13 JANUARY 1996, Page 9


It used to be enough for business to be green. Now it is supposed to solve the world's problems as well.

Anne McElvoy on the selling of ethics Calm down the teenage-Marx- ist vocabulary and delete the non sequiturs (why would anyone indiscriminately flare gas when it is literally burning profit to do so?) and these sentiments are widely shared in Britain. Shell, a faceless multinational, which prided itself on a corporate iden- tity resembling a better remuner- ated civil service, has crossed the invisible line of respectability. `Shell has patently ignored its moral responsibilities: it is ridicu- lous for them to pretend that they operate in an ethical vacu- um,' says David Wheeler of the Body Shop. Friends of the Earth's Jonathan Porritt adds, 'It is hard to ignore the stain of blood now spreading down that once-proud corporate logo.'

In the wake of Saro Wiwa's murder, anger at the execution was immediately channelled towards Shell. Usually in such cases, the campaigners' pressure would be directed towards Western governments and calls for an international oil embargo. This time, however, the British ambassador's removal went widely unnoticed, the demands for embargo were muted. By Virtue of operating in Nigeria — thus pro- viding the military dictator General Abacha with revenues — and because it was opposed by Saro Wiwa who opposed the oil company's environmentally careless performance in the Ogoniland, Shell was declared to have been his hangman.

The corporation's senior executives have failed miserably to respond to the accusa- tions of moral turpitude. The repeated sound-bite 'the company does not get involved in politics' sounded lame and cal- lous. Never can their have been a public relations offensive as incompetent as that mounted by Shell Tower. When I called to arrange a background briefing for this piece, I was faxed a vague 'Statement of Principles' in return. 'I shouldn't think you'll have any more questions after that,' said the head of press, hopefully. He was anxious that I 'should not talk exclusively about Nigeria'. It was hardly a time when he might realistically have thought people would be more interested in a new petrol- pump design. It is worth asking why Shell so singularly failed to counter the criticisms made against it. First, it failed because it was on shaky ground from the start, having pollut- ed the Ogoniland and having failed to introduce adequate cleaning-up measures until it was too late, which fuelled the protests and the cycle of violence. It failed too because it foolishly treated an event which was bound to cause revulsion and demands for immediate action as if it were any other PR hiccup. But most of all, it failed because it had the bad luck to be the first big British company to become caught up in a lurching shift in society's percep- tions of the rights, responsibilities and rai- son d'être of business.

As consumers, producers and traders, we are undergoing an ethical boom in which morality has become the latest commodity in the market place. It used to be the envi- ronment which had us changing our wash- ing powder and buying bio-degradable packaging. Now we want to be sure that we are buying not only ecological soundness but moral superiority when we shop. Multi- nationals are not only expected to meet high environmental and ethical standards in their own operations, they are increasingly called upon to make judgments on the politics of the countries in which they are operational, and act accordingly. Demanding that Shell condemn the execu- tion of Saro Wiwa, the Body Shop's Anita Roddick, who rev- els in the role of a one-woman Eumenides, wrote: 'What power can stop this? Shell can stop this.' Like all good evangelists, Ms Roddick does not believe that piety is its own reward. She believes that Body Shop's real contribution to business ethics is imposing its view of ethical behaviour on others. Ms Roddick has banned Shell products from her production line and is encouraging cus- tomers to join a boycott.

So far Shell has stood alone in the dock of public censure for abrogation of moral duties, but not for long. This week, Marks & Spencer has also faced allegations about a labelling deception and alleged child-labour used by a supplier. Granada has cleverly entitled a critical programme this week, St Michael• has the halo slipped? because it strikes at the 'goodness' (in a moral rather than simply an efficient or benefi- cial sense) of the company's image. Being ethi- cal about your own company practice is no longer enough. Business fashion is for hyper-active 'cor- porate citizens', setting conditions for for- eign operations, keeping an eye on the host government and being prepared to protest and ultimately withdraw if its demands are not met. The Body Shop chain exemplifies this approach to the new marketable morality. That company's 'mission state- ment' includes commitments 'meaningfully to contribute to the local, national and international communities in which we trade' and 'to passionately campaign for the protection of the environment, human and civil rights, against animal testing.'

And why not? What could be better than the thought that as we load our trolleys with exfoliating scrubs and eye-brow tweezers, we are contributing to an increase in the stock of general benevolence? Mr Wheeler believes that companies are now under last- ing pressure 'to respond to ethical demands'. In fact the Body Shop does much more than this — it creates ethical demand the way one might stimulate appetite for a product. The subliminal play on association between phys- ical cleanliness evoked by the neatly pack- aged potions and creams and moral activism is compelling. One feels strangely virtuous declining a paper bag (the assistants ask if you would like one in a tone which suggests that taking one just might fell the last tree in existence). There is no pretence that these commitments reflect anything other than Ms Roddick's quirky world view. She simply embraces a panoply of good causes on behalf of her mesmerised shareholders and customers.

Ethical consumerism has been growing steadily in Britain. Its British roots are in the student boycotts of Barclays' Bank over its investments in South Africa. But America, where the influences of both Puritanism and the profit motive are less diluted than in Europe, was first to catch on to the marketability of doing good or more urgently, the adverse effects of being caught out doing ill. And it is American experience which has sounded early warning signals about the viability of the approach.

Ben & Jerry's Homemade Ice cream Inc. entered the business-school hagiography when, on capital of $4,000 they built up a company whose motto was 'Caring capital- ism'. To awe-struck analysts, journalists and shareholders, the couple would expound on their social mission which was, well, it depended. Weapons systems, rub- bish-strewn streets, gun-owners, rocket launches, native Americans and world peace were summarily damned or embraced by the duo Quick-fire, constantly shifting activism was the name of the game and the tubs of (very expensive) ice-cream were designed to reassure the consumer that every mouthful of toffee crunch struck a blow for justice. But behaving virtuously is not always as calculable as business visionaries imagine. Anxious to create a product to reflect their engagement on behalf of the natives of the Brazilian rain- forest, Ben and Jerry invented 'Rainforest Crunch' containing nuts bought from a Xapuri collective. The collective soon col- lapsed under the demand and they had to resort to buying the bulk of their nuts from commercial suppliers Well, all right, B & J cannot be blamed for the fact that some- times, even the kindest of winds blow no good, but as Hannah Rosin in her exposé of the company in the American magazine New Republic, points out, the ice-cream magnates' basic creed, once stripped of the touchy-feely pathos, is 'utterly conventional Wall Street Republican . . . A business- man's actions are beyond question.'

This is the central weakness of the claims of 'ethical business' to moral superiority. Compared with the traditional nostrum of maximising revenue and being ultimately responsible to the shareholders, the 'stake- holder thesis' of unifying the interests of suppliers, consumers and staff promises of a wider spread of benefit. It suggests decentralisation and a broader distribution of responsibility for the company's activi- ties. Tony Blair has caught on the appeal of the approach in promising to deliver a `stakeholder economy'. This is a potent phrase because it suggests that all interests, even those which are usually considered to conflict, can be unified under his vision. Mr Blair omitted to mention that it is derived from early American Republicanism and has strong libertarian overtones. In the micro-practice of business, it tends to mean that the character and beliefs of company guru(s) are reflected and magnified by a strongly centralised communications struc- ture. That part, at least, is fully congruent with New Labour.

There are disquieting overtones here. What say do the shareholders or customers have in the type of environmentalism or ethics that are embraced? Precious little.

As Mr Wheeler says of the Body Shop's campaigns, 'Anita generally chooses them. But the shareholders don't complain.' I ask him if Ms Roddick's liberal embrace of every bien-pensant cause does not lead to jumping on every passing bandwagon. Mr Wheeler is affronted. 'I don't think this is a band-wagon issue,' he says.

In the United States, the expansion in ethical capitalism has resulted in the flow- ering of a derivative industry engaged in watching, monitoring and advising compa- nies on how to spot real or perceived pit- falls and avoid them. The influential Ethics Newswatch sprang up to track down com- panies truanting from their moral duties. Britain now has the, admittedly, less strin- gent Business Ethics magazine, universities here have instituted business ethics depart- ments. John Drummond who runs an outfit with the sprightly name 'Integrity Works' is one of a new generation of consultants called in to advise companies on such mat- ters. 'A lot of companies have an uneasy feeling about the implications of some of their actions. They hate the feeling that they are vulnerable to being called unethical and they are not quite sure why.' An affable Scot, Mr Drummond purveys a soothing mixture of nostrums employing formidable psycho- logical, managerial and PR skills, from codi- fying a company's identity in grave declaration to counselling employees on their personal pricks of conscience. It all sounds fine. But it has nothing to do which ethics in any recognisable sense of the word. On closer inspection, it turns out that Mr Drummond is philosophically illiterate and proud of it. 'I don't pretend to be a theoreti- cian,' he says 'but I have years of experience of business and I know how to ask the right questions. I don't tell them the answers. Just clarifying the issues makes the company feel better about itself.'

The assumption of the ethical-business lobby is that only companies which satisfy demands for social and political activism could possibly feel good about themselves. Mark Moody-Stuart, group managing direc- tor of Shell International, disagrees. He does not use ethics consultants. 'I regard myself as an ethics director. It is part of my responsi- bility to decide what is acceptable and not something I would dream of farming out: From Mr Moody-Stuart, I hear for the first time in the debacle a robust defence of the company's policy not to involve itself in political affairs of the countries in which it operates. He divulges that Shell's statement of principles drafted in the 1970s ran: 'Shell shall not be influenced by those pressure groups that would have corporations make or withhold investment not on commercial criteria but in order to influence the course or pattern of political society. The latter is the role of citizens and governments, not business organisations [my itals].' Stirring words but deemed too forthright to be published and now buried in the archives.

Instead, the company chose the milk- and-water version which drew such criti- cism after Saro Wiwa's death. Shell's basic shortcoming thus lies in a sort of corporate cowardice which prevents it from defend- ing its core values. That is always the first step to losing a war of opinion.

One key argument in favour of those com- panies who prefer not to wear their ethics on their sleeve has gone unheeded in this debate. It is that world ethical management by multinational companies is inherently undesirable. The dominance by multination- als in the 1950s and 1960s of state affairs in some Third World countries rightly caused disquiet in the West. To encourage them to become involved in the decisions of governments — however reprehensible under a moral flag today is to invite the handing over of a large amount of power to unelected and only modestly accountable agencies. The same people calling for boy- cotts of Shell would be horrified if big busi- ness were allowed direct intervention in British politics. Interference is a wonderful thing, as long as it is for the sake of a cause we happen to agree with. Next time, it might not be.