Thursday, May 08, 2008

How and why to express your values to companies: the new ClimateCounts scorecard & much more has just released their new scorecard on companies' climate change policies-- the extent to which companies are measuring, disclosing, and reducing their contributions to climate change. This PDF pocket guide gives you scores by sector of 56 major companies. You can quickly see some dramatic differences; for example, in the Electronics category, IBM leads the pack with a score of 77 out of 100, while Apple trails with only 11. Coke (61) beats Pepsi (37). And while McDonalds only scores 27, Burger King and Wendy's are both worse, at dead 0. The highest scorer overall is Nike (82.) You can read more details in these profiles.

This scorecard is just one of the tools I use to understand the social and environmental impacts of the companies that make the products I buy (and the ones I invest in via mutual funds.) Others include the Corporate Equality Index's ranking of LGBT policies (my post here), 100 Best Companies to Work For (my post here), the Better World Shopping Guide, and certifications like fair trade, union-made, certified humane, and organic. (I also try to buy from small and local businesses when I can; not only does this express my values in itself, but makes it much easier to communicate my values directly to the local owners.)

Why's it important to me? When I buy products, I try to be as conscious as possible about the way they were produced. As the end user, they were essentially produced for me-- and so I feel that the items produced in my name should have the most positive or least negative social/environmental impacts possible. It's too easy for everyone down the line to deny any responsibility (the company can say they make their choices because of what I as a consumer/shareholder demand; I could just say "the company makes all the decisions, I just buy things, I can't help it!") So I use rating systems like Climate Counts to be more conscious of what companies are doing, and hence what the effects of my own choices are.

But I also want to tell companies about my values and let them know that there are things more important to me than money, so they don't make choices based on the false assumption that my #1 priority is the lowest prices (or the highest stock returns.) There are a few different ways I try to send that message:
  • Buying from companies that do better in the areas I care about. I think this is important, partially just as a principled act of taking personal responsibility, but also because if enough people do it, it can affect companies' choices. The challenge with this strategy, though, is that generally the companies don't know why you are or aren't buying something.
  • Investing in mutual funds that push for the things I care about. My retirement money is in socially responsible mutual funds, ones which push companies they hold stock in to act in more socially and environmentally responsible ways. So my retirement savings give those funds more weight to bring their shareholders' values to the table in discussions with companies, and more votes when shareholder resolutions on corporate social responsibility (CSR) come up. Traditional mutual funds are usually pretty bad about CSR resolutions, as you can see here-- many of them pratically never support them (Vanguard voted yes on 5% of CSR resolutions in 2007, Fidelity only 2%) and even those with the best records (like TIAA-CREF which voted yes on 40%, Schwab at 36%, or Goldman Sachs at 24%) are still pretty poor. [See
  • Actually directly telling them what I care about! One of the neat things about the website is that on the profile pages for each of the 56 companies, there's a link at the bottom that says "Click here to tell this company you think Climate Counts!" It gives you a form to e-mail the company to tell them that you read the information about their record on climate change, and that you consider yourself a climate-conscious consumer. There are other organized campaigns, like Co-op America's actions (tell car companies to improve fuel effiency! thank magazines for using recycled paper! and more!) Or you can just look up the right e-mail address and tell companies your thoughts all on your own (when it's a local business, it's even easier and more personal.)
Do you try to express your values to companies, and how? If you don't, why not? What do you think are the best strategies, and are there things I'm missing? (I left out lobbying politically for regulations and/or incentives, which is really important but is more about our roles as citizens than consumers/investors.) Are there other good sources of information that you use to inform your decisions?

1 comment:

Greener Pastures said...

Nice article- enjoyed the information.