The Guardian: Market morals: ‘protecting corporate reputations and brands’

EXTRACT: “It is very much about protecting corporate reputations and brands, protecting them from the tainting that has happened to, for instance, Shell and Nike,”

THE ARTICLE

Big brands are trying to convince consumers of their ethical credentials. But there are questions as to whether we should take them at face value

Duncan Campbell
Wednesday 15 November 2006

When a big international company talks of adding an “ethical sparkle” to its brand, just what does it mean? And when food companies claim to be greener and more organic than their competitors, should we believe them?

Some of the country’s largest companies will gather at a conference in London next week to be instructed how to take advantage of the growing consumer trend towards fair trade and ecological responsibility. While some environmental and human rights groups welcome the trend, and the fact that companies are now recognising the importance of such issues, others see the branding exercise as cosmetic and describe the claims made by some of the gathering’s participants as “Orwellian”.

The conference, entitled How To Make Ethical Branding Work, to be held on November 20-21, is organised by the Ethical Corporation, which was founded in 2001 and publishes a magazine of the same name. It will be addressed by representatives of Toyota, De Beers, Boots and Unilever, as well as members of Compassion in World Farming, the Fairtrade Foundation, Café Direct and this newspaper. Among the successful case histories presented will be Marks & Spencer’s strategy and Dove’s campaign using larger models. One session is on consumer boycotts and asks the question: “How do you manage the fallout of a well-publicised boycott?”

Each year, the reasons for companies to be concerned about ethics become more apparent. The global market for organic food is £13bn and growing fast and there has been a 50% increase in Fairtrade certified products in the past five years.

“Around 99% of the FTSE 100 companies now have some kind of ethical programme,” says Toby Webb, editor of Ethical Corporation. “Of course, some of them are not doing a great deal, but they are increasingly getting caught out for it. Marks & Spencer did a bloody good job on their Look Behind the Label, and others who tried to copy them got caught out. A few years ago, you could fudge it, but now it’s really easy to check up on whether they’re doing what they claim.”

For large companies that could face consumer boycotts over the use, for instance, of sweatshops, ignoring protests is no longer an option, Webb says. “Companies realise that, while in the old days they could ignore it or issue a terse press release, now they have to engage,” he says, adding that the ethical side of food production has led to a “massive battle in the supermarkets at the moment”.

John Elkington, founder and chief entrepreneur of Sustainability, who has been described as “a dean of the corporate responsibility movement”, says the fact that so many major companies are now treading the ethical path is broadly to be welcomed. “It is very much about protecting corporate reputations and brands, protecting them from the tainting that has happened to, for instance, Shell and Nike,” he says. “The total number of issues that companies are being asked to address is growing all the time and that can be bewildering for them.”

Elkington cites General Electric’s “ecomagination” campaign as a good example of how such a policy can both benefit the environment and the profit margin. “Even Wal-Mart, who have been whacked around the head by unions and local activists and environmentalists, are talking about very significant shifts in what they do,” he says.

Environmental factors

However, Elkington points out that China’s business expansion into Africa is paying little attention to ethical or environmental factors. He says: “There are a surprising number of companies who are still in stealth mode and who have escaped attention and may look at what is happening in China and Russia and think they can still get away with it.”

Lesley Lambert, of Compassion in World Farming (CWF), which will also be participating in the conference, says that companies are increasingly responsive to approaches from the organisation. “It has been a very positive process,” she says. “We have seen real changes in what supermarkets will stock. Initially, free range eggs, for instance, were seen as a niche market for concerned people, but not any more. It’s now mainstream.” CWF is launching a new consumer website to help people to buy from companies that have better farm animal welfare standards.

One of the participants, Sue Adkins, international director for Business in the Community, will address the issue of “cause-related marketing”, about which she has already written a book sub-titled Who Cares Wins. Most major businesses – the Guardian included – now recognise that the support they give to good causes may affect the way they are perceived by consumers.

Not all claims of ethical probity, however, are likely to be taken at face value by campaigners. Among the speakers at the conference will be De Beers director Stephen Lussier, whose topic is how “De Beers has added ethical sparkle to its global diamond brand”. He will also address the question: “Can big brands be ethically trendy?”

De Beers has been the target of a long-running campaign and calls for boycotts by Survival International (SI) on behalf of the Bushmen in Botswana, who have recently been moved from their lands by the government. Last month, SI placed an advertisement in Variety magazine, in which they called for a boycott of De Beers, using the peg of the new Leonardo DiCaprio film, The Blood Diamond.

“It is Orwellian – straight out of 1984,” says Stephen Corry, director of SI. “Corporations have been adopting the language of their critics in an attempt to disarm them. None of it is surprising. Everything has been heading in this direction.”

Lussier denies suggestions that De Beers was responsible for the removal of the Bushmen. “We have no connection in any way with the Botswana government’s decision to relocate them,” he says.

There would appear to be limits as to how far companies are prepared to go in taking ethical issues on board. Last month, major businesses and City investors loudly condemned the government’s surprise amendment to the companies bill that would require companies to publish their dealings with suppliers on “environmental matters, employees, social and community issues” and to address ethical issues.

It is nearly 150 years since Ralph Waldo Emerson wrote: “The louder he talked of his honour, the faster we counted the spoons.” While there would appear to be a welcome for genuine change and involvement on the part of major companies, it might be as well to keep counting those spoons – however ethically they may seem to sparkle.

· Details of the conference at www.ethicalcorp.com/communicate

· Any comments on this article? Write to [email protected]

http://environment.guardian.co.uk/bandqgogreen/story/0,,1947601,00.html