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Doing good is good business – "HOW COMPANIES PROSPER BY BEING SOCIALLY RESPONSIBLE"

A sentence at the bottom of the copyright page, before the reader even reaches the table of contents of “What Matters Most,” screams volumes about what is most important to one of its authors: “This book is printed on chlorine-free paper.”

By Cecil Johnson

Knight Ridder

http://www.mercurynews.com/mld/mercurynews/business/8070962.htm

Jeffrey Hollender, president and chief executive officer of Vermont-based Seventh Generation, undoubtedly derives some satisfaction from knowing that his thoughts about corporate social responsibility are not being disseminated on a medium whose manufacture and disposal contribute to pollution.

Hollender is an unabashed environmentalist. His company makes ecology-friendly household cleaners, and he believes that companies must take responsibility for what their manufacturing processes do to the environment.

But Hollender is not just an environmentalist. The cause he espouses in this well-written treatise is corporate social responsibility, the idea that companies, rather than focusing solely on profits, should take responsibility for what they do to and for people — employees, other businesses, communities, other nations and other cultures.

In “What Matters Most,” Hollender, with writing assistance from prolific non-fiction writer Stephen Fenichell, details how many small and medium-size businesses have prospered primarily because of their socially responsible policies and how hundreds of non-governmental organizations are prodding corporations concerned only about delivering profits to stockholders to broaden their vision to include all stakeholders.

That view, Hollender makes clear, flies squarely in the face of the economic theories of conservative economists like Milton Friedman, who, according to Hollender, “somewhat hysterically criticized” any attempt to make businesspeople responsible to society as “socialist” and “collectivist.”

Under corporate social responsibility, Hollender quotes Friedman as saying: “The external forces that curb the market will not be social consciences, however highly developed, of the pontificating executives; it will be the iron fist of government bureaucrats. Here, as with price and wage controls, businessmen seem to me to reveal a suicidal impulse.”

Hollender interprets Friedman as meaning that business should be free to make products and profits and let government clean up the mess.

“Which would be all very well if government did or even could clean up the mess. But these same voices also argue strenuously for smaller government and oppose most efforts to address social and environmental problems,” Hollender writes.

One of the organizations that has evolved from the corporate-social-responsibility movement is Businesses for Social Responsibility, which, according to Hollender, was originally intended to be an alternative Chamber of Commerce. It never achieved that status. But it evolved into a prestigious forum where large American and foreign businesses can learn the fundamentals of CSR from panels of experts.

Among BSR’s 700 corporate members are Levi Strauss, Polaroid, AT&T, Chiquita Brands, Agilent Technologies, Ford Motor, L.L. Bean, Eddie Bauer, Gap, Federal Express, Hallmark, Hasbro, Starbucks, Nike, Reebok, Coca-Cola, Wal-Mart, Monsanto, McDonald’s and Philip Morris (Altria).

Although it is criticized for not being selective enough in its membership, Hollender writes that the organization aims only to encourage change in heavily criticized companies.

“What matters is that McDonald’s takes the issue of CSR seriously by signing a deal with Newman’s Own to supply dressings for its new salads, opening a non-ozone-depleting restaurant in Denmark and issuing a CSR report.

“That its french fries clog arteries is, from BSR’s point of view, a problem that McDonald’s evidently has the desire to solve, but it’s up to McDonald’s to decide on how and when to solve it,” Hollender writes.

Just as it gets criticized from the right by people who think like Friedman, CSR, Hollender writes, also catches flak from the left.

“From the left-wing perspective, CSR is often regarded as `greenwashing’ — promoting a `green’ image and a good corporate citizen by adopting a few measures as window dressing to deflect public attention from deeper shortcomings. In this view, CSR is a lot of hype and PR — a fig leaf for the fundamentally destructive and rapacious character of unbridled free-market capitalism,” Hollender writes.

Although government must play a major role in making corporations behave in more socially responsible ways, Hollender does not look to government as the ultimate answer to the problems that corporations externalize into the environment and the world community. And he writes that those awaiting the day that the corporate world implodes and gives way to a utopia of small, socially responsible businesses are living in a dream world.

He suggests that the solution may rest with consumers, who, as corporations are forced to become more transparent about their practices, will buy from companies with socially responsible values. He admits that he does not have all the answers to how to bring about the changes. But he writes that gross domestic product and profits are not adequate measures of human happiness.

“This is why so many of the CSR initiatives described in this book, from HP’s (Hewlett-Packard’s) efforts to bridge the digital divide, to Chiquita’s efforts to improve the lives of those living on and near its banana plantations, to Starbucks’ efforts to put more money into the pockets of the coffee producers, have shared a theme of redressing this balance which desperately needs to be addressed and redressed because it is simply unconscionable to tolerate the present state of affairs in which human suffering is callously chalked up to the cost of doing business,” Hollender writes.

“What Matters Most

How a Small Group of Pioneers Is Teaching Social Responsibility to Big Business, and Why Big Business Is Listening”

By Jeffrey Hollender and Stephen Fenichell

Basic Books, 240 pp., $26

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