Nov 6 2007
Marks & Spencer and Wal-Mart drive the ethical agenda of Retailers, which has been dominated by environmental issues in 2006-2007, states a report released by Geneva-based ethical reputation research firm Covalence, Covalence Retail Industry Report 2007.
Marks & Spencer is a proactive leader: it appears in many positive news items and maintains a remarkably low level of demands (negative news items). Wal-Mart, the largest retailer in the world, is more of a reactive leader: having been a central target of critical campaigns for many years, in 2006 the company has started an impressive move towards Corporate Social Responsibility (CSR), as the EthicalQuote reputation curve shows.
From the bottom (Wal-Mart) and from the top (Marks & Spencer) of the ranking, the two companies are setting the pace to the whole industry. Those which are neither proactive nor reactive will be left behind as the industry continues to move forward.
Comparing the EthicalQuote curves of ten industries, the Retail industry has sensibly improved its reputation recently, after years of criticisms due to labour issues within supply chains. Eight out of the top ten positive issues registered for 2006 – 2007 deal with the environment. These eight issues are: Carbon footprint, green, or “Eco Options” labels on products; Eco-textile clothing line; CO2 Emissions cuts in stores or supply chains; Marks & Spencer’s “eco-plan” includes going carbon neutral; Pushing suppliers to improve sustainability – Packaging Scorecard; Companies reduce the use of conventional plastic bags; Environmentally responsible products.
Major negative issues affecting the ethical reputation of retailers are dealing with working conditions: International workplace abuses or low wages in the supply chain; Anti-union tactics or violations of right to organize; Ratio of CEO pay to worker pay; Companies forcing employees to work through breaks; Unethical behavior; Low wages; Unfair working conditions at Bangladeshi factories; and Violation of ETI due to worker exploitation in supply chain.
We can suppose that the ethical reputation of Retailers will continue to progress as long as the current environmental wave lasts. Alternatively, a possible climate fatigue and the return of labour issues important in the public scene could bring difficult times to Retailers. There is a serious risk of being perceived as trading-off,or hiding labour issues behind green credentials (perception of greenwashing). Such a perception could harm years of efforts in reputation-building. Companies able to demonstrate a wide, balanced spectrum of CSR commitments in the social, economic and environmental dimensions will obviously be better equipped to respond to this risk.
More information on Covalence Retail Industry Report 2007:
http://www.covalence.ch