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Interviews: Growing a Green Economy

Many of us are accustomed to making our consumer choices based only on price and quality. Why should we factor in ethical considerations when making consumer decisions? Two experts in social investing explain how an educated shopper's dollar can wield clout and influence corporate practices.

September 2006

POV: Many of us are accustomed to shopping and making other consumer choices based only on price and quality. Why should we factor in ethical considerations when making consumer decisions?

Alisa GravitzAlisa Gravitz: Every time you spend a dollar, it goes to work in the world. Whether you're buying an article of clothing, household staples like food or cleaning products, or a major purchase like a car, your dollars are having an impact. They affect the workers that took part in making that product, the environment that supplied the raw materials and where pollution is dumped and the health and safety of the communities where corporations and contractors locate.

Too often our purchases can end up supporting systems we would never support if we saw their consequences up close: pollution of our air and water, abuse of workers across the supply chain, exploitation of our precious natural resources, and on and on.

It doesn't have to be that way. When we make purchases, we can consider all of the costs: the immediate cost to our wallets, but also the broader costs to people and the planet. We all want a better world for our children and grandchildren. When we purchase from companies that pay their workers a living wage, work to reduce their impact on the environment, and promote thriving communities, we are "voting" with our dollars for a world in which we all want to live.

Voting with our dollars is core to the mission of Co-op America. We work to harness economic power — the strength of consumers, investors, businesses, and the marketplace — to create a socially just and environmentally sustainable society. Our Shop & Unshop website is filled with tips and strategies to help people begin ethical purchasing today.

POV: Some people may be more accustomed to seeing consumer activism through boycotts — is encouraging consumers to make informed, ethical choices as effective? Does ethical consuming accomplish different things?

Five dollar bills, FlickrGravitz: Ethical consuming includes and goes way beyond boycott actions against individual companies, and can include all of our purchasing choices. The first step for many people is to simply rethink consumption. Before you make a purchase, stop to think, "Is this item really necessary?" Lower levels of consumption mean a lower impact on the planet. The second step, then, is when you purchase to "buy green and fair," which involves an implicit boycott of irresponsible companies.

Another step is to tell companies you are concerned about their conduct. Over the years, hundreds of thousands of Co-op America members have sent messages to some of the largest companies in the U.S. that successfully encouraged them to improve their labor or environmental practices.

All these strategies can work together. As an example, many people are concerned about sweatshop labor issues in the apparel industry. To have the greatest impact on this issue, Co-op America encourages them to 1) avoid the worst companies, while 2) joining with other consumers in sending a message demanding better from companies that have poor records on sweatshop labor issues and 3) shifting their purchases to companies that have the highest labor standards and third-party monitoring of their labor conditions. (Many of the companies in this category can be found in our National Green Pages™.)

By taking this multilayered approach, consumers are shifting their dollars to the best companies — helping these companies to grow and demonstrating that ethical practices and corporate profitability can co-exist — while also sending a message to companies with poor labor practices that they need to improve or they will experience damage to their brand and lose market share and profitability.

POV: Can you share some examples of consumer influence helping to improve corporate behavior — labor practices or environmental policies or corporate policies?

Gravitz: As major stakeholders in companies that can have a profound impact on the bottom line, consumers have a powerful voice with corporate America. Research has shown that companies will often make major changes with just a small number of their consumers complaining — sometimes as few as 2 percent — because they know that every consumer talks to at least 10 to 20 other people when they are upset. In today's electronic world, people can put up blogs or send emails that go viral. As a result, there are many examples of companies that listened to their consumers and changed their practices. To name a recent few:

Boycotts and consumer pressure helped pushed both Nike and Yum! Brands (owners of Taco Bell) to acknowledge problems with their suppliers' or contractors' labor practices and begin to make improvements.

Consumer pressure against Home Depot played a major role in stopping Home Depot from selling wood from endangered old-growth forests, and to begin offering FSC-certified™ products made from sustainably harvested wood.

Consumer pressure on Procter & Gamble resulted in greater offerings of Fair Trade Certified™ coffee and convinced Citigroup to end its predatory lending practices.

Co-op America and its members played an important role in these and many other successful campaigns. In most cases we worked with allies in the social investing, faith, environmental or social justice communities to create extensive pressure from multiple stakeholders on the companies targeted. The more stakeholders that raise an issue with a company, the more likely the company will be to listen and then change its practices. Co-op America's role is to make sure that consumers, as stakeholders, understand the important role they need to play in corporate responsibility and mobilize their voices along with those of investors and social and environmental advocates. Our latest action, encouraging GM and Ford to improve fuel economy and reduce global warming, is on our homepage.

POV: How does the idea of ethical consuming or investing fit into day-to-day life? Is it a never-ending commitment, a single factor when making choices, or something else?

Gravitz: Ethical consuming is a joyful and rewarding day-to-day commitment, and it's easy to start taking small steps by picking one area in your life to target. Maybe you start by choosing greener cleaners for your home, or by purchasing only sweatshop-free clothing, or by switching to organic and locally grown food, or by targeting your energy efficiency.

A polluted river outside of Lourdes's house in Tijuana

Lourdes, whose life is chronicled in Maquilapolis, lives in a neighborhood in Tijuana that has not just ordinary sewage running down the middle of the street, but a toxic stew of chemicals and manufacturing agents from the factories on the mesa above their homes.

Whichever area, partner with a friend or make it a family project to research and discover the best options in your category. Co-op America can help you with our resources. Our Responsible Shopper describes the problems with the largest corporations within dozens of categories, National Green Pages lists the greenest companies, and the Real Money newsletter offers green-living tips, with consumer resources attached to each article.

Once you've tackled one spending category, choose another one. It only gets easier, and it's fun and satisfying. It improves your health and quality of life — your organic food is more delicious, your energy-efficient home is cozier and your energy bills are lower. Most importantly, each step you take means a positive return for people and the planet.

POV: Where does one draw the line when pursuing an ethical consumer choice? Are there always tradeoffs or compromises involved? How do we balance our values within a budget?

Gravitz: It's a myth that ethical or green consuming automatically results in spending more money. Those energy-efficient lightbulbs cost far less over their lifetime than conventional bulbs; fair trade organic coffee often costs the same price as other Arabica bean coffees, and a wardrobe that mixes quality used clothing with eco-friendly fabrics sewn under fair labor conditions is cheaper than any clothing shopping spree at the mall.

For example, I recently bought a great used no-wrinkle basic black travel suit for $40 at a vintage clothing store — and a beautiful all-organic cotton suit for $355 that is suitable to wear to negotiate for greater corporate responsibility in any boardroom. That's two suits for $395 — less than $200 each. I'm set for the season. And neither suit needs dry cleaning — which saves money over the life of the garments, and also prevents the harmful chemicals associated with dry cleaning from polluting the environment. With strategies like these, my family has shifted to more ethical clothing purchases while cutting our clothing budget in half!

What's more, often the most ethical choice is to save money and skip a purchase that you don't really need. For example, many of us feel compelled to buy products to give to friends and families for birthdays or holidays, though many of the gifts we purchase go unused. Get creative instead and give a non-material gift — free babysitting or a home-cooked meal, for example. Your gift will be extra-meaningful for its simplicity and thoughtfulness.

POV: The film Maquilapolis focuses on women in Tijuana who work in a factory that makes televisions, and it seems that electronics are a particularly troubling industry when it comes to making ethical consumer choices. Is there a way for consumers to have an impact in a situation where every choice is a difficult one, and there may not be an ideal ethical option?

Gravitz: Stay informed and raise your voice. Tell the companies you buy from that you expect third-party monitoring of their manufacturing facilities and that you won't tolerate sweatshop conditions in the supply chain. Make it clear that you expect them not to just simply fire the sweatshops, but work with their contractors to turn sweatshops into safe workplaces that pay a living wage.

Over the summer, when the British Daily Mail exposed sweatshop conditions in the supply chains of several makers of handheld electronic devices, Apple (one of the implicated companies) sent its own inspectors in immediately afterward and announced they had found conditions that did not meet the company's own supply chain standards. Making sure that consumers react when they hear news of wrongdoing in corporate supply chains is key to pressuring more and more companies to establish codes of conduct and third-party monitoring, and to take labor abuses by their suppliers more seriously. Call, write or email the company and tell them you are outraged. Co-op America's Responsible Shopper and Action Center make it easy for you to contact companies.

POV: Besides making informed choices, how can consumers be active to encourage more responsible corporate behavior that is in line with their values?

Related Links:  (open in a new window)
 

The RoHS Directive stands for "the restriction of the use of certain hazardous substances in electrical and electronic equipment." Read more about this new European Union regulation.

Grist magazine: WEEE are the World
Find out more about how new E.U. environmental standards are changing the global marketplace. (Sept. 2005)

 

Gravitz: First, reach out to others and support them in making their own informed choices. Sometimes, by working together you can accomplish more, and take even more steps for sustainability. For example at your office, school or place of worship you can encourage the purchase of Fair Trade Certified™ coffee and tea — helping to build the market for Fair Trade Certified™ products in the US and teaching a wide range of people about fair trade as an issue. You can also work with others in your community to have a voice when corporations directly impact your lives, such as banding together to prevent polluting power plants from being located in your town.

Second, remember that your investor power can also help bring about more responsible corporate behavior. As a shareholder, you have the power to demand change at companies where you are part-owner and the power to withdraw your investment if the company refuses to improve, and the power to support the growth of responsible businesses. Investors in the clean-energy sector are reporting especially strong returns right now. You can learn more at Co-op America's social investing center.

Third, support organizations that are working for corporate responsibility, and finally, recognize that your informed consumer choices aren't just made in the aisles of a store. Everything you purchase — including the energy used to power your home or airline tickets for travel — has an impact. When you're in the habit of "greening" each purchase you make, it will become second nature to write to your energy company to ask for more investments in renewables, or offset the carbon emissions of your travel.

We invite everyone to join with us at Co-op America in this important work of using our consumer power to bring about greater corporate accountability and to grow the green economy, bringing more and more safe, healthy, eco-friendly products and services to market.

Next: Dan Porter »

Alisa Gravitz is the director of Co-op America.

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