No Good Deed Goes Unpunished for U.S. Corporate Citizens

Agenda-Setting Financial Insight.
Sept. 13 2012 6:11 PM

No Good Deed Goes Unpunished for U.S. Corporate Citizens

96801651
Whole Foods, Apple, and other U.S. companies known for being socially responsible are the most likely targets for social activists.

Photo by Justin Sullivan/Getty Images

No good deed goes unpunished for U.S. corporate citizens. The likes of Apple and Whole Foods draw far more protests than rivals that pay less attention to social responsibility, new research shows. That may make admirable firms even better, but it gives dodgy ones a free pass. 

Virtuous behavior has its rewards. Reputation accounts on average for 16 percent of a company’s value, according to Financial Analysts Journal, and firms on Fortune magazine’s list of most admired companies typically outperform the S&P 500 Index. 

But efforts to save the whales and similar activities don’t necessarily appease critics. A recent Northwestern University study found that companies with the strongest reputations for good social behavior were also the most frequent targets of consumer boycotts. Those in the top third of the Fortune list led the way, along with firms that issued the most press releases announcing socially responsible projects. 

Johnson & Johnson, for example, was singled out for a boycott in 2009 because some of its products contained potentially harmful chemicals. Critics also called for a boycott of Whole Foods, known for its socially responsible policies, in the same year because its chief executive publicly opposed President Barack Obama’s healthcare legislation. Organic food activists criticized Starbucks a decade ago even after it stopped using milk that contained artificial growth hormones. 

The study’s authors conclude that these companies’ high profiles made them especially enticing targets. After all, one goal of activism is publicity for a cause, and going after the biggest, most respected names is one way to maximize that. 

Advertisement

Even companies genuinely committed to social causes fall short. The upside of being under a critical spotlight is that they may improve further. Apple, for instance, seems to have forced major improvements at the Chinese factories of supplier Foxconn, since concerns over working conditions surfaced earlier this year. The iPhone and iPad producer, while not perfect, is a leader in this area - yet more criticism emerged just this week. 

But there’s a cost to this approach. With attention focused on how the good can get even better, the least socially responsible companies escape the kind of scrutiny that might force them to catch up. 

Read more at Reuters Breakingviews.

Reynolds Holding is a Breakingviews columnist who writes from New York about the law in conjunction with Reuters Legal. Before joining Breakingviews, he was a national editorial producer for the Law & Justice Unit at ABC News, a senior writer for Time magazine and the executive editor of Legal Affairs, the first general interest magazine about the law.

TODAY IN SLATE

History

The Self-Made Man

The story of America’s most pliable, pernicious, irrepressible myth.

Michigan’s Tradition of Football “Toughness” Needs to Go—Starting With Coach Hoke

Does Your Child Have “Sluggish Cognitive Tempo”? Or Is That Just a Disorder Made Up to Scare You?

The First Case of Ebola in America Has Been Diagnosed in Dallas

Windows 8 Was So Bad That Microsoft Will Skip Straight to Windows 10

Politics

Mad About Modi


Why the controversial Indian prime minister drew 19,000 cheering fans to Madison Square Garden.


Building a Better Workplace

You Deserve a Pre-cation

The smartest job perk you’ve never heard of.

Don’t Panic! The U.S. Already Stops Ebola and Similar Diseases From Spreading. Here’s How.

Parents, Get Your Teenage Daughters the IUD

The XX Factor
Sept. 30 2014 12:34 PM Parents, Get Your Teenage Daughters the IUD
  News & Politics
Politics
Sept. 30 2014 6:59 PM The Democrats’ War at Home Can the president’s party defend itself from the president’s foreign policy blunders?
  Business
Moneybox
Sept. 30 2014 7:02 PM At Long Last, eBay Sets PayPal Free
  Life
Gaming
Sept. 30 2014 7:35 PM Who Owns Scrabble’s Word List? Hasbro says the list of playable words belongs to the company. Players beg to differ.
  Double X
Doublex
Sept. 29 2014 11:43 PM Lena Dunham, the Book More shtick than honesty in Not That Kind of Girl.
  Slate Plus
Behind the Scenes
Sept. 30 2014 3:21 PM Meet Jordan Weissmann Five questions with Slate’s senior business and economics correspondent.
  Arts
Brow Beat
Sept. 30 2014 4:45 PM Steven Soderbergh Is Doing Some Next-Level Work on The Knick
  Technology
Future Tense
Sept. 30 2014 7:00 PM There’s Going to Be a Live-Action Tetris Movie for Some Reason
  Health & Science
Bad Astronomy
Sept. 30 2014 7:30 AM What Lurks Beneath the Methane Lakes of Titan?
  Sports
Sports Nut
Sept. 28 2014 8:30 PM NFL Players Die Young. Or Maybe They Live Long Lives. Why it’s so hard to pin down the effects of football on players’ lives.