Are big companies bad for the world? Many recent articles on willful big company malfeasance and the emotional populist pull of the Bernie Sanders campaign are begging to me wonder.
Some context. Last week I wrote about #Degriding ourselves of public and private utilities through decentralized, community, neighbor to neighbor power exchanges.
Like almost any change we want to see, I argued that if we put our minds to it, we could probably have 100% and decentralized clean residential energy within a few years. Check out the example of Mongoose Power, a community power initiative in the UK.
But we don’t put our minds to it, and so it won’t happen that fast.
Why don’t we? Because we can’t yet get our minds around the fact that even though we all cry out for a more fulfilling life, less work, more stability, we continue to punish ourselves through buying into the neo-liberal growth paradigm.
Until we decide to get off the “consume more” treadmill, our species is doomed. If you have followed this blog at all, you will know I have been a big believer in market signals. But it seems clear to me, despite my best efforts to remain calm and unafraid, the markets – or “we” the consumers – may not be pushing companies hard enough to avoid the ecological catastrophe our consumption and production habits are certainly aiming us straight towards.
It’s not that companies don’t know or get this. They do.Exxon knew it about climate change long ago. VW lied about their emission levels. Just this week, we learned Mitsubishi lied about fuel standards . Deloitte and other large consulting firms give mountains of dubious tax “avoidance” advice to companies, some operating in the poorest countries in the world!
Companies do this stuff because they don’t really care that deeply about sustainability and they will urge and egg us on to buy more as long as they can. But profits are good for the economy they say; though many more might legitimately ask whose economy? And as Paul Krugman recently pointed out in the New York Times, large companies aren’t even reinvesting their record profits in the countries (let alone communities) that helped to generated them in the first place. Just for juxtaposition fun, these are most of the same companies which are happy to fight tooth and nail against a real cost of living minimum wage.
This brings me to my point about big companies. Some, many actually, proclaim loudly that they want to be sustainable. Indeed, recent research by the international development organization Oxfam in the UK, found that the top ten global food brands all make bold sustainability policy commitments. With the admirably wry understatement only a true Brit can politely manage, the Oxfam report pointed out a pretty large gap between performance and supposed aspirations remains.
It’s hard to believe anything anyone with money tells you these days, and companies in particular, despite their mostly having one high profile program or another to make things seem more “sustainable”. Most unfortunately however, companies rarely address fundamental material social and environmental impacts in any meaningful way. What companies typically do, and they do this quite well, is to invest far more in sustainability related advertising and reports than they do in actual sustainability initiatives!
I call this Sustainability Arbitrage… you know, like when you buy something in one market cheap and then sell in another for a lot more. Unlike green washing which is basically lying about environmental performance, sustainability arbitrage is when companies leverage through great communications relatively small sustainability performance into really big reputational gains.
My pet nasty is Goldman Sachs. Remember them? They are ones that sold billions of those lousy mortgage backed bonds which almost took out the global economy, and then shorted them when the bonds inevitably tanked (don’t tell me these folk don’t know what they are doing). Goldman makes a few high profile green investments and supports a few nice projects, but when it comes to the damage their financing efforts cause, what are they offsetting?
Not surprisingly, a recent report by the Institute for Policy Studies found that about three quarters of Wall Street’s 2015 bonuses could have funded the difference between the current minimum wage and the proposed $15 dollar an hour minimum for the entire American minimum wage work force…. for the whole year! Should I repeat that… the whole American minimum wage work force…. Trickle down economists since the Regan administration have maintained that bonuses are put to great and productive use, something we know is not happening. By contrast, because minimum wage folks are basically just getting by (if that), extra money in their pocket would be immediately spent to corporate advantage, not horded in some off shore haven far from productive use.
Don’t get me wrong, investment banks and banks in general have important roles to play in the economy, but like companies in general, they ought to be responsible for their material impacts. If they were more like Triodos Bank or VanCity Credit Union, the world would be a much better place. Indeed, banks are in a unique position to promote finance-led sustainability efforts, but they don’t and we don’t make them. Instead we complain about fees, even when the Social Investment Forum found that financial firms respond quite quickly to consumer demands for greater sustainability.
I even take umbrage with companies as good at sustainability as H&M. Bless their closed-loop souls, I really do like them. But I would like them much more if they stopped pushing fast fashion and growth. It doesn’t matter how c-looped you are, if you are pushing growth you are pushing unsustainable consumerism.
Just like Co-operative Group CEO, Richard Pennycock, who recently demanded of his Board he be paid 30% less, I want to see big companies shrink and smaller local companies rise. We need to decentralize production and consumption. Why? Simple: if you crap in your back yard, you pick it up. Same with a local parks, water ways, air, infrastructure…..And, as Mongoose in the UK is planning to do, profits tend to get reinvested in the community, not Mauritius, Grand Cayman, etc etc…..
Many make the case big companies can be critical role models for sustainability. I grudgingly agree if only because I don’t see them going away soon. And many might also say, be fair to the ones that are trying. This I would also have to agree with – for now anyway. But if big, entitled, crony-led companies can’t go 100% sustainable quickly, like Peabody Energy, I say: let em Bern.