A Black Mark for Primark

In our international tracking surveys on corporate social responsibility, we often ask our respondents to name an individual company that is fulfilling its responsibilities to society particularly well – or badly. They usually find it difficult to do so – often, nearly half can't name any standout company. In most countries, it's rare for any individual company to be mentioned by more than 10% of respondents, and revealingly, it's often the leading consumer brands that crop up at the top of both lists – their strengths and flaws are just more visible.

But occasionally, a new name emerges. This has happened in the UK this year, where budget clothes retailer Primark has shot to the top of the list of irresponsible companies in our latest survey. The six per cent who point the finger at Primark may not sound like many, but it's enough to move it ahead of controversial names such as McDonalds, Exxon and Nestle. It's clear that media coverage of some of its questionable business practices, notably the exploitative use of immigrant labour and child workers, has cut through the noise. And it's particularly notable given that Primark is part of a sector that – perhaps surprisingly – isn't seen as one of the more irresponsible industries out there.

Primark has since announced that it has sacked three of its Indian clothing suppliers, who it accuses of perpetrating 'wholesale deception' in their dealings with the retailer. This action might reassure some – Gap, for one, seems to have managed to shake off a reputation for using child labour thanks to a programme of factory monitoring and a high-profile PR campaign. (Whether it deserves to be off the hook is another matter.)

But others may conclude that if they can still buy a Primark t-shirt for less than the cost of the cappuccino they have afterwards, someone, somewhere, is bound to be losing out.

The Perils of Greenwash

Received wisdom has it that one of the major casualties of the economic crisis has been consumers’ enthusiasm for the ethical and green product lines that have made such strides over recent years.

Our latest global tracking data is telling us otherwise, and in fact suggests that ‘ethical consumers’, who look to reward responsible companies and punish irresponsible ones, are more numerous than ever. But what’s also clear is that there is growing disappointment in a number of key markets – Germans are particularly downbeat – about companies’ performance in being responsible, particularly when it comes to environmentally-friendly products. Many consumers are sensing that the increasingly bold claims that are being made for products’ environmental credentials aren’t always justified. In 2008, for instance, the UK’s Advertising Standards Authority upheld a record number of complaints about environmental claims. Greenwash is alive and well, it would seem.

An interesting new report by Consumer Focus adds weight to this argument and makes clear what’s at stake – if consumers don’t trust the claims that companies make, they become reluctant to exercise their green purchasing power as they don’t know who to believe. Which doesn’t bode well for the prospects of building a low-carbon and sustainable economy.

Consumer Focus’ recommendations for advertisers (and those who regulate them!) in generating confidence and trust in green claims are that they should be clear and easy to understand; that they should be credible (realistic, accessible and verifiable – they have to mesh not only with what consumers already believe about the brand and the wider market but also with their existing beliefs) and comparable (providing simple, meaningful and like-for-like comparisons).

Iran: The Right to Pick a Lousy President

Two weeks after the Iranian election, and it looks increasingly likely that Mahmoud Ahmadinejad will remain as president, at least for the time being. The crackdown on the activities of protestors and opposition activists continues, and it seems certain that the Council of Guardians, the group of senior clerics charged with signing off the election results, will give them their blessing when they deliver their final ruling on Sunday.

The widespread conclusion of many in the West has been that a monstrous injustice has been perpetrated on the Iranian people, who are being denied their rightful president thanks to widespread vote-rigging. Hasn’t the Council of Guardians already admitted that three million voters not on the electoral roll somehow managed to cast a vote? Doesn’t this prove that it was in fact challenger Mir Hussein Mousavi wot won it?

Maybe, but I’m not so sure. Conducting independent and reliable public opinion polling in a country like Iran will always be a challenge, and there has certainly been no shortage of ‘voodoo polls’ whose methodology is unclear and results sometimes bizarre. But there have also been a number of reputable surveys conducted over the last month, and most of them suggest that Mahmoud Ahmadinejad in fact enjoys a substantial majority of support across the country as a whole. Others are in the pipeline.

The most widely publicised, conducted in late May by Terror Free Tomorrow, found that Ahmadinejad enjoyed more than a 2 to 1 advantage over Moussavi – comparable to the result of the disputed election. Now, TFT’s methodology has been criticised – their interviewers could only speak Farsi, whereas many Iranians can’t – but the findings are also in line with regular national polling carried out by, among others, Tehran University.

In contrast, many of the polls that put Moussavi ahead were Tehran-only, as this Wikipedia page shows. Tehran is very, very different from the rest of the country. It has a large number of educated, Western-oriented and relatively liberal elites - largely Mousavi voters. In contrast, whole swathes of rural Iran are conservative, highly religious and poorly-educated, with much of the population lacking a basic education.

Now, Ahmadinejad is not everyone’s cup of tea. He may even be, as a colleague of mine put it, a 'jackass'. But he has a worldview that, for various reasons, appeals to a great number of Iranians. This is still the country that ejected the Shah in 1979. Even election fraud on the scale reported (and we’re not talking Zimbabwe here) can’t explain away the huge Ahmadinejad advantage.

It looks like Iran may have actually intended to elect the 'jackass'. Shouldn’t they have the right to do that if they want to?

CSR - Reaching Beyond the Converted

Some straws in the wind about the way businesses’ approach to CSR is evolving during the downturn. A colleague who attended this sustainable business conference last week tells me that there were two distinct approaches in evidence among the companies represented there – well-established CSR departments with significant numbers of staff and large budgets, but also some small, senior teams with no earmarked money to spend who are dispersed and embedded within other functions. In the latter case, the lack of budget explicitly for CSR is because it has (so it’s claimed) been fully integrated into the company’s core strategy.

This sounds like an enlightened approach and should mean that CSR starts to emerge from its ghetto. Presumably, though, the businesses represented at last week’s conference are ‘the converted’, who are sold on the merits of CSR already. The same could be said for the companies who participated in Business in the Community’s Corporate Responsibility Index released last week.

It found that nine out of 10 participants are having ‘substantive discussions…at board level’ about CSR, investment in people and long-term sustainability. BITC's Stephen Howard himself acknowledges the paradox that this apparent success for CSR within businesses comes at a time when many commentators have been highlighting the lack of effective board-level oversight in many companies. His explanation is that, while CSR has indeed made it onto the boardroom agenda, in reality it’s still disconnected from discussions about strategy and operational issues.

Perhaps the very fact that we can still talk about CSR as a ‘thing’ that companies need to do gives the game away – for most companies, it’s still not really seen as central to the core purpose of their business.

Filling his Boots

Losing billions of pounds as the CEO of a major bank is no obstacle to furthering a stellar business career, it would seem. The Guardian reports that Andy Hornby, former chief exec at HBOS, is to be installed at the helm of major British pharmacists Alliance Boots. HBOS, you may recall, nearly collapsed at the height of the financial crisis last year, was swallowed up by Lloyds TSB, and ended up being bailed out by the British government to the tune of many billions of pounds.

If Hornby’s reputation – bewilderingly – seems to have survived the crisis, his recruitment by Boots looks unlikely to do much for the reputation either of CEOs in general or the banking sector in particular, both of which have suffered in recent years. One of our latest multi-country polls shows that the proportion of the public in 32 countries who think the banking sector is fulfilling its responsibilities to society has dipped sharply since the financial crisis hit last year, whereas the pharmaceutical sector still fares rather better in public esteem. For how much longer, one wonders.

Supreme Court Nominee has Pressed for Government’s Role in Forcing Reductions of Carbon Emissions

US President Obama’s first nominee to the Supreme Court, Sonia Sotomayor, has hinted as an appellate-court judge that big polluters should be forced by government to reduce their emissions. In a case from 2006 (Connecticut vs. American Electric Power Company, Inc.) in which Connecticut and other US states brought action against five large US electric utilities companies as public nuisance case. Whilst the case was rejected, as it presented a ‘political’ question unsuitable for ruling by the judiciary, Sotomayor - then the lead jurist in the case - was moved to remark that,

"I have absolutely no idea about the science of global warming… But if the science is right, we have relegated ourselves to killing the world in the foreseeable future - not in centuries to come, but in the very near future. And at some point, someone is going to have to say ‘stop’”.

Sotomayor’s sentiments strongly reflect public opinion in the USA and across the world, as in the 2007 version of GlobeScan’s Climate Change Monitor, 46% of US respondents remarked that it is ‘definitely necessary’ for governments to impose strict limits on the amount of climate changing gases that individual companies are allowed to produce, and another 31% thought it was ‘probably necessary’. Globally, more than half of all respondents thought it was definitely necessary for national governments to take action in this area.

In terms of performance, GlobeScan’s 2008 wave of the Climate Change Monitor, also indicated that both governments and global companies are lagging behind in the effort to address the problem of climate change, with only 16% of US respondent saying that they thought the US government was doing its fair share, and likewise only 13% said the same of large US companies.

Moral Limits to Global Markets?

Should there be 'moral limits' to global markets? It's a timely question, particularly after the economic turmoil of the last year, and Michael Sandel, professor of government at Harvard, is going to be exploring it in his series of Reith Lectures for the BBC. He wants to revive the idea of the common good. It's an attractive idea - that there are areas of our lives that should be 'off limits' to markets and governed by principles other than the economic bottom line. And it's one that wouldn't have been remotely controversial until the last 30 years or so. But - to these ears at least - it seems to beg some fundamental questions, and I'm not sure Sandel has an answer to them. Who gets to decide what's in the interest of society at large?

One thing that's very apparent in our regular global attitudes polling is that as societies we're less and less inclined to trust the judgment of those who we might have once looked to for a moral lead, including governments and religious leaders. So how do you avoid going from rule of the market to the rule of those who shout the loudest? Sandel was part of the panel last week on the BBC's fabulous weekly discussion programme, Start the Week. He's certainly worth a listen.