The Fog Of CSR

In the later half of the 1990’s, a coalition of human rights groups, social activists, sweatshop watch organizations and labor groups took aim and declared war on the large clothing chains and sports wear companies that had outsourced manufacturing to developing countries. This coalition dragged the sweatshop conditions, low subsistence wages, and labor abuses found in many of these garment manufacturing companies into public awareness through boycotts, picketing, letter writing campaigns, and news stories published in big city newspapers, local shopping newsletters, and national television news. A photo of Pakistani children working in a factory sewing soccer balls for Nike cast Nike as the face of child labor abuser for the axis of corporate garment manufacturers.

And the campaigns being waged against the corporate garment manufacturers were being effective. A boycott call is perceived as negative news by the investment community (where perception is everything) and negative news depresses a stock’s share price. A fascinating study by Karen E. Schnietz, Ph.D. and Marc Epstein, Ph.D. indicated that stock prices and portfolio values of corporations with a poor reputation for corporate social responsibility were more adversely affected by a general economic crisis than companies with good reputations for corporate social responsibility.

The large clothing chain stores and sports wear manufacturers were caught in a pincer movement with the labor groups on one side pressing them to increase wages, improve working conditions and offer healthcare on one front, while the stock analysts and large brokerage houses of Wall Street Inc. were quietly pressuring them to reduce costs and improve revenues and profitability. What to do? The Nikes, Gaps, and Wal-Marts of the world needed a new weapon and the appreciation for Corporate Social Responsibility began to dawn.

Mallen Baker (mallenbaker.net) gives a very crisp, cogent definition of Corporate Social Responsibility as “how companies manage the business processes to produce an overall positive impact on society.” Many people also include environmental stewardship, including global warming concerns, as part of a company’s Corporate Social Responsibility.

Corporate Social Responsibility (CSR) began to form as a business concept in the 1970s, but it wasn’t until Ben & Jerry’s  hired an independent ‘social auditor’ in 1988 to research and report on the social impact of Ben & Jerry’s on their employees, suppliers, and community. They were audited on their community outreach, philanthropic giving, environmental awareness, and the satisfaction of their employees, customers, suppliers and investors. Ben & Jerry’s undertook this CSR report because they truly cared about the social impact created by the company and not as a PR smokescreen. Ben & Jerry’s – home of wickedly rich and fanciful flavors – have always had ethics and community service as core business values.

When many of the large chain clothing and sports wear companies were engulfed in a blizzard of boycotts, pickets, and unfavorable news stories, they realized that their best defense is a strong, positive news campaign of their own and they adopted CSR policies stating their commitment to improve wage, safety and labor abuses in their factories and their requirement that suppliers adhere to these standards, also. Were they sincere in their desire to demonstrate that they had genuinely embraced new and improved ethical standards or was it just intended to deflect social criticism?  Probably a little bit of the former and a lot of the later.

Reports of abuses persisted, though, and increased public pressure from watchdog organizations forced many of these companies to improve on the independence and access of the monitoring organizations and the transparency of the supplier chains and business processes. Nike, for example, has terminated agreements with suppliers who use child labor and they have worked with the Global Alliance and the Fair Labor Association (FLA) to monitor business processes in supplier factories that actually manufacture the clothing and sports wear to insure the ethical and fair treatment of workers.

End of story, right? Another nasty social problem eliminated? Well … no. Watch dog organizations still report that millions of children globally work long days making shoes, rugs, and clothing for Western consumers. These indentured children can be found in homes and small factories throughout Asia and especially in India, Pakistan, Bangladesh, Indonesia and Vietnam and in Latin America. Millions of women and immigrant workers are trapped with barely sustainable wages working long hours without any benefits in desperate conditions to produce garments and clothing accessories that still appear in large chain stores such as Wal-Marts.

A huge and ethically significant workforce exists below the radar of many government, NGO and corporate monitoring and reporting organizations. These uncounted, undocumented, and sometimes illegal garment workers are often not even recognized as garment workers or employees because they work as “contractors” for manufacturing suppliers, in small illegal “sweatshop” garment factories, or in their homes doing piece work for larger garment manufacturing suppliers. The Clean Clothes Campaign and the International Restructuring Education Network Europe (IRENE) have documented the rise in “informal” and unaccounted workers in the global garment industry.  In the bright spotlight of public attention on the subsistence living of many garment workers, the problem areas often melt and reappear where public attention isn’t. Garment manufacturing suppliers often find ways to satisfy Corporate Social Responsibility requirements while affecting little real change in the lives of many of the workers.

What can the ethical shopper do to create real change? Continue the pressure on the large clothing chains to improve and strengthen independent CSR-compliance monitoring. Continue the public pressure for sustainable wages, healthcare, safe working conditions, and the right for workers to form labor organizations wherever garments are manufactured.

Ultimately, what is required is a change in the consciousness of clothing consumers. As long as we demand “Always Low Prices” and support large corporations which push prices lower by continually squeezing the garment suppliers, we will be supporting and encouraging corporations to squeeze their employees by offering barely sustainable wages without benefits and using “informal” contract workers. True social values and ethics must be at the core of a company’s identity and purpose. Otherwise, Corporate Social Responsibility polices are just fog and a diversion.

Shop Ethically.