The power that consumers have to affect corporate behavior, whether it is global warming, employee health or the size and color of a widget, is greater than any other market force. Seventy percent of the American gross domestic product is driven by consumer spending and if you want to know whether “buying green” is effective just look how companies are advertising their sustainability efforts.
The record is depressingly replete with examples of how some corporations break our laws, foul our air, mistreat their employees (and communities where they manufacture), attempt to purchase our electoral system and otherwise disperse and avoid responsibility for their “externalities”. Economic reality
This summer the federal government (Justice Department) released a settlement in it’s case against GlaxoSmithKline – yeah that one, the Pharmaceutical giant. Among it’s incredibly numerous criminal actions it helped publish falsified data in a medical journal, failed to report the dangers of a drug and used “favors” like trips to Jamaica to persuade doctors to use its medications for unapproved — and unproven — purposes on children.
Now the federal government announces that it won’t issue new contracts to oil giant and convicted felon (guess corporations are people) BP citing its “lack of business integrity” during the Deepwater Horizon disaster that killed 11 people and caused the biggest offshore oil spill in U.S. history. Oil rig supervisors Robert Kaluza and Donald Vidrine are facing manslaughter charges for the deaths of workers after allegedly ignoring potentially obvious signs of trouble and former BP executive David Rainey was charged with hiding information from Congress about the amount of oil gushing from the well. The company will pay $4.5 billion in what is the largest fine ever levied on a corporation in the United States BP’s Chutzpah
To be sure there are a growing number of businesses which are attempting to “do well by doing good”. Whether it is Patagonia, New Belgium Brewing, Interface or the proliferation of organic firms making profits while increasing social capital, the power of economic forces often dwarfs, and certainly moves quicker than the too often woefully slow, inept and dysfunctional government.
Just like the unrealized but boundless power we have as voters, the ability to effectuate change we have as consumers is without compare. Economic incentives are perhaps the most powerful way to change behavio, and are used everyday for societal good, and, well…bad.
Start with plastic bags. Environmentalists have been searching forever for ways to induce shoppers to use fewer of them. Turns out naming, shaming and moralizing don’t hold a candle to straightforward pricing. Charge 15 eurocents per bag and watch Ireland’s bag consumption plummet by 90 percent. That’s one billion bags a year. In 2010, Washington, began charging 5 cents per disposable bag — paper and plastic — and bag use fell more than 50 percent.
The power of th purse
But consumers are only able to use their market power-and, in turn, influence corporate environmental behavior-if they can make an informed choice when they shop. They need to be able to easily identify products that have been produced responsibly-such as organic food or sustainably grown lumber-and to distinguish between valid and spurious claims of producers. To meet this need, some independent organizations and governments have begun to certify and “eco-label” goods produced using sustainable practices. World Resources Institute
The power we have, while fear inducing and strategically important to any business which deals with consumers, is at the same time like turning up the heat and leaving the front door open.
Sure, there is a chasm between Americans’ stated concerns about the environment and our actual purchases. American consumers are famously profligate, distracted and manipulated by billions of dollars of advertising.
Efforts to educate and empower “conscious consumption” that would advance more environmentally friendly (and socially responsible) products are thus critical for aligning peoples’ values with their market actions; creating incentives for firms to change their products and supply chains; and moving people from simply consuming to working as citizens for broader reforms of the marketplace.
There are of course many examples of consumers buying “green-washed” and “eco-chic” products that make them feel better, but that aren’t actually better for the environment. (Would you like a bottle of Fiji water while you drive your new Chevy Tahoe hybrid?)
Helping people align their values in the marketplace can help them move from individual acts of consumption to broader collective reforms, and to participating in exactly the types of democratic processes that can lead to solving our environmental problems. NY Times
Want to punish BP and dissuade others from the same behavior? Stop buying BP gasoline (including ARCO). The power is ours. If you condemn their actions but still buy their products it becomes merely a cost of doing business.