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Really Good Business: Beyond Social Responsibility Report Cards

Dwindling resources impels companies with no special predilection toward doing good, to get good, and fast—and work together with peers to do so.

We’re grateful when we hear Patagonia touted as a model of responsible business practices, but it also shames us a little. We know how little distance our company has traveled toward anything resembling sustainability and how far we, all of us, have to go. As we have pointed out in our book The Responsible Company, even a relatively benign Patagonia fleece jacket, made of 60% recycled and recyclable polyester, generates 24 times its weight in carbon emissions and one-third its weight in waste.

Is business doing enough, fast enough, to slow, then reverse the harm done to the planet, let alone provide fair pay and decent treatment to workers throughout the supply chain? No. Does it make sense, then, to keep up, and intensify, efforts in business to reduce the environmental and social harm we do? Absolutely.

Granted that every business faces competitive pressure and rising costs, and does daily battle with the worm that eats the bottom line. Few businesses succumb to the temptation to pay better than minimum wage to supply-chain workers on the other side of the planet. Most businesses still resist paying the true cost for nature’s “services” while they can still be bootlegged—and depleted— for free.

But businesses also face countervailing pressures: not to do good, necessarily, but to do less harm. Universities and other institutions regularly divest their endowments from companies known to violate human-rights laws. Neighborhoods organize to prevent a new big-box mall from breaking ground. College students, including many business students, don’t want to work for companies they regard as immoral—or amoral or deceptive. Consumers under 45, who have never known a year without an Earth Day, decline to buy from companies that clear-cut rainforests. NGOs call on tens of thousands of members to pressure businesses to alter their practices on any number of issues. Standards organizations, foundations, and even some of the largest corporations in the world now call for the adoption of Triple Bottom Line bookkeeping that requires businesses to at least account for harm done to the Commons.

Fifteen years ago almost no corporation issued a social-responsibility report; now 90 percent of the top 300 do, to standards that demonstrate year-to-year whether environmental and social performance has advanced, declined or stood still. This increased transparency, in our view, raises business IQ because in the clearer light and fresher air companies are compelled to not only examine their practices but improve them.

The strongest countervailing forces at work are not social but natural. Coca-Cola, one of the world’s largest industrial consumers of water, has teamed with The Nature Conservancy to ensure a future, potable supply. Lockheed Martin worries where it will get the 36 miles of copper wire that must go into each F16. Every big company has become aware of the constraints nature will impose in a world forty years from now with two billion more people and potentially billions more engaged in our high-consumption economy. Everyone knows that resources, as they grow scarcer, will become more expensive. Waste will become prohibitive. This impels companies that have no special predilection toward doing good, to get good, and fast—and work together with peers to do so.

Patagonia is a member of the Sustainable Apparel Coalition, a group of companies responsible for a third of the planet’s apparel and footwear business, in an effort to rank products according to their social and environmental performance—and to build those rankings into member company’s planning systems. This leveling of the playing field is a good strategy for each, and advances all a step toward sustainability. For no good reason, other than the dawning recognition that, all else failed, it’s time to do the right thing.

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