Measuring corporate greenness

Nice to see that Wal-Mart are putting more emphasis on environmental issues. Or at least, it may be nice. Who knows what they are really up to? Like any big company, their primary interest is in profit, and anything that deflects them from that goal needs to be corroborated thoroughly before it can be confidently accepted as a socially or environmentally responsible action.

For example, it is perfectly clear that the great bulk of Wal-Mart’s supposedly green initiatives will actually reduce their costs. Cost-cutting has always played a major part in Wal-Mart’s strategy, and although it may benefit the environment is some ways, in others it does not. For example, reducing packaging is often a good thing, but pressurising suppliers to cut prices is not, in itself, good, either for the environment or for society as a whole. But it is undoubtedly good for Wal-Mart’s bottom line.

So how can you tell when a big company is really contributing to improving the environment? From the point of view of individual actions, probably you can’t. Who knows what is in their financial interest, what is done for the sake of marketing their ‘good neighbour’ image, and what is really done for the sake of the environment?

But taking their actions as a whole, I would suggest a sequence of levels of credibility:

1. They deny either that there is an environmental problem, that they are in any way a cause of that problem, or that they are responsible for doing anything about it.
2. All those initiatives they are doing ‘for the environment’ are in their own interest anyway, are prioritised according to how much they benefit them financially. In other words, business as usual, re-sprayed green.
3. Environmental benefits start to appear at the top of their list of initiatives because they are environmental. They are still in the company's own corporate interests, but their environmental impact takes priority over at least short-term financial gain.
4. They start shouldering the costs of environmental improvement without insisting that this must have a payback for their company. Some things require sacrifice, and this is a sacrifice they are willing to make.

There’s a lot of grey in this sort of approach, but I for one would like to see a simple league table of companies based on something this simple and direct. I would be interested to hear about any company that made it to the highest level without a shareholder revolt and a huge amount of fudging.

If, on the other hand, Wal-Mart and the rest are just trying to build up their green credentials for marketing reasons or to deflect the prospect of regulatory intervention (hardly likely under the current US administration, of course, but who knows what lies around the corner?), then they are not simply manipulating the public. By creating the illusion that the biggest companies in the world – which is also to say, the some of the biggest economic forces – are taking action when they are really nothing but pursue the same agendas that got us where we are today, they are actually making the environmental situation worse.

If, on the other hand, Wal-Mart and the rest are just trying to build up their green credentials for marketing reasons or to deflect the prospect of regulatory intervention (hardly likely under the current US administration, of course, but who knows what lies around the corner?), then they are not simply manipulating the public. By creating the illusion that the biggest companies in the world – which is also to say, the Great Powers of industrial capitalism – are taking action when they are really doing nothing but pursuing the same agendas that got us where we are today, they are actually making the environmental situation worse.

This possibility raises the next question. What should we do about companies that refuse to accept their responsibility for their impact on the environment, for the current environmental crisis and for its remediation? It does not require cynicism to expect that quite a few (most?) companies will be either too laggard or too unable to look beyond their shareholders’ profits to take responsible action.

So what do we do about the socially irresponsible corporation? Exactly the same as we do about the socially irresponsible individual. As with individuals, it would be absurd to expect them to do everything immediately, but those who do nothing – or who actively plan to make the situation worse – invite society’s contempt, anger, and ultimately constraint. If corporations wish to continue to operate within society, they must prove that they are good citizens. If they are not, then that is why we have a political system.