“Globes”, May 25, 2016
Last week a ceremony was held to launch the “Green Label” project, a welcome initiative of the Tel Aviv Municipality, the Standards Institute, and the Ministry of Environmental Protection, aimed at providing incentives to businesses to address issues of sustainability, environment and energy saving. It is not the first label to burst onto the stage with the intention of encouraging principles of sustainability and “attentive capitalism” among corporations. The “Green Label” was preceded by the “Social Label” – established by the Circles of Justice Association – which focused on social objectives, such as accessibility for the disabled and the rights of workers.
Beyond the various “labels” there are also “social” indices. For example, the “Ma’ala (Upward) Index”, which enables ethical investment in shares selected according to corporate social responsibility criteria and traded on the Tel Aviv Stock Exchange. There are parallel indices to Ma’ala in the capital markets of the US and Britain; and there are also real movements, such as the B-Corp empire, behind the coveted “Beneficial Corporation” certification awarded to entities across 130 different industries, in 50 countries worldwide.
The problem is that with all the best will in the world, in contrast to laws and regulations, labels and indices come by way of recommendation only. In fact, the CEO of a corporation who decides to adopt a rigorous social policy, of a type that affects the corporation’s profit margins beyond what is reasonable, is in fact exceeding his, or her, legal authority – namely, to act to maximize the enterprise’s profits, and in most cases, it could mean going beyond his moral authority.
This statement may sound a little seditious: after all, the realization of social goals is pleasing to the ear, something we hear, naturally enough, as a high moral value. But, ultimately, erosion of corporate profits over an extended period because of exaggerated social extravagances, will shorten the life of that corporation. This will quietly impact on it, even though this is not the intention in the other social goals promoted, such as employment of workers and suppliers, providing services to consumers, and paying taxes that finance government services to the whole population.
In one sense, the starting point of the “Green Label” is excellent, since adoption of the rules required under its banner, do not impact on the profit line, but may even help it: the 20 restaurants, cafés and pubs that participated in a “Green Label” pilot recorded total annual savings of 500 thousand shekels in their electricity and water bills. But the truth is that the capacity of the various labels and indices to instil an “attentive” corporate culture is limited. For example, while no-one disputes the social and moral importance of making businesses more accessible to the disabled, in practice, many businesses lack such access. This is because they have no interest in jacking up their business expenses by the cost entailed in the required renovation, as they know that the expense will not justify itself economically.
As it appears that the regulator is not taking the lead in bringing about the desired change, going out to demonstrations, writing op-eds in the press, and conducting conversations among friends about how bad things are here, will probably not help the issue. The most effective measure, which would shorten processes, can only happen when all consumers show proper and necessary solidarity with the disabled, and stay away from businesses that are not accessible to people with disabilities.
In a situation in which civil society, wearing its consumer hat, demonstrates iron discipline, the revolution for universal accessibility for disabled people will happen overnight. If this sounds like a pipe dream to you, then here is an example: El Al does not operate flights on Saturdays. This is not out of consideration of Jewish values and belief in the sanctity of the Sabbath, nor is it to allow its pilots rest days; but because the religious and orthodox collective informed the company that it would start a boycott if El Al’s planes would take to the skies on the day of rest. El Al aligned itself with this demand as swiftly and efficiently as if it were a Swiss airline.
Another example from the business world: Tnuva announced in 2011 that it was lowering the price of cottage cheese – not because hundreds of thousands had taken to the streets in protest against the high cost of the cheese, and not because its management suddenly feared the public were paying an extortionate price, but because of the sharp fall recorded in its sales turnover. Or in the words of Israel’s much-loved comedy group, HaGashash Hahiver: “It’s not a belief in the morality of the path, but a belief in the morality of money.”
To instigate and propel business civil society to operate on principles of consumerism that are attentive to social and environmental needs is a challenge demanding time and resources. A change in consumer culture is one of the toughest challenges. But, eventually, we will all internalize the power of the consumer crossroad. Corporations rule the world, but all their gas stations are located at the consumer crossroad. And who is doing the refueling? We, the citizens, we are the consumers.
This is the Archimedes lever, which has the power to bring about real change. This is the real ballet box. And to this end, what is needed is not changes in the chants during street protests, but changes in consumer habits when we go shopping.