Social Responsibility in Business Featured Signal of Change: SoC1023 July 2018

Author: Carrie Hollenberg (Send us feedback.)

Societies can maintain for centuries a set of social values—for example, honesty, patriarchy, individuality, and sacrifice—that act as guides for the way people in those societies live. But once in a while—possibly more often in a globalizing world than in an isolationist one—certain social values seem to reach a tipping point and then shift in new directions. Such a shift occurred in the United States in the late nineteenth and early twentieth centuries when the core meaning of equality shifted beyond white men to include African American men and eventually women—at least with respect to their right to vote. Societal values' changing in meaning or seeing replacement altogether often has an impact on business practices. Corporate leaders can capitalize on such social changes by reevaluating whether their companies' business practices are appropriately socially responsible and deciding either to hold on to established practices or to integrate new ones.

Being socially responsible is not without its risks.

On 14 February 2018, a gunman killed 17 people at Marjory Stoneman Douglas High School (Parkland, Florida). By some counts, this school shooting was the 208th in the United States since the 1999 attack at Columbine High School (Columbine, Colorado). This time, the citizen and political reactions were stronger than they had ever been. The antigun reaction among students was robust and coordinated and led to greater-than-usual media attention, motivating students across the country to demonstrate their concerns, inspiring gun-control advocates to donate more money, and mobilizing focused gun-control campaigns on social media. A number of companies also took a stand. Delta Air Lines (Atlanta, Georgia), United Airlines (United Continental Holdings; Chicago, Illinois), Enterprise Rent-A-Car (Enterprise Holdings; Saint Louis, Missouri), Hertz Corporation (Hertz Global Holdings; Estero, Florida), Symantec Corporation (Mountain View, California), and MetLife (New York, New York) canceled long-standing discount arrangements with the National Rifle Association of America (NRA; Fairfax, Virginia), which advocates gun rights. Other companies abruptly changed their policies concerning selling firearms and ammunition. Dick's Sporting Goods (Coraopolis, Pennsylvania) announced that it would no longer sell assault-style rifles and would raise its firearms-purchasing age from 18 to 21. Kroger Company (Cincinnati, Ohio), L. L. Bean (Freeport, Maine), and Walmart (Bentonville, Arkansas) announced that they would no longer sell firearms and ammunition to anyone younger than age 21. REI (Recreational Equipment; Kent, Washington) and Mountain Equipment Co-operative (Vancouver, Canada) announced that they were no longer placing outdoor-equipment orders with supplier Vista Outdoor (Farmington, Utah) because it manufactures guns (the company has since announced that it will cease firearms production).

In late 2017, the #MeToo movement took the film industry in Hollywood, California; media industries; and then US politics by surprise. Encouraging women to report accounts of sexual assault and harassment publicly, #MeToo opened the proverbial floodgates as women in the entertainment industry and then in other professions poured out personal stories of abuse. After centuries of both women's and men's mostly looking the other way when sexual harassment occurs, US businesses and political parties were suddenly losing important leaders and employees. Numerous wealthy and powerful corporate men who previously enjoyed protection because of unspoken social norms were losing their jobs and sometimes their companies in the face of public accusations—even before facing judgment in court. Time's Up (www.timesupnow.com)—an organization that emerged shortly after the #MeToo movement took off—put teeth behind the storytelling, providing strategies to increase women's representation on corporate boards, to systematically change US laws pertaining to sexual harassment and assault, and to increase victim access to legal services. Interestingly, attention has focused also on the less prevalent incidences of sexual assault and harassment of men by women. Business has an opportunity to take a leadership role in finding innovative ways to stop work-related sexual abuse, to help resolve the disconnect between women and men about what sexual harassment actually is, and to derive increased economic benefit from employing productive men and women.

The shifting of values concerning humans' impact on Earth's environmental health creates opportunities for socially responsible business solutions. Erik Does, chief executive of Dutch organic-food-supermarket chain Ekoplaza (Veghel, Netherlands), recently acknowledged that customers do not approve of plastic packaging. Working with an environmental group that is campaigning to reduce plastic pollution, Ekoplaza opened the world's first plastic-free aisle in its Amsterdam store in early 2018 and has plans to open similar aisles in all 74 of its stores by the end of 2018. Similarly, Unilever (London, England, and Rotterdam, Netherlands) is changing the composition of the tea bags from its PG Tips brand in an effort to reduce plastic waste. Tea bags typically contain nonbiodegradable polypropylene for sealing and strengthening, but Unilever is moving toward producing plant-based, fully biodegradable tea bags. Although individual tea bags are small, the Beverage Standards Association (Waterlooville, England) estimates that people in the United Kingdom drink 62 billion cups of tea per year and brew most of this tea from tea bags, not loose tea. Yorkshire Tea (Bettys & Taylors Group; Harrogate, England) also is developing plant-based and biodegradable tea bags.

Sometimes legislation in one country forces businesses in certain industries to adopt more responsible behavior, which can motivate businesses in other industries or countries to adopt more responsible behavior voluntarily. In February 2016, France became the first country to pass legislation that requires supermarkets of a certain size to donate unused food or pay a fine. Since it passed this legislation, France received the top ranking in the 2017 Food Sustainability Index (http://foodsustainability.eiu.com). Perhaps other nations will follow France's lead and implement similar laws to reduce food waste.

Being socially responsible is not without its risks. In an effort to be transparent, Apple (Cupertino, California) prepares and publicly releases an annual report about the labor practices of its worldwide suppliers. The 2018 report (which covers 2017) reveals that the number of "core violations" Apple found in 2017 is double the number it found in 2016. Furthermore, three of these violations were debt-bonded labor violations, which the United Nations considers a form of slavery. Apple requires its suppliers to follow a code of conduct that emphasizes not only human rights but also environmental responsibility and sound business practices. Suppliers must address violations and take steps to prevent them from occurring again, and Apple may cut ties with suppliers that do not conform. Transparent audit-reporting practices very likely improve working conditions, but they also give the press easy access to negative findings that can result in public-relations black marks. During periods in which long-held social values begin to shift, businesses must consider the benefits and risks of assuming greater social responsibility.