Gap, Nike and Walmart can police their global supply chains to outlaw child labor but what about discount retailers and no-name brands?
McDonald’s can become a leader around animal health and welfare but other fast-food chains need not follow.
IKEA plans to power itself with 100 percent renewable energy while rivals who buy cheaper, coal-fired electricity can gain a competitive edge.
These examples point to a couple of obvious problems with voluntary corporate-responsibility initiatives. First, there’s no assurance that such initiatives are going to solve whatever problem it is that they are targeting; in fact, they won’t unless they are universally adopted or codified into law. Second, unless and until those companies that lead the way are rewarded by consumers (unlikely) or their workers (more probable), the leading companies can find themselves at a disadvantage.
This week at Guardian Sustainable Business, I look at the contrast between Best Buy, a corporate-responsibility leader, particularly around recycling, and Amazon.com, which until recently has been a CSR laggard.
Here’s how the story begins:
When my wife’s printer recently went on the fritz, she ordered a new one from Amazon, which arrived two days later. I took the broken printer to Best Buy, which offers free and easy recycling of electronics.
Is this a problem for Best Buy, I wondered? Collecting and recycling electronics costs money, and Best Buy’s program is open to anyone with electronic waste, from any manufacturer. No purchase necessary.
By contrast, Amazon, a key competitor – and the seller of both our old and new printers – offers little in the way of recycling and more broadly has been a laggard when it comes to corporate responsibility.
The Seattle-based online retail giant says on its website that it “recognizes, as do many of our customers, the importance of recycling electronic equipment at the end of its useful life”. But the company offers only a mail-in take-back programlimited to its own products, like the Kindle e-reader.
“It’s not quite break-even,” said Alexis Ludwig-Vogen, Best Buy’s director of corporate responsibility, of the program. This means, to put it bluntly, that Best Buy is collecting trash generated by Amazon, Walmart and other competitors.
The dynamic between Best Buy and its competitors is analogous to what economists call a free rider problem. Best Buy is providing what could be considered public goods, free recycling, at its own expense, and Amazon, Walmart and, for that matter, all the rest of us benefit. Electronics make up the fastest-growing waste stream on the planet, and recycling preserves metals and plastics, and reduces pressures on landfills. Efforts like Best Buy’s also help fend off regulation, which could benefit other companies.
You can read the rest of the story here.