By John Burzawa
Society is demanding a new type of business: one that cares about the environment, about creating an inclusive workplace, about ethically treating workers, and about anything else one can find listed in a series of Instagram infographics. Enormous pressure is being placed on older businesses to meet an unwritten and inarticulate set of social rules. Whether or not a business meets this demand, however, is immaterial. Institutions are less concerned about adopting social responsibility than they are about promoting it through websites, pamphlets, and profile pictures. In this article, I outline a game-theoretic analysis of the role that branding and altruism play in crafting CSR initiatives in order to promote tightened consumer scrutiny.
An ethical zoo can be accredited by the Association of Zoos and Aquariums, a 501(c)(3) nonprofit organization dedicated to “providing services advancing animal welfare, public engagement and the conservation of wildlife”. This is a valiant cause, and surely the goals of the organization are in line with the morally sound mission of natural preservation. Like many other tax-deductible associations conveniently located near Washington D.C., however, money still flows through the AZA’s operations like adderall on a college campus. Not to mention, a look under the hood of the AZA’s corporate structure raises some questions as to the true driver of Zoo accreditation. The Association’s website will have you believe that the accredited zoos undergo a rigorous process by which the merits of the staff are tested against the moral aptitude of the Accreditation Commission (it’s a commission so you know it’s real). This would be a great model if the Accreditation Commission was made up of activists, bureaucratic regulators, or a group of individuals narrowly committed to the truth and nothing but the truth. But it’s not. 10 out of the 12 commissioners, including the Chair and the Vice-Chair, are affiliated with Zoos of their own, bestowed with the convenient ability to label their own businesses as ethical whilst gatekeeping the moral high ground (and subsequent market appeal) from their competition. And let’s not kid ourselves about the merits of such a label anyway, should consumers really give ethical leeway to ethical zoos ethically putting animals in ethical cages anyway?
Ethical zoos aren’t the only example of how businesses promote their CSR agendas, these practices have also permeated firms on a multinational scale. More often than not the drive for these bold moral insistances harnesses a genuine feeling of care. After all, nobody is going to snarl against philanthropy. Could it be a bad thing that Starbucks moved to Fairtrade coffee, or that BMW is supporting STEM education efforts and localized production in South Africa? Ben and Jerry’s Ice Cream has 10 CSR initiatives boasted on their website, offering a forest of initiatives ranging from product specifications against GMO and Artificial Growth Hormones to advocacy and child visibility. But what really distinguishes genuine concern for ESG factors from business operations as usual? It might not be a stretch to think that the people behind CSR initiatives are well-intended. But that’s exactly the issue. While we may like to think that corporate leaders pursue these efforts for the betterment of the world around them, a broad view of the corporate landscape sheds light on the true nature of this question. Workers provide for society, not just with the fruits of their labor, but with the profits, they invest back into the economy. Adam Smith famously notes this relationship in The Wealth of Nations, stating that:“It is only for the sake of profit that any man employs a capital in the support of industry; and he will always, therefore endeavor to employ it in the support of that industry of which the producers likely to be of the greatest value, or to exchange for the greatest quantity either of money or of other goods.”
The evolutionary interdependence of enterprise and social well-being is one that I would argue renders CSR campaigns meaningless without context. Social entrepreneurship exists in a hidden, potentially subconscious, and selfish manner, facilitated by the gullibly self-righteous consumer who exploits altruism for validation. That’s not to say that all corporations and wealthy individuals support CSR projects for the social capital they accumulate — this much is often an externality — but our idealist consumption habits permit certain social irresponsibility to go unchecked, creating a self-aware social desert.
Even so, not all citizens agree as to what ethical standards ought to be applied in the corporate world. Charity is one thing, but with the culture of virtue signaling present in modern American business, some initiatives are less popular than others. While there are areas of well-deserved investment (fighting human trafficking comes to mind), others are not so commonly accepted. In July, Ben and Jerry’s made their stance clear on the Israel/Palestine conflict, announcing they would cease the sale of their desserts in Israel by canceling contracts with their licensed partners. I don’t have the background, nor the cultural competency to comment on the conflict itself, but it’s important to draw attention to the duality of the issue. When not everybody is on the same moral vine, the actual content of socially responsible behavior becomes less important than the messaging that comes alongside it. Even initiatives to prevent climate change and foster inclusivity have drawn criticism from the far right. While these erroneous objections may be unfounded in my opinion, the fact remains that without a standardized set of socially responsible goals, no effort to improve ESG factors will count as a success to all parties. The lines for political agenda-making and altruistic capitalism are not only blurred but drawn differently for everybody.
Goods and services are sold only when there is market demand for them. Whereas usually, competition among several firms yields the most satisfactory good or service at the lowest price, the standards by which CSR efforts are judged have dynamic and rarely scrutinized meanings, creating an incentive to illegitimately fulfill their purpose. Misleading labels or claims are rampant, most clearly in the foodservice industry. A few years ago Morgan Spurlock directed and wrote a sequel to his famous documentary, Supersize Me. In the film, Spurlock exaggerates the lengths to which fast-food chicken restaurants have gone to hide their unhealthy practices — practices which Spurlock is partly responsible for exposing in the first Supersize Me — by opening a restaurant of his own. Switches to brown paper bags for distribution implicitly instill a sense of environmental caution by consumers; changing menu item names from “Fried” to “Crispy” releases customer dietary guilt; the inclusion of vegetables in caloric preparation means healthy choices, and the wealth of labels applied to input products fill consumer consciousness with 100% antibiotic-free, open range, organic BS. In attempting to rigidly define a metric for otherwise qualitative data, producers leave room for interpretive misunderstandings.
Fairtrade products have several definitions, some from Fair Trade America, others from Fair Trade International. There’s also Fair for Life, The Fairtrade System, and Natureland Fair. Frankly, there’s nothing fair about Fairtrade for the consumer. Vague criteria defined by different organizations can’t possibly serve all interests. In fact, the proto-cycling dilemma of the certification structure creates an incentive to ease up on criteria for Fairtrade labeling so that an organization draws the most producers to their label over others. After all, once most firms rely on a singular social responsibility certificate, they can start to define their social responsibility in any manner they choose. Remember the Association of Zoos and Aquariums? At one point, the accreditation page of the Association website gets so eager to convince conscious consumers to value their ethical label that it desperately states:
The “We Bought a Zoo” club cages us to inseparably associate their label with Animal welfare, not because accreditation so valiantly represents such a cause, but because when the time comes to abuse nature for cost reduction, the infallibility of their crayon-signed certification will blind conscious consumers. The Nash equilibrium will settle where ethical labels accumulate so much social capital that without certification or accreditation, a practice is void of ethical consideration altogether. Again we find ourselves trapped by inevitable, inadvertent lies associated with CSR promotion. Being socially responsible isn’t an exotic bird or a new exhibit for consumers to see, it’s an expectation of business operation. With no consistent or independent standard for social responsibility, there are no criteria from which we can concretely draw in order to distinguish Ben and Jerry from the Wolves of Wall Street.
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