Business Ethics magazine ends each year by recognizing a handful of companies that shine a bright light on our future by their genuinely good hearts, right actions, and thoughtful stewardship.
Congratulations to this year’s recepients:
* Clif Bar Inc. (Berkeley, CA.), winner of the General Excellence Award for its thorough commitment to environmental sustainability, employee well-being, and community involvement.
* Gap Inc. (San Francisco, CA.), winner of the Social Reporting Award, for taking social reporting a quantum step forward by risking unprecedented honesty in reporting on factory conditions.
* King Arthur Flour (Norwich, VT), winner of the Social Legacy Award, for handing down to employee owners a centuries-old tradition of purity, for customers and the environment.
* Dell, Inc. (Round Rock, TX), winner of the Environmental Progress Award, for responding to stakeholder concerns by introducing industry-leading computer-recycling initiatives.
* Chroma Technology Corp. (Rockingham, VT), winner of the Living Economy Award, for exemplifying the emerging “living economy” with practices of employee ownership, fair wages, and environmental stewardship.
Gap Inc.: Social Reporting Award
Applause met Gap Inc.’s May 2004 release of its path-breaking Social Responsibility Report, which examines how well factories around the world are complying with Gap’s vendor code. What is noteworthy about the report is its unprecedented level of candor, disclosing health and safety infractions discovered in visits by the company’s Global Compliance Team to the 3,000 factories that produce Gap Inc. apparel in 50 countries.
The report disclosed that in Africa, for example, over 50% of factories had machinery without adequate safety devices, while in Mexico up to 25% of factories paid less than the minimum wage. A majority of factories used in China stored hazardous materials inadequately.
“The Gap took a tremendous risk in doing this report,” says Ruth Rosenbaum, member of the Public Reporting Working Group, a social investor group that worked with the company for two years to develop this report. “They didn’t know how Wall Street or the garment industry would receive it. So far, it’s been fairly positive.”
Stacey Krum, part of the Gap team which produced the report, acknowledged that executives fretted over the release of such telling detail. “Were we going to open ourselves to greater scrutiny?” asks Krum. “Today, we have no second thoughts. The reception has been very positive. Other companies are now feeling more confident about doing the same thing. We have seen an increase in representatives from other companies coming to talk to us about what we’re doing.”
While the report itself is admirable, the factory conditions it reveals are not. As Rosenbaum puts it, “No company has enough leverage to solve this by themselves. The factories know that a company such as the Gap is only a piece of their total production.”
The company makes it a policy to pull contracts from factories with serious deficiencies. In 2003, 136 factories previously working for Gap were removed from its list of eligible manufacturers. Hundreds of additional factory bidders were rejected for wage, safety, and environmental policy violations. Gap’s vendor code is not greatly different from others; “it is our level of enforcement that is different,” Krum says.
Gap joined the Ethical Trading Initiative and Social Accountability International’s Corporate Involvement Program, both of which aim to improve labor conditions and advocate a universal code of conduct. Krum said, “The company now believes an ‘across-the-board universal code of conduct’ is needed. “That’s the best way to leverage the good work of individual companies.”
Chroma Technology Corp.: Living Economy Award
Now in its third year, the Living Economy Award was created to recognize companies that are bringing into being the new economy we seekthe living economy, where firms are locally rooted, human scale, stakeholder-owned, and life-serving.
Chroma Technology has been fastest growing technology company in Vermont for the past five years. They are 100% employee-owned and started out that way from the very beginning. Virtually all 68 employees living within a 50-mile radius. Most unusual is the firm?s flat pay scale, where no employee makes less than $37,500 and no one more than $75,000. Thus no top-level specialist makes more than twice anyone on the shop floor.
Founded in 1991 by six people with $180,000 in financing, Chroma is today a premier manufacturer of optical filters for microscopes used by the world’s top biologists and is expecting sales of $16 million in 2004.
The disadvantage of this flat pay structure, Paul Millman, CEO says, is that some people with graduate degrees or business experience won’t work there, because they’ll be paid the same as someone in production. The advantage is the cooperative atmosphere, the self-direction, and the lack of a managerial class.
At one time the company made decisions through a Quaker meeting format where consensus ruled, though that’s being revisited now that there are more employees. Still, there are no designated managers at Chroma, and employees occupy all seats on the board of directors.
More than 95% of company decisions are made on the shop floor. “We call it full exposure management,” says Gabe Capy, a member of Chroma?s shipping department who has been with the company eight years. “It is peer pressure that then encourages people to perform.”
On the environmental front, Chroma recently invested $130,000 to make its new 28,000-square-foot factory energy-efficient. The company will recover those costs in less than two years through savings in electricity and propane costs. “They have gone far beyond the efficiency measures associated with standard building practices,” says Gabe Arnold, technical coordinator for Efficiency Vermont, a statewide energy efficiency utility.
Dell, Inc.: Environmental Progress Award
You may have seen the ads in summer 2004: purchase a new Dell computer and recycle your old computer system at no cost. That limited-time offer is just one example of Dell’s recycling initiatives – including a low-cost consumer home pickup and recycling service, a computer recycling grant program to local communities, and a computer collection pilot program in its hometown of Austin, Texas.
For 2005, Dell has announced an aggressive aim of a 50% increase in global product recovery, making it the first company to publicly release a computer-recycling goal.
As Dell has grown to a leadership position in its industry it has been under greater pressure to begin computer recycling. Says Pat Nathan, Dell’s sustainable business director, “After the SRI community began a very candid dialogue with us on recycling, we realized we were not doing enough.” Nathan estimates that Dell recovered less than 10 percent of its products that had reached the end of their life. And she knew that had to be improved.
The threat of a shareholder resolution being filed helped to get the attention of Dell’s upper management. “To their credit, they took a positive step,” commented Conrad MacKerron of the As You Sow Foundation. “Dell now sees recycling as a profit center,” he says.
MacKerron was part of a dialogue that began in 2001 between socially responsible investing (SRI) organizations and the four largest computer manufacturers: HP, IBM, Apple, and Dell. “Over the course of the negotiations, Dell emerged as the market leader,” he says. “Since the
y were a newer company and didn’t have the environmental infrastructure of some of their competitors, they were open to learning from the SRI community and working with us to build the internal infrastructure for a long-term commitment to recycling.” It took two years of working with the SRI coalition to develop a comprehensive recycling program, which was announced in the spring of 2003, followed by the recycling goal announced in May 2004.
Clif Bar Inc.: General Excellence Award
Imagine that you are an entrepreneur who started a company in your kitchen with $1,000 and now, years later, you are being offered $120 million for that company. That was the deal Gary Erickson of Clif Bar Inc. was about to close in 2000. At the last minute, he walked away from it. He had learned that the purchasing company would be moving Clif Bar to another state and letting all its employees go. Erickson realized he was selling not only his company but his integrity and his vision. He took back the reins of Clif Bar – facing off against competitors like Nestle and Kraft.
Today Clif Bar is a $100 million company with new products like Luna Bars, Clif Shots, and Mojo Bars, hailed by Inc. magazine as one of the fastest-growing private companies in the nation four years in a row.
The company’s greatest strength, says Erickson, is “our collective vision, the belief we’re all working for something beyond the bottom line.”
The decision to keep his company also prompted Erickson to become a pioneer in sustainability. “We didn’t even have a formalized environmental policy before I made the decision to keep the company. We didn’t use organic ingredients, our recycling program was limited, and we didn’t pay attention to the type of power we were using.”
The company became the first energy bar to be certified organic, with 70% organic ingredients. It bought organic cotton T-shirts, reduced the use of shrink-wrap in packaging, and began educating the public about global warming. “Last summer, our marketing staff organized the first ever climate-neutral, bio-diesel, mobile marketing tour on the East Coast, and I really had nothing to do with it. That just shows how sustainability has been integrated into our culture,” says Elysa Hammond, staff ecologist.
In the journey to sustainability, Clif Bar Inc. readily acknowledges there are miles to go. “Today, our primary packaging – the wrapper – cannot be recycled and is not yet comprised of compostable materials,” Hammond says. “But we’re working on that. We’re looking at packaging as a whole system.”
Clif Bar employees discovered that secondary packaging such as processing, shipping, storage, and point-of-purchase displays were behind most of the company’s waste. They eliminated the need for 90,000 pounds of plastic shrink-wrap, and switched to 100% recycled paperboard for its production of caddies.
Employees enjoy a flexible work week, a six-month sabbatical program, and dependent care assistance. In 2001, the company launched a community service program allowing employees to volunteer on company time, delivering Meals on Wheels, building homes with Habitat for Humanity, and serving at camps for disabled children.
++++
To nominate your own company or another company for next year’s awards,
visit: www.business-ethics.com/awards.htm. Deadline: June 1.
Excerpted from the Fall 2004 issue of Business Ethics, a SustainableBusiness.com Content Partner. Visit their website to read the full article
Loading...