Big business loves marriage equality

A tweet from Gap Inc after the Supreme Court overturned DOMA

A tweet from Gap Inc after the Supreme Court overturned DOMA

At Target’s annual shareholder meeting in 2011, Gregg Steinhafel, the company’s chief executive, was asked whether Target would take a stand on a constitutional amendment being proposed in Minnesota to ban gay marriage.

His reply:

“Our position at this particular time is that we are going to be neutral on that particular issue, as we would be on other social issues that have polarizing points of view.”

You can almost feel him squirming, can’t you?

Steinhafel ducked the issue of gay-marriage even thought Target has a reputation as a gay-friendly employer. The company gets a top score of 100 percent and the distinction of “Best Places to Work for LGBT Equality” in the Human Rights Campaign’s Corporate Equality Index. This was a time when most companies ran away from the gay-marriage debate, figuring that no matter what they said, they’d annoy someone.

That has changed, dramatically, in just a couple of years, as I wrote a story posted yesterday at Guardian Sustainable Business:

Last year, when the supreme court pondered the fate of the Defense of Marriage Act (DOMA), which barred same-sex couples from receiving federal marriage benefits, a friend-of-the-court brief urging the repeal of Doma was signed by nearly 300 employers, including such big brands as Apple, CBS, Citigroup, eBay, Facebook, Google, Marriott, Mars, Nike, Starbucks and Walt Disney. Goldman Sachs flew an equality flag outside its downtown New York headquarters when the court overturned DOMA.

Now, as the battleground shifts backs to the states, businesses have allied themselves with supporters of gay marriage in Oregon and Indiana. In Oregon, a liberal-leaning state, you might expect a youth-oriented company like Nike to back marriage equality, and it has – with a $280,000 donation to the cause. The Portland Trail Blazers, meantime, became the first NBA team to back gay marriage.

More surprising is the role of two big companies in Indiana, a Republican stronghold. Cummins, the world’s largest manufacturer of diesel engines, and Eli Lilly, the big US maker of insulin products, each gave $100,000 to Freedom Indiana, a coalition of businesses, community groups and faith leaders trying to keep a constitutional amendment to ban gay marriage off the ballot this fall.

What’s more, as I go on to write, the executives at Cummins and Eli Lilly were very direct in their support of marriage equality. They said it was good for business and good for Indiana, and that the state does not need a divisive and emotional debate over gay marriage. You can read the rest of the story here.

I’ve followed the debate over LGBT equality in the corporate world since 2006 when I wrote a long story for Fortune headlined Queer Inc. In light of the fact that we are either stuck or moving backwards on some other important issues — climate change and economic mobility, to name just two — it’s heartening to see the progress being made by people who are working for gay, lesbian, bisexual and trans* equal rights.

By the way, Minnesotans eventually enacted legislation supporting marriage equality. It was signed into law by Gov. Mark Dayton, the great-grandson of George Dayton, the founder of Dayton’s – the department store that later became Target.

Investing in Bangladesh factories–for a profit

bangladesh-garment-workersOliver Niedermaier is selling a “capitalist solution to one of capitalism’s worst problems” — the unsafe, exploitative, polluting factories in the global south. That’s the topic of my latest story for Guardian Sustainable Business.

Here’s how it begins:

After more than a decade of corporate investment in social responsibility programs, codes of conduct, teams of inspectors and public reporting – all of it intended to improve the working conditions of factories in poor countries – anyone paying attention knows the system isn’t working very well. The Tazreen factory fire and Rana Plaza building collapse in Bangladesh were poignant symbols of its failure.

Maybe it has failed because Western clothing brands and retailers – Nike, Gap, Walmart and the rest – have been behaving like regulators by writing rules and meting out punishment. At least, so argues Oliver Niedermaier, the founder and CEO of Tau Invesment Management. He advocates that businesses should instead try acting like capitalists, using markets and the potential of investment gains to reform their global supply chains.

Tau plans to raise $1bn to turn around factories in poor countries, beginning with the garment industry. Tau promises to deliver “improved transparency, greater dignity for workers, cleaner environments for communities, and enhanced performance and value for stakeholders”.

As the story goes on to say, this is an intriguing–but very much untested–idea. Can Tau raise the money? Will brands partner with the company, a newcomer to supply-chain issues? Most important, can factories in places like Bangladesh that adhere to the highest standards compete effective with those who do not?

I don’t have answers. But I do know that a new approach to the problem is desperately needed.

Chip Bergh: Vegan, triathlete, Levi’s CEO

Levi's Wellthread

Levi’s Wellthread

You’ve heard about slow food.

You may have heard about slow money.

Now it’s time for slow fashion.

Last night, Levi Strauss & Co. unveiled a new collection of sustainable mens clothing called Wellthread, part of its Dockers brand. Wellthread, which the company has described as the antithesis of fast fashion–the cheap, throwaway stuff that is sold by places like Zara and Forever 21–is an attempt to produce a line of clothing that meets the very highest standards for environmental and social responsibility. I wrote about Wellthread for The Guardian, here.

chip-bergh-ls-co-ceoAt the dinner, I was fortunate enough to be seated next to Chip Bergh, the CEO of Levi Strauss. He’s an engaging guy, and while I can’t quote from our conversation–we were having dinner, and so we decided to keep his comments off the record–I can tell you that he is not your run-of-the-mill CEO. He’s a vegan, for health reasons, he told me. (The second vegan CEO I’ve met–Coca Cola’s Neville Isdell was the first.) Chip is marathon runner, biker and triathlete who has raised thousands of dollars for the Dana Farber Cancer Institute in Boston. (His parents and grandparents died of cancer.) He’s also committed to the values that have made Levi’s a social-responsibility leader for more than two decades. Those facts may sound random but they are likely connected–so many people I meet in the world of sustainable business are outdoor lovers or athletes who take care of their own health, and thus understand the connections between what they do at work and the health of the planet. That may sound like a stretch, but the sheer number of marathon runners in the sustainability world has persuaded me that it’s true.

In any event, Bergh these days has more to worry about than the sustainability performance at Levi Strauss. The company has been in a long slide, and he was hired in 2011 to turn it around. Levi’s sales had fallen from a peak in 1996 of $7.1 billion to $4 billion, give or take a few hundred millions, for much of the 2000s. Even as a privately-held company that doesn’t have to answer to Wall Street, that was unacceptable.

Bergh, who spent 28 years at Procter & Gamble before joining Levi Strauss, has reorganized the company, replaced much of the senior leadership team and exited some business. In FY2012, net revenues fell slightly to $4.6 billion and net income was $144 million, up a tick. For the first three quarters of FY2013, Levi’s has enjoyed modest top-line and bottom-line growth. Through it all, he said, the company’s commitment to doing business in a principled way has remained intact.

He seemed genuinely excited by the potential of Wellthread, which for now is a modest venture–almost like a beta test, or pilot project–but nevertheless represents a forward-thinking approach to sustainable fashion, one that begins with the commitment of a designer. here’s how my story begins:

Sixteen years of work as a fashion designer in New York was enough for Paul Dillinger. He quit and took a job teaching design at his alma mater, Washington University in St Louis. “I had become somewhat disillusioned – really challenged morally or ethically – by the industry,” he says.

Then a friend recruited Dillinger to work for Levi Strauss & Co Today, he’s leading a cutting-edge initiative to take sustainable design to new heights at the 160-year-old company: a Dockers line of clothes called Wellthread. The line brings together the best practices in materials sourcing and garment manufacturing, providing social and economic benefits to factory workers in Bangladesh and delivering durable khakis, jackets and T-shirts to consumers.

Dillinger wants to weave responsibility into every stage of design, manufacturing and usage, from the cotton fields to the factories to the market and beyond.

“I saw all these different nodes of activity in the company that were tackling different problems,” Dillinger said, when we met this week at Levi’s Eureka Innovation Lab, a research and development unit near the company’s headquarters in San Francisco. “The opportunity, to me, was to string all of these ideas together and create a systems approach to change.”

You can read the rest here.

Winter Olympic sponsors, feeling the heat

coca_cola_olympics_2010_01

My latest story for Guardian Sustainable Business looks at the pressures from LGBT (lesbian, gay, bisexual, transgender) activists being brought to bear on big American companies that are sponsoring the Winter Olympics in Sochi, Russia, in February.

Interestingly, some of the companies–my story cites Coca-Cola as an example–are otherwise known as being gay-friendly. But although they support equality for their own workers, they are being asked to speak out more widely and publicly against the discrimination that LGBT people face in Russia and elsewhere.

Here’s how the story begins:

On the issue of gay rights, The Coca-Cola Co has a sparkling record. The company has recorded a perfect score on the Human Rights Campaign’s Corporate Equality Index since the index launched in 2006. Coca-Cola was one of the first US companies to support the proposed Employment Non-Discrimination Act , which would protect employees from discrimination due to sexual orientation, and its HR department has funded a lesbian, gay, bisexual and transgender (LGBT) employees association since 2000.

Despite all that, protesters gathered earlier this month beneath a Coke billboard in New York’s Times Square, pouring cans of Coke into a sewer and carrying banners reading: “Coke: Don’t Sponsor Hate.”

The problem, of course, is that Coca-Cola is a sponsor of the 2014 Winter Olympics in Sochi, Russia, which has been a target for gay activists since the Russian government enacted a draconian anti-gay law in July. Other Olympic sponsors, including McDonald’sGeneral Electric,Procter & GambleVisaSamsung and Dow, also are feeling pressure.

The controversy is the latest evidence that even companies that have done their level best to meet society’s expectations – around sexual orientation, or factory conditions in poor countries, or climate change, or any other headline-generating issue – can be caught unaware as expectations ratchet up. And expectations always seem to be ratcheting up.

You can read the rest here. My own view is that if the corporate sponsors are going to benefit from their association with the Olympics, and they are, they ought to at the very minimum publicly push the International Olympic Committee and the Russian hosts to be very clear that LGBT athletes, spectators and sponsors will not face any discrimination. That’s the least they can do. Whether they should also be expected to support LGBT activist groups in Russia and elsewhere in the world–that’s one of the requests from the Human Rights Campaign, America’s biggest gay-rights group–is a trickier question. But if you see gay rights as a civil rights issue, as I do, then it’s reasonable to ask that influential companies to be public about where they stand.

Are your investments tied to genocide?

SP1119147That’s a refugee camp in Sudan. If you are an investor in mutual funds, it’s possible–perhaps even likely–that you own a small share of one of a number of foreign oil companies that are doing business with the government of Sudan, and thereby helping to finance a genocidal, outlaw government that is directly and indirectly responsible for the deaths of millions of people, and the displacement of many more.

I’m returning to the subject of “genocide-free” investing with a column this week at Guardian Sustainable Business, about the puzzling and troubling refusal of a mutual fund managed by ING US to even consider divesting in holdings in foreign oil companies that do business in Sudan. US oil companies are prohibited by law from operating there, but US-based mutual funds are free to invest in Chinese, Indian and Malaysian oil companies that help finance the Sudanese authorities.

Despite the best efforts of an advocacy group called Investors Against Genocide, big US mutual fund companies including Fidelity, Vanguard, JP Morgan Chase and Franklin Templeton continue to invest those foreign oil companies. It’s not because they are unaware of the issue. I’ve covered the topic of “genocide-free” investing since 2007, beginning with a story for Fortune.com headlined Fidelity’s Sudan Problem, and followed a few months later by another called Warren Buffett and Darfur. By then, Harvard, Yale and Stanford had divested their holdings in PetroChina and Sinopec, demonstrating that divestment is both possible and practical. In 2009, as an investor in mutual funds managed by Fidelity and Vanguard, I voted for divestment (and blogged about it here).

A few mutual fund companies–notably T. Rowe Price and TIAA-CREF–have agreed to purge their holdings of the Asian oil companies, but most have resisted. Among the most egregious is ING US, whose own shareholders voted for divestment. If nothing else, this is a reminder that we’re a long way from achieving “shareholder democracy” in corporate America.

Here’s how my story for Guardian Sustainable Business begins:

Call me old school but, in my view, companies should be accountable to their owners.

They should also try to stay away from repressive governments like the one in Sudan, where millions of people have been killed in a long-running genocide.

So when, as part of a campaign to stop the flow of money to Sudan, investors voted to ask a mutual fund managed by ING US to sell its holdings in companies that “contribute to genocide or crimes against humanity,” you’d think that ING US would comply.

It has not.

You can read the rest here.

To put this in perspective: It has been more than 15 years since the U.S. imposed sanctions on Sudan, and nine years since the killings in Darfur were declared to be a genocide by the U.S. Congress. Yet financial institutions are still investing in the worst companies funding the genocide.

It’s another reason, not that we need one, why so much of Wall Street is rightly held in such low esteem by so many Americans.

Launching: Guardian Sustainable Business US

GP_SusBus-logo_RGB_colourGreetings, blog-readers! I’m just back from vacation, in time for the launch of Guardian Sustainable Business US. Much as I enjoy my work, I confess that I enjoy my time away from work even more. I felt fortunate to be able to spend a week in the south of France, hiking and biking with my wife, two daughters and their spouses, enjoying the scenery, the food and the wine, and not necessarily in that order. I’m more of a beer guy than a wine drinker but the chilled rosé in Provence is a perfect complement to the warm summer days and nights. Nearly as good as our local Dogfish Head. But I digress.

My new part-time gig as editor-at-large of Guardian Sustainable Business is going great. It’s enormous fun to be part of what feels like a startup inside a media organization that is nearly 200 years old. Working with the Brits is a treat–they are a lively and irreverent bunch, none more so than Jo Confino, who is an executive editor of The Guardian and founder of the sustainable business site.

I’m now dividing my time between Fortune and The Guardian, which, I suppose, goes to show that the sustainability agenda can cross political, cultural and national boundaries. Or maybe it’s just evidence that biology is destiny. My father worked for Fortune back in the 1950s and 1960s, and I remember as a kid visiting him in the Time & Life Building. And we spent a summer or two back then in Manchester, England, my mom’s home town, where the local paper was The Guardian, then known as the Manchester Guardian. I would search the paper for baseball scores, and toss it aside when I couldn’t find them. Only recently has The Guardian begun to cover America’s pastime. You could look it up. But I digress, again.

The Guardian has hired Jennifer Kho, formerly of GreenBiz, to be the managing editor of the US site. Charlie Wilkie has moved to New York from London to lead the business side. Over the next few weeks and months, Jenn and I will be looking for contributors, as well as story ideas, so please feel free to be in touch.

Here’s how Jo explained our plans for the site in an introductory essay:

Today we officially launch the US edition of Guardian Sustainable Business, focusing our unique style of journalism on how American companies can rise to the sustainability challenges of our age.

This is an exciting time, given the increasing recognition that the business of business is much more than just business.

How times have changed. When I was a Wall Street correspondent back in the heady days of the 1980s, there was little if any space to talk about the role of business in society. [click to continue...]

Garment industry deaths in Bangladesh: The end of the beginning?

SAMSUNG DIGITAL CAMERAGarment workers in Bangladesh have  labored in unsafe conditions for years. They will likely suffer for years to come.

But in the aftermath of the Tazreen factory fire last November, which killed at least 117 people, and the Rana Plaza building collapse in April, which killed more than 1,100, European and US retailers–operating on separate but parallel paths–have come together to act. Actually, to be more specific, they have come together to promise to act.

There’s lot of controversy about the US effort, called the Alliance for Bangladesh Worker Safety, because it does not include the meaningful participation of organized labor, at least not yet. But, as I write today in Guardian Sustainable Business, it’s a step forward.

Here’s how my story begins:

At long last, US apparel retailers have joined together to improve safety for garment workers in Bangladesh – most of them poor women, toiling in hazardous workplaces at the bottom of the bottom of the global supply chain.

Gap, Walmart, Target, Macy’s, VF Corporation and a dozen other companies that formed the Alliance for Bangladesh Worker Safety say they will set common safety standards, inspect all their factories in Bangladesh, make the results public, provide loans for repairs and give workers more power to protect themselves.

Is that sufficient? Labour rights groups say no. As the US companies unveiled their alliance in Washington, student protesters gathered outside, chanting “Shame on Walmart” and decrying the plan as a “fake safety scheme.”

It’s not. It’s a serious plan, with some money behind it, that includes a commitment to transparency, and mechanisms to enable workers to speak out about unsafe conditions. It’s not perfect – the alliance’s glaring flaw is a lack of participation from unions – but the US companies hope to bring in Bangladeshi and international labour groups.

The story goes on to describe the key role played by Gap and its executives in bringing the US retailers together. Gap has been deeply engaged in Bangladesh since December 2010–before Tazreen and Rana Plaza–when a fire at one of its suppliers’ factories killed 29 workers. [click to continue...]

David Griesing: “Everyday low prices” hurt us all

Griesing-Medium-003Today’s guest post comes from David Griesing. A student of religion and ethics, David has been a non-profit manager, a caregiver, a corporate attorney, a teacher in a school for autistic kids, a company executive, retail clerk (of women’s shoes!), an arbitrator, and an entrepreneur. If nothing else, his peripatetic career has made him an expert on work–particularly how we can make it more productive and satisfying for ourselves and for those impacted by it. From his home base in Philadelphia, David helps parties to resolve their commercial disputes when he’s not writing and speaking about how all of us can do a better job of bringing our values into our work. He’s a regular on Twitter @worklifereward and blogs at http://www.davidgriesing.com/

David writes today about the downside of the “everyday low prices”  offered by discount retailers like Walmart, one of which is the inability of many of its workers to earn a living wage. A week or so ago, Business Week did an excellent cover story on Costco that complements David’s arguments here. Having said that, the counterargument is that Walmart’s low prices puts billions of dollars of savings into the pockets of the low and middle-income people who shop there, and even those of us who do not, since rival retailers reduce their prices to compete with Walmart.

Our expectation that we’ll always pay less for consumer products has an impact on the people in the supply chain who bring us those products—and it’s not a good one.

I’m talking about those who mine the metals in your cell phone, pick the cotton in your socks, process the rubber in your running shoes. Workers in places like Indonesia or Peru put your toaster together, stick the pins in your dress shirt so it looks good in its package, or pack the parts you’ll assemble into an IKEA bookcase. American sales clerks, stock boys and checkout girls get the final product into your hands.

To bring you “everyday low prices,” the people in these supply chains are paid as little as their labor markets will bear so that the factory owners, shippers and retailers can make a profit. With fewer dollars to go around and cutthroat competition between the on-line and bricks & mortar stores, every link in the consumer product supply chain is squeezed. This includes workers along the arc of production—including those in America.

How is our addiction to cheap stuff making the work that many of our neighbors do everyday a losing proposition—and why should we care? [click to continue...]

My new gig

GP_SusBus-logo_RGB_gdn-colourThis week, I begin work as editor-at-large of Guardian Sustainable Business US. I’m excited. My introductory column is here.

I’ve been writing for Guardian Sustainable Business in the UK for about six months, on such topics as urban greenhouses, salmon aquaculture, Amazon’s corporate irresponsibility and self-imposed carbon taxes at Disney, Shell and Microsoft. As a result, I’ve had the pleasure of getting to know Jo Confino, an executive editor of the Guardian and chair of Guardian Sustainable Business, Caroline Holtum, head of content for the site and Charlie Wilkie who leads the commercial operation.

When they asked me to take on the role of editor-at-large of a new, soon-to-be-launched US site, I readily accepted. I’ll be writing a weekly column for the site, and helping guide coverage of sustainable business in the US. (It’s not a full-time job. I will continue to contribute to FORTUNE and lead the magazine’s annual conference on business and the environment, Brainstorm Green.) The Guardian will soon hire a New York-based editor to run the editorial side, and Charlie has moved from London to New York to run the business side. [click to continue...]

Marcus Chung: A report from Bangladesh

ChungSadly, today’s guest post from my friend Marcus Chung is timely. The New York Times reported this morning on another factory fire in Bangladesh, this one killing seven women. Is this the price we must pay for cheap clothes? Marcus thinks not–although he’s just 36, he has worked for about a decade on corporate responsibility issues in the apparel industry, doing stints at Gap and Talbot’s. I’ve gotten to know Marcus as a fellow board member at Net Impact, a nonprofit organization of students and young professionals who want to use their business skills to make the world more just and sustainable. That’s exactly what Marcus, a Wesleyan grad with a Berkeley MBA, is doing in his current job, consulting for a global retailer of children’s clothing. Here’s his report from Bangladesh.

From the moment you arrive at the Dhaka airport, it’s clear that the apparel industry is vital to Bangladesh’s economy. Airport walls are lined with posters advertising local garment manufacturers, textile mills, and trims suppliers. Apparel accounts for between 70 and 80 percent of exports, so it’s no surprise that almost everyone on my flight from Hong Kong to Dhaka declared their profession as “buyer” or “sourcing” when clearing through immigration.

I visited Dhaka on behalf of a client to get a better understanding of the CSR challenges, trends, and opportunities that large apparel brands face in sourcing from Bangladeshi garment factories. Following November 2012’s tragic Tazreen Fashions factory fire that claimed the lives of more than 100 workers, there is renewed focus on how the industry can promote better factory working conditions. Tazreen was just the latest in a string of Bangladeshi garment factories that burned to the ground, but it also was the country’s most devastating in terms of lives lost.

Western mass-market apparel retailers source from Bangladesh because they can get a solid product at a competitive price. The apparel industry cannot ignore a fundamental commercial reality: Bangladesh has a ready supply of very capable garment factories that are filled with inexpensive labor. It’s not realistic (or probably advisable–MG)for companies to simply stop sourcing from the country. Therefore, the industry must do a better job of sourcing in a responsible manner that protects the rights of workers and includes basic commitments to a safe and healthy work environment.

A Multitude of Challenges

Over the years, I’ve heard many hypotheses about why fire safety continues to challenge so many Bangladeshi factory managers. Some cite an ineffective, corrupt government that does not enforce its own building code regulations. Others believe factory middle managers, myopically focused on production output, lack the ability or understanding to support fire safety practices with workers. Many believe pressure from Western brands to achieve low-cost goods encourages subversion of basic health and safety standards. I’ve heard people claim the root cause is a basic lack of infrastructure: old, multi-story buildings with poor electrical wiring; unreliable power supply (I cannot count the number of times the power went out during my visit) that causes short-circuits; and dusty, flammable materials lying dangerously close to unprotected electrical outlets. I spoke with one CSR leader who lamented a general lack of civil society and a culture where officials will agree to make improvements, but never follow through. [click to continue...]