from Sunday Herald, 18 August 2002
JONAH Peretti, a student at the Massachusetts Institute of Technology, has a cheeky sense of humour. Noticing that the sportswear multinational Nike allows buyers to put personal IDs on their trainers, he thought he would get something memorable inscribed on his.
He was aware of the allegations frequently levelled at the company that it exploits children in developing countries. In order to commemorate their toil, he asked for the word "sweatshop" to be stitched into his Zoom running shoes.
Nike's advertising blurb says the personal IDs are "about freedom to choose and freedom to express who you are". But after Peretti had filled out the form and paid his $50, his freedom of expression was denied. Some personal IDs "may contain material that we consider inappropriate or simply do not want to place on our products", a company spokesman explained.
The argument between the student and the corporate giant, which took place last year, has since been immortalised on hundreds of websites around the globe. Peretti and Nike's exchange of e-mails has also been circulated by anti-corporate activists to millions of people worldwide, doing untold harm to the brand's image.
It is a classic example of the kind of problem that big-name companies can face in the world of high-speed communications. Whether or not the sweatshop allegations are true, the suggestion that they might be has been rapidly implanted in the minds of countless potential customers.
This kind of pressure, along with public protests, media exposés and government regulations, is forcing companies to change. Or so David Grayson and Adrian Hodges contend in a lavish £20 book published by Dorling Kindersley and the Financial Times that is due to be debated at the Edinburgh Book Festival tomorrow.
In Everybody's Business, they provide a step-by-step guide on how company managers can respond to what they call "the emerging management issues".Loosely defined, these include human rights, social justice, good health and environmental sustainability - anything that may fall under the banner of the new catchphrase "corporate social responsibility".
The book, billed as the "corporate ethical bible", advances a clear, well-illustrated, argument in favour of companies doing what they can for the public good. Managers who understand the importance of social and environmental issues can improve their company's performance and their own job satisfaction, it says.
Enhancing workers' rights can create a more productive workforce, cutting back on pollution and waste can save money and engaging local communities can reduce conflicts. Responding to public concerns can enhance a company's reputation and hence boost its profits.
"Conversely," assert Grayson and Hodges, "ignorance of these issues makes good managers flounder, wastes time, adds to operating costs, hurts company reputation and sales and drives talented employees away."
The book is packed full of instances of corporate responsibility. The DIY chain, B&Q, has promised only to use timber from forests that have been independently certified as sustainable. The Body Shop has a well-known policy of not allowing animals to be tested in the manufacture of its cosmetics.
Meanwhile in the US Coca-Cola teamed up with WalMart to contribute a proportion of sales to a group called Mothers Against Drunk Driving. ABB Electrolux recycles all its electrical appliances in the States. In all these cases the companies' profile and sales are thought to have increased as a result.
A key turning point in the drive for corporate responsibility was Greenpeace's 1995 campaign against the dumping of the Brent Spar oil storage platform into the North Sea. The platform was occupied by activists and its owners, the Shell Oil Company, was targeted by a Europe-wide consumer boycott. After mounting pressure from governments, Shell surrendered and eventually agreed to pay more to dispose of the Brent Spar onshore. In 1998 the company commented: "We have learned that we must change the way we identify and address issues, and interact with the societies we serve."
All companies now need to re-evaluate their relationship with society, argue Grayson and Hodges. "Every manager concerned with the profitability of their unit or enterprise needs to be concerned with the prosperity of the communities that feed those profits."
Recalling the recent wave of angry protests against the globalisation of big business, they write: "For us, the front line in the struggle to overcome inequality, poverty, disease and pollution is not formed by the rows of masked protesters in Seattle, Genoa or Washington, but by the legions of front-line managers, who every day contribute to the creation of wealth."
But the pro-business views of Grayson and Hodges are dismissed by many social and environmental groups as nonsense. They point out that companies only do what they are forced to do by public protest or government regulation, and that their bottom line always has to be to make a profit for shareholders.
Of course any company which decides to improve workers' conditions or to stop polluting a river should be applauded, the groups say. But that does not mean that they can be the world's saviours. How can tobacco barons, arms dealers or nuclear companies ever manage to be socially responsible? And what happens when the need for profit simply cannot be reconciled with social and environmental justice?
Only last Friday numerous examples of corporate irresponsibility were highlighted in a report, Clashes With Corporate Giants, published by the international environmental group Friends of the Earth. The world's biggest oil company, ExxonMobil, for example, is under fire for planning a 1000km oil pipeline through Cameroon's tropical rainforest. The mining giant Rio Tinto is criticised for prospecting for gold in the protected forest of Poboya in Indonesia. Shell's leaking oil pipelines are blamed for causing pollution, sickness and death in Nigeria. And the South African chemical company Sasol is attacked for contaminating a nearby township.
"Sasol pollutes the air we breathe, causing poor health and bad living conditions while making huge profits for the company," says Lerato Kasa, a spokesperson from a local environmental group. "They fund a couple of community projects, thinking we will forget about the pollution. How can we forget when the pollution is making our parents, brothers, and sisters sick?"
Friends of the Earth argues that the damage being done by multinationals can best be countered by governments agreeing a new set of rules on corporate behaviour. The group is campaigning for this to be introduced at the 170-nation World Summit on Sustainable Development which starts in Johannesburg next weekend.
At the moment, however, this looks unlikely to happen. Which means it will probably still be up to the masked protesters to keep big business in line - helped along by the likes of Grayson and Hodges.
The world will also need more cheeky e-mailers like Peretti. He ended his polite exchange with Nike by adding one small request: "Could you please send me a colour snapshot of the 10-year-old Vietnamese girl who makes my shoes?" He never did receive a reply.
