Making Conscious Capitalism Work
Many companies are finding that conscious capitalism is good for the brand. What's called corporate social responsibility can also boost employee morale and sometimes even the bottomline. In the second of a three-part series, WNPR’s Sujata Srinivasan looks at the ways in which businesses are making virtuous practices work for them.
“The fishing now upstream since this fish ladder went in is premo; it’s extraordinary. It’s much better than it’s ever been. I’m just psyched you guys have done it.”
Kyle Quinn is a neighbor of StanChem, a chemical company in East Berlin. He’s walked over to take a look at the new fishway at a dam on the Mattabesset River. Thanks to the structure, he’s caught and released as many fish in a week as he used to in an entire year. StanChem needs the dam water for industrial safety, but was happy to allow the state and nature conservancy organizations to build the fishway – a move required to preserve the river’s ecosystem. CEO Jack Waller says for the first time in decades, alewife, bass, trout and carp are migrating upstream.
“We feel actually that if we leave the place a heck of a lot better off in the future than when we came in, we’re doing a good thing for everybody. Some of us are older like myself and may have grandchildren and so on. And we want to have them have a better place than we’ve had.”
Sharing a private infrastructure for public good is one of many ways for companies to engage in CSR, and it’s great for reputation and employee morale. Volunteering is another. On the Community Farm of Simsbury, Cigna employees engage in teambuilding as they pull out weeds from onion beds – the produce will be donated to families in need. Cigna’s Judy Hartling.
“We painted recently at the Oddfellows Playhouse. We come out to places like Community Farm of Simsbury. We volunteer a lot at Foodshare in Bloomfield. Actually have a garden at Cigna, in which we grow vegetables and donate them to Foodshare.”
Employees of Aetna also volunteer and the insurer has awarded more than $400 million dollars in philanthropy. The giving is meant to add value to its business. This year for example, Aetna’s inviting grant applications from nonprofits, promoting healthy food. CEO Mark Bertolini says that as much as one third of the company’s healthcare spending each year is related to obesity.
“That goes back not just to exercise, but back to what we put into these machines we call our human bodies. We have been encouraging local communities to get involved and helping people understand what is healthy food. So our whole food initiative is really aimed at this pandemic we call obesity, which drives such a huge part of our healthcare costs.”
Public companies like Cigna and Aetna must first provide returns to their investors before choosing to do some good for society. But in the rare case of Newman’s Own in Westport, founded by Paul Newman, the business exists just to fund charitable causes. CEO Bob Forrester.
“It really reflects what I think are the two most widely admired aspects of the American character. On one side, it’s business entrepreneurship. We go out and we compete, we have to innovate, we hire, we’re a small business, we do everything a business does that really is a strong strength of the United States. The other aspect of the character is that of philanthropic generosity.”
Even though Newman’s Own gives away all of its earnings to nonprofits, Forrester says the business side is just as important – quality comes before profit and low employee turnover is a matter of pride. But often, companies engaged in CSR programs could slack off in other areas, says Deborah Kidder, professor of management at the University of Hartford.
“There’s a long history of those disconnects. I mean Gap was targeted quite a while ago for working conditions, and Walmart is routinely targeted about the fact that while they promote sustainable products, they’re criticized for how they treat their employees in terms of pay and healthcare and stuff.”
Kidder explains the paradox.
“Moral equilibrium theory argues that there’s a balance out there and if you have done really well in one area, you know, you can just say, ‘Oh I did really well here, so I’m going to compensate by not doing so well here. So I rode my bike to work today, so I can use a plastic cup today and throw it away.’”
Companies face so much pressure from competition, customers and shareholders that doing well is essential for survival, but doing good is considered optional. A business is unlikely to trade one for the other unless there’s some kind of brand and bottomline impact.
For WNPR, I’m Sujata Srinivasan.
With help from intern Ava Tankala.
Disclosure: Newman’s Own underwrites WNPR programming.