Building an Ethical Business Isn’t About Company Culture
Businesses need to fundamentally change the ways they operate, and soon.
When browsing articles that discuss building an ethical business model, they often point to the same thing to focus on improving: company culture. Ethical business owners should tell their employees exactly what they expect, and enforce their policies with strict reprimands if someone steps out of line. Make sure as a CEO or founder, you abide by the ethical standards you set. Be honest, be transparent, have integrity. Refine an internal reporting system so that whistleblowers’ identities are protected and those who suffered from an ethical breach are swiftly helped. Oh, and have a nap zone in the office in case your employees get tired.
All of this is important (especially the nap zone), and in an ethical company, culture is integral in order to maintain values of equality and fairness in the office. But it doesn’t get to the core of the issue: that businesses themselves need to drastically evolve in order to change the system in which they operate. If they don’t we will all suffer —though admittedly, those at the bottom of the pile far more than those at the top.
Take the current climate crisis as an example. Sure, there are plenty of huge businesses that don’t give a toss about it — Bayer, particularly its subsidiary Monsanto; Shell and BP; basically any of the big food production companies — but plenty of the smaller ones don’t, either. The company I work for switched to Greenpeace energy at the end of 2019, and we had our first-ever meeting about how we can make the office more environmentally friendly — after two of my colleagues and I had been pushing for steps like this since we joined two years ago — in January of this year. We are a ten-person team with a couple of board members that’s been active for little over a decade: it’s not as though changing to a green energy supplier and getting people to recycle is a massive change across offices in every corner of the world. And yet, it’s only just happened.
What really needs to happen is a fundamental system change outside of the office. New businesses that want to call themselves ethical need to make pledges to use no plastic. They should be making their supply chains as low-carbon as possible, and that is possible by seeking the help of professionals in the area of sustainability and making sure your business only works with other green companies — even if that means accruing more cost. It’s perhaps no surprise that businesses that don’t become carbon neutral soon will lose out financially, but one solution would be for companies to be fined if they aren’t being green, and that money is used for carbon offsetting.
According to some reports, over 70% of all greenhouse gas emissions for nearly a quarter of a century can be traced back to just 100 companies, and more than half to just 25 corporate- and state-owned entities. It is these companies that need to change, far more drastically than you need to remember to turn your hallway light off — but smaller companies aren’t to be let off the hook.
Take Patagonia as an example. Not only does the company commit 1% of its profits to environmental causes, but it has also undertaken many causes over the years, including making complete children’s lines out of discarded fabric used for other items of clothing, reusing the fabric from unsold items of previous collections, and designing its clothes so they don’t get worn out quickly. The issue of throwaway culture underlined by this last point has been in the news recently, with the European Commission issuing new rules meaning products must be made to last, rather than to break down at some point, forcing the consumer to buy the latest product. Top-down change is the only way to alter the fundamental state of climate change affairs.
And what about other ethical issues, like tearing down supply chains that rely on slavery to make products? The consumer isn’t the problem, because the consumer will buy whatever is on offer to them. When Nike started pledging to stop using sweatshop labor through an auditing system of its own creation, factories that didn’t conform to its (relatively low) standards were threatened with a halt on production if they didn’t improve their treatment of workers. This is the first step but obviously it isn’t enough. If the supply chain was more strictly controlled, Nike wouldn’t need to use sub-contracted factories for its products and could better control the standards of the factories in which it makes its products. It’s too much to ask Nike to take the financial responsibility for this itself, but would consumers stop buying Nike even if the brand became slightly more expensive as a result? It seems unlikely.
This is why arguments for local businesses, which totally control the way in which their products are created meaning they can be as ethical as they want, are so compelling. The problem is, local produce simply isn’t affordable enough for many people to purchase — they have to go to big companies with lower ethical standards, which forces them to be a part of the problem. A good example is the meat industry, which offers both high-quality, expensive meat — stuff people can afford, say, once a week, unless they’re particularly well off — as well as much lower-quality meat, from farms with dreadful conditions, which is affordable for even the poorest of consumers. What’s the solution? Convince people to eat less meat? The rate of vegetarianism in the Western world has been increasing over the last few years, but not to the point where enough people are eating little enough flesh that companies are forced to stop providing cheap meat. A future in which everyone is vegetarian, or at least reducetarian, looks a long way off.
It’s clear the solution lies with businesses rather than with consumers in this instance, too. Consumers who can’t afford it won’t buy overly-expensive meat, however bad the conditions are for animals which produce cheap meat — after all, they can’t afford it, so they have no choice but to buy the cheaper alternative. The answer to this problem is both ethical and technological. If the meat industry placed more value on the quality and treatment of animals than on profit, less cheap meat would be produced, forcing consumers to eat less. Of course, those with more money would be able to buy the same amount of meat — but some studies suggest richer people actually eat less, more expensive meat than those who aren’t as well off. The technological side is, predictably, cultured meat. Unfortunately, people are put off just from the thought of chomping into something made in a lab (although, newsflash, loads of your food is made in labs). But if cultured meat was all that was on offer, consumers would either give up meat altogether or be forced to buy it.
The problem is that the received wisdom for businesses is that they need to drive value to the customer, often whatever the cost to the environment or ethical standards. This is the idea that needs to change. The solutions are readily available for businesses to become more environmentally friendly, more ethical, and more morally focused, and as it becomes more important to the general public, it will also become more essential for those businesses which want to remain competitive.
But consumers don’t want to change soon enough. It’s time for businesses to start forcing consumers to become more ethical, and not the other way round. Waiting for consumers’ demand to change the market is too slow to facilitate the transformation this world needs to see. People will consume whatever is on offer to them, whether that’s unethical products that are destroying the planet and are produced in opposition to moral values, or, at a little extra monetary cost to business and consumer alike, things we can be proud to purchase because they make the world just that little bit better. I know which I’d rather buy.