On first inspection the Forbes 500 List shows that big business aren't very progressive. When I look at the top 100 global businesses I'm not sure I see anything I want to invest in. I don't see one name where I think, there, that's the future, they are really making something that benefits us all, in a fair and environmentally conscious way.
Lets start at the top (by revenue): Wal-Mart, Exxon Mobil, Royal Dutch Shell, BP, Toyota Motor, Chevron, ING Group, Total, General Motors, Conoco Phillips or (by profit): Exxon Mobil, Royal Dutch Shell, BP, Gazprom, HSBC holdings, Total, Petronas, Chevron, Total, JP Morgan Chase.
Is it fair to call General Motors a progressive corporation? Are any of the top 100 global businesses progressive? What makes a company progressive? And why does the free market undervalue common sense sustainable green businesses that use fair labor? I'll discuss this and much more after the fold.
As many of you probably know there was a website dedicated to this very topic. BuyBlue.org which if I'm reading past blogs correctly was started by Raven Brooks (terminal3) who's now over at Netroots Nation. They rated companies from progressive to regressive using five categories: labor & human rights, environment, employment equality, corporate and social responsibility and industry practices. Sadly, BuyBlue closed down in the spring of 2007. I'd love to hear from terminal or SallyCat about why it closed down because it was a great idea!
My guess is it closed down because progressive corporations are few and far between. The ones I can think of (and others suggested thanks Bill White + Vladislaw and greenbiz.com) are SpaceX, Trader Joes, Burt's Bees, Odwalla, Koshi, Lowes, Tesla Motors, Google, Patagonia, SolarCity, Tom's of Maine, Whole Foods, Apple and Aptera. There are others but they probably won't be found on the Forbes 500.
I'd like to call Ford, GM and others progressive corporations because they pay union wages and benefits. But, their product is changing our climate, and their management team hasn't tried much to rectify that. Earthsense did a survey that does a pretty good job finding a top 35 companies. There are some that I disagree or am unsure about: Wal-Mart and Microsoft. (They made the list because one of the four metrics used was 'investment attractiveness.')
The Forbes top 100 is dominated by investment banks, oil companies, big box retailers, health care providers, insurance companies and automobile manufacturers. All of which are targets of much deserved scorn from myself and others here. The first corporation on the list that catches my eye is #33 Carrefour. They talk the talk of responsible commerce. My only concern is the business they're in, hypermarkets (department store meets supermarket). That type of commerce is awful for mom and pop businesses. I think the loss of mom and pops as an investment option for middle class people has led to both the decline of the middle class and the impacted nature of investment on Wall Street. Carrefour posted modest profits in 2008, $3.5B on revenue of $151.6B in 2008 (compared to Wal-Mart's $12.7B on $378.9B revenue). They passed the dKos test with flying colors, not a bad thing written about Carrefour in 6 years of diaries.
The next company that might be progressive on the 2008 Forbes list is #37 Siemens. A German based engineering company with modest profits and a strong code of corporate responsibility.
Siemens is committed to exercising responsibility for society in every country in which it operates, so as to help create a secure future for all. Corporate responsibility is one of the levers by which Siemens seeks to promote sustainable business development.
They pledge to cut CO2 emissions for their customers 275M tons by 2011. One 1/4 of their 2008 revenue was from what they call their environment portfolio: fossil + renewable power generation, power transmission and distribution, environmental tech, health care and more. Siemens for the most part passes the dKos test as well.
Here's the Forbes 500 list for 2008. Maybe you can dig around in it and find more progressive corporations than I did, also it's hard to tell who's a responsible corporation, and who's just got that on their website. It's also difficult to determine which companies are progressive in nature, and which just operate out of countries with universal health care and unions.
So I guess my first question might be easily answered; why does doing the right thing by your fellow human being and by nature inherently less profitable? One part of it is that we are concerned about total costs (private and social). This includes externalities.
Standard economic theory implies that any voluntary exchange is mutually beneficial to both parties involved in the trade. This is because if either the buyer or the seller would not benefit from the trade, they would refuse it. An exchange however, can result in additional effects on third parties. From the perspective of those affected, these effects may be negative (pollution from a factory), or positive (honey bees that pollinate the garden). Welfare economics has shown that the existence of externalities result in outcomes that are not socially optimal. Those who suffer from external costs do so involuntarily, while those who enjoy external benefits do so at no cost.
Negative externalities are a large part of what we criticize so many of these corporations for. Anthropogenic climate change and pollution are the two that come right to mind. Wiki has a great list and it's amazing how many of these items are common tags on dKos. The short list if you don't want to take the link is: systemic risk, anthropogenic climate change, water pollution, industrial farm animal production, overfishing, underfunded pensions, nuclear waste. Systemic risk is an interesting one, we bailout many of these companies because of systemic risk. We're worried about the costs to others (in their 401Ks and jobs) more than we care whether certain companies survive or not.
Of course there are also positive externalities, things like education and nutrition, where the consumption of these items provides benefits to all of us. Since the costs of products with negative externalities are social (to all of us, and not to the corporation), there will be a surplus of these. Conversely, since the benefits of products with positive externalities are social they will be under produced in a 'free market'.
I don't blame companies for ignoring external costs or societal benefits, in some cases it would be catastrophic for them to do so. The best way to lose market share is to allow entry, and if you're paying workers a fair union wage, and sensible about sourcing products from non slave labor nations there's room for entry (at least as long as we continue to prefer low price to fair products.)
Second question: If we have our way and pass sweeping progressive reforms, what is to be of these big regressive businesses?
What's to be of a Wal-Mart if their workers unionize? One school says that they will lose their market share. Sam Walton in his autobiography describes how his business was struggling until he decided to slash his prices. He'd cut his profit margin razor thin, and the low prices would bring word of mouth business. Unlike his children he did that out of necessity. The other school of thought is that by paying workers fair wages, they will have more to spend.
We could do this over and over again. What's to be of Exxon Mobil if we move to hydrogen fuel cell, electric and solar powered cars? What's to be of Coca-Cola if sugar gets a little bit of the big tobacco treatment of the 1980s? What's to be of JP Morgan Chase when depression era regulations are made law again? How about insurance companies, HMOs, PPOs and all the other middlemen of the health care crime industry? To me these are thrilling questions.
If we don't pass progressive reforms, what can be done to build a profitable progressive corporate force? How can we move some of these progressive businesses onto the Forbes 500 list for 2010?
As we've seen from this past week, it's not going to be easy to get our agenda completed. With less than sixty votes in the Senate little may- be accomplished. Not only that, but there's immense media and corporate pressure to keep common sense out, and let the profit-only motives continue. If things don't go our way with massive reforms like universal health care and the Employee Free Choice Act, how can we promote good corporations like Whole Foods, Tesla Motors and Google? And what can we do to affect market conditions so similar corporations will develop? Part of this is speaking with our wallets like BuyBlue.org intended. Corporations tend to go where consumers demand them to (check my tip jar to see how green energy/products are responding) Green products are somewhat easier to promote than those produced with fair labor practices or other qualities we desire.
I'll leave these very difficult questions to you, and to future diaries.
Thanks if you made it this far ;)
PS: One progressive company (or at least a progressive owner) just disappeared. That's because the owner Leonard Abess Jr. sold the Miami-based City National Bancshares last November. He then proceeded to take $60 Million of his own money and chop it up with his 399 workers (who continued on with the new bank). Now that's doing the right thing! I begged for this type of responsible action in a blog from May 26th of 2008.
Is it impossible to imagine a world where a CEO says, "you know what I don't deserve a 400 million dollar bonus this year." I think maybe 50 million, and take the other 350 and chop it up with the 75,000 employees of this company. (That would give them a $4600 bonus each) Why is that a radical idea?
UPDATE: Here's the list of 35 that greenbiz.com put out. Obviously some of these are green, BUT NOT PROGRESSIVE.
Amazon, Apple, Benjamin Moore, Burt‘s Bees, Discovery, Earthbound Farm, E & J Gallo, Fresh & Easy, General Electric, Google, Green Mountain Coffee, Hain Celestial Group, H. E. Butt, Hess, Kashi, Kraft,
Lowe‘s, Method, Microsoft, MOM‘s, Odwalla, Peet‘s, Publix, Sinclair Oil, Stonyfield Farm, Target, Tesla, Tom‘s of Maine, Trader Joe‘s, United Natural Foods, Wal-Mart, Walt Disney, Wegmans, Whole Foods, Yahoo
UPDATE 2: It's clear that Costco is a progressive Corporation. See this comment by wondering if, that explains why.
UPDATE 3: Amazing coincidence BenGoshi wrote a diary that really couples well with this one at about the same time I wrote mine. "Pro Business". We need to talk. This quote is priceless...
(h/t to Otteray Scribe):
[T]he word "corporation" has become conflated in some folk's mind as Enron, Exxon, Circuit City and Wal-Mart. Or the mega-banks. They forget the mom and pop operations like us who have a few employees and a small budget. One would be an idiot to run a small business without incorporating.
I am fully in favor of stiffer regulation, much like Presidents Theodore and Franklin Roosevelt put into place.