sale: buy a bottle of not-tested-on-animals Brazil nut hair rinse and get social justice for free. While other companies sell beauty-in-a-bottle, Roddick peddles idealism.
Roddick and The Body Shop are an intriguing combination of entrepreneurial single-mindedness, off-beat charisma, and moral arrogance. "Anita instinctively understands the facile nature of the press," says Janis Raven, who crafted and supervised the company's eco-friendly public relations image from 1979 to 1986, "and she plays to it."
At first celebrated mostly for her quirky marketing, Roddick gradually became a favorite of affluent baby boomers, a harbinger of the New Age, weaned on can-do chutzpah and do-right values. The SRB-a loose-knit collection of environmental and social activists and New Age entrepreneurs that calls itself the "social responsibility movement"-raised her to feminist icon status. "This Woman Has Changed Business Forever" ran a cover story in Inc. magazine in 1991. "Anita," Ralph Nader once said, "is the most progressive business person I know."
The Body Shop's image masked its frequently less-than-ethical practices. Last fall, Business Ethics printed my expose "Shattered Image: Is the Body Shop Too Good to Be True?" This was soon followed by revelations in In These Times (David Moberg, "The Beauty Myth," September 19, 1994) and scathing analyses by corporate research groups in the United Kingdom, Canada, and the United States.
The reports paint a portrait of a company that sells expensive, mediocre products filled with petrochemicals (according to Consumers Reports and other independent journals); has a history of penurious charitable contributions (nothing in the company's first nine years; one half the average of U.S. corporations over its history); misrepresents its ethical trading practices (less than 0.16 percent of turnover); and struggles with troubled franchisee relationships across the world, spawning numerous lawsuits and a Federal Trade Commission fraud investigation.
Most startlingly, Anita Roddick's rags-to-riches-to Robin Hood myth was based on a fundamental deception. The Body Shop's name, store and package design, product line and even its recycling philosophy were copied from another cosmetic shop - the Body Shop of Berkeley, California which the Roddicks visited in 1971, five years before Anita opened her first shop in the UK. And according to her early executive team, Roddick fabricated stories of discovering beauty elixirs in far off lands. Overly inquisitive journalists or fair trade activists who questioned the company myth have been threatened by Body Shop solicitors, an effective deterrence on the press in the libel-shy UK.
The self-proclaimed 'world's most honest company suddenly found its corporate character under scrutiny. The revelations consumed the British media and spilled over into the international press. "[Shattered Image]," wrote Eric Utne in the Utne Reader (January-February 1995), "set off a firestorm of press coverage and looked for a time like it might bring down the socially responsible business community's most visible and vocal leader, consuming the rest of the movement in the conflagration." The Body Shop's stock plunged, recovered, and then fell to an all-time low this June, stripping more than $500 million in equity from investors.
"Anita brought a lot of people into the tent," confesses Steve Scheuth, an executive at Calvert Financial, which oversees the country's largest group of ethical mutual funds. "She was the star. She generated more attention than all other progressive leaders put together. But we were snookered. We swallowed Anita's hype, hook, line, and sinker." Depending on one's perspective, Roddick is either a visionary who is being unfairly crucified for excessive enthusiasm, or a cynical exploiter of idealistic customers, employees, and trading partners. Perhaps she's both.
Debating The Body Shop's fall from grace has become an Internet parlor game among academics and an obsession within the activist community. "Socially Responsible Business Brawl," headlined a March article in The Progressive, one of many on the controversy. This affair continues to smolder because it cuts to the paradox of the socially responsible business movement: Can we "shop for a better world?"
Does buying $2.99-a-pint of artery-clogging ice cream made with rainforest nuts herald a new age of business or just inure the public to the consequences of our profligate lifestyle? Are retail firms led by outspoken, charismatic visionaries such as Ben Cohen or Anita Roddick more responsible than grayer companies such as Cummins Engine or Gillette, which quietly but conscientiously involve themselves in their communities, open their corporate practices to outside scrutiny, and develop intensely loyal workforces? Most importantly, is socially responsible business about quality products or services, and treating stakeholders-workers, vendors, investors, and customers-honestly and fairly, or railing about injustice in the world?
New Age entrepreneurs, like big businesses, run the ethical gamut. There are no icons in the business world, only companies with some innovative programs and many bottom-line compromises. Even well-publicized models that appear to have the best intentions are riddled with contradictions-or worse. A few examples:
The consumer-unfriendly reality is that you can't tell the "good guys" even with a scorecard; indeed, you never could. Despite the proliferation of green buying guides and widely-touted "social screens" offered by mutual funds such as Working Assets, Parnassus, Calvert, and others, ethical measuring sticks are wildly subjective.
Is defense spending in a post cold-war era good or bad if it generates high-paying, secure jobs and helps secure the peace? Is unionism progressive or not? Many liberal litmus test issues such as an opposition to animal testing or support of so-called "natural," environmentally friendly products demonstrate the facile nature of most screens. In the following two examples, which of the companies is the more progressive?
Gillette, which has spent tens of millions of dollars to develop alternatives to animal tests and publishes the details and scientific rationale of every test that it performs; or The Body Shop, which has helped spark an international debate on the necessity of animal testing yet has spent nothing to finance alternative research, been condemned (and even sued) by animals rights activists for demagoguing the issue, and uses tested-on-animals ingredients in many of its beauty products.
DuPont, which has pioneered numerous environmental reforms and monitoring programs, yet has been guilty of many serious environmental violations; or Ben & Jerry's, which sets impressive environmental standards in many areas yet ships its Vermont milk in gas-guzzling trucks to all parts of the United States and makes an expensive, frivolous, potentially health-threatening product.
For many companies, progressive business practices are part of day-to-day operations, not an excuse to call in the press and trumpet the latest visionary accomplishment. The Body Shop, Celestial Seasonings, and Tom's of Maine-or Johnson & Johnson, Nordstrom's, and AT & T, for that matter-are not socially responsible businesses because they claim to be in clever promotions. Companies resemble dysfunctional families; the best of them have a handful of interesting programs and many contradictions. The urge to demonize big business and iconize eco-entrepreneurs such as Anita Roddick and Ben Cohen belies the complexity of business. Hypocrisy is not limited to soul-less multinationals appropriating progressive buzz words.
"Some of the most innovative environmental programs are the creation of some of the worst polluters," says Paul Hawken, an author and expert on progressive business. "It may not be politically correct to say this, but innovative solutions are not the exclusive province of the so-called progressive companies. We have to keep an open mind and look for solutions wherever they may be."
A "visionary" model of companies, which looks outward to vague and contradictory social goals, must be replaced by a focus on corporate character-an "integrity" model based on transparency and a responsiveness to criticism. The most farsighted members of the SRB community are broadening their vision to include larger, sometimes messy corporations. Among the endorsers of the CERES principles are Ben & Jerry's and Patagonia-and General Motors, the Arizona Public Utilities Commission, Polaroid, HB Fuller, and Sun Oil. These companies are publicly committed to environmental audits of their complex operations. Even a tiny change in the way multinational manufacturing firms do business will have far more sweeping economic and environmental impact than a handful of new low-paying jobs at next year's fad "green" and "natural" consumer products retailer.
Business ethics is not "performance art" but old-fashioned stakeholder concerns such as job security; employee pay, benefits, and work conditions; franchisee and vendor relations; and product quality and customer service. Greenback capitalism-that is, business on the back of the green movement-only perpetuates a myth of "socially responsible" business and breeds cynicism. "It's a lot worse," says Steve Goldstein, a former systems manager with The Body Shop, "when you find out that the robber who's been stealing from you is the local cop."
Jon Entine is a journalist who writes and speaks frequently on the issues of business ethics and corporate social responsibility. Find out more at his website-- http://www.jonentine.com --or contact him directly at: runjonrun@earthlink.net.
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