Business owners who have chosen to close on Sept. 27, for at least part of the day, so employees can take part in the Global Climate Strike have made a calculated decision.
Sure, they will forego some revenue. The business bump that they could reap from being seen to be onside with those who urge action to stop climate changes, however, may in the long term increase sales, profit and employee loyalty far more than the association is likely to induce short-term losses.
Indeed, incorporating sustainability into a corporate brand, and being seen to be part of the solution to global climate change, makes sense for many ventures, say academics, such as Simon Fraser University professor emeritus Lindsay Meredith, and retail analysts, such as Dig360 owner David Gray.
Many Metro Vancouver-based companies, including MEC, Lush Cosmetics North America, Nature’s Path Foods and a grocer that forsakes single-use packaging, Nada, plan to support workers who want to attend the climate-change rally that starts at 1 p.m. at Vancouver city hall. Similar rallies are being held across Canada, and the well-known teenage global anti-climate-change activist Greta Thunberg will be in Montreal.
After the Vancouver protesters hear speeches, the plan is for them to march across the Cambie Bridge and along streets to Vancouver Public Library.
The level of commitment by businesses to employees who want to take part in the protests vary.
MEC told customers in an online letter that it will close all warehouses, and all 22 stores across Canada until 5 p.m. Stores will then open in most locations until 9 p.m.
MEC’s CEO Phil Arrata toldBusiness in Vancouver that his company will not compensate employees who choose to go to climate-related rallies.
“Those who do choose to work in the warehouse or in the store that day will get compensated,” he said. “Those who choose not to come to work will not be compensated. The reason we’re doing that is to be equitable. With all the part-time staff we have, we didn’t want it to be a bit of a lottery where if you were scheduled to work from 9 a.m. until noon you got paid to go join the demonstration, but if you happened to not be scheduled you weren’t getting paid.”
Lush, in contrast, is providing compensation to workers who were scheduled to work at the company’s 51 Canadian stores on September 27, spokeswoman Eva Cook told BIV.
Workers at its 199 stores in the U.S. had the same opportunity to leave work to protest on September 20, when anti-climate-change rallies took place in that country, she added.
“No one is forced to participate,” Cook said. “We’re just giving 2,216 staff in Canada the opportunity to go out and support the global climate movement should they wish to do so.”
Salaried staff at Nature's Path will be compensated if they choose to go to the protest, spokesperson Jemma Somervail told BIV. Those who are paid hourly would not be compensated if they choose to go to the event, she added.
Businesses historically were less willing to absorb costs for a social purpose
Influential economist and future Nobel Prize winner for economics, Milton Friedman, wrote a notable column in the New York Times in 1970 that held that a corporation’s first and only duty is to its shareholders.
He argued that if a business owner were “to make expenditures on reducing pollution beyond the amount that is in the best interests of the corporation, or that is required by law in order to contribute to the social objective of improving the environment” then “the corporate executive would be spending someone else’s money for a general social interest.”
Retailers, Friedman explained, would have to roll these extra costs into their products, and as a result raise prices for customers.
“That argument is falling into the gutter pretty quickly,” Meredith told BIV.
Today’s world, he explained, is one where almost everyone is on social media, and consumers regularly post messages about their experiences with corporate brands.
Business owners in this context are increasingly realizing that fusing their corporate brands with certain forms of social activities, or philanthropy, can foster customer loyalty while also helping to retain staff.
Gray told BIV that he believes that MEC has attracted executives particularly because of the company’s values.
“It’s not just entry-level employees that they are attracting, but also those at a senior level,” he said.
He added that MEC already has a strong reputation for environmental and social responsibility.
Last year it faced the ire of its members after news emerged that it was stocking water bottles, binoculars and other items made by a multinational corporation that also makes guns and ammunition. Then-CEO David Labistour quickly issued a memo to say that MEC would stop ordering and selling those products.
The key information for a business owner or CEO to consider when taking actions that link a corporate brand with a political stance, according to Meredith, is what the demographics and political views are of their company’s “target customer segments.”
The Saskatchewan Roughriders, for example, last week had to apologize to fans for its association with an A&W advertisement that showed fans of the football club eating Beyond Meat burgers. Ranchers in the prairie province were outraged.
Ventures such as MEC, Lush, Nature’s Path and Nada all have customer niches, however, that executives likely long ago deemed to be in tune with certain values, such as environmental stewardship.
Given that, it makes sense for the companies to forego revenue and publicly trumpet how much they are encouraging workers to attend climate-change rallies, Meredith explained.
Arrata told BIV that his company generates more than $1 million in revenue on an average day.
Nature’s Path has even gone an extra mile by helping to raise money for Global Climate Strike organizer 350.org. It has committed to provide all profits for one week, up to US$10,000, from sales on its website to 350.org. It will separately donate to 350.org other profit — up to $10,000 — made from sales on the website of local partner and grocery-delivery service Spud.ca, during the same September 20-27 time period.
On 350.org’s website the ecological lobby group makes clear that its goals are:
- “A fast and just transition to 100 per cent renewable energy for all”
- “No new fossil fuel projects anywhere”
- “Not a penny more for dirty energy.”
When told of those goals, Meredith said that he was surprised at how “hard core” its aims are.
Nonetheless, Nature’s Path’s decision to align its brand to that group by providing profits as well as by providing staff with time off to attend a rally is a clear sign of commitment to the cause, he added.
Be careful not to ‘greenwash’
One of the risks for an organization that wants to intertwine its brand with environmental sustainability is that it is unable to walk the proverbial walk. If that is the case, it could be called out for “green-washing” when customers find out that the company is not fully authentic, said Meredith.
That is why it may not be a good idea for a larger conglomerate or a diversified retailer to close stores so employees can attend an issue-oriented political rally, he said.
At London Drugs, for example, the chain has a large pharmacy business that caters to a wide range of customers, including many seniors, as well as an electronics department, cosmetics department and many other departments, Meredith said.
“There’s a danger here,” he said. “I [as a retailer] might alienate some customers who don’t share that ideology, who don’t believe in climate change, for example. Sometimes it is very tricky.”
When asked if it might be wise for a larger retailer with a diversified mix of products to close stores on Vancouver Island, for example, but not in Alberta, Meredith said that this move would likely backfire.
“Now you are a bit of a green-washer,” he said. “That leaves you with a lot of mud on your face, and you could hurt yourself. The green segment would look at a London Drugs, for example, if they did that, and say, ‘You guys are a bunch of oil-pipeline clowns.’ The oil-patch guys would look at it and say, ‘You’re a bunch of damn tree huggers.’ Now you’ve annoyed both segments.”
Arrata told BIV that his company never contemplated keeping its stores in Alberta open.
“Across Canada, we haven’t had any negativity from staff. They’re very supportive in terms of what we’re doing — allowing them to have the choice, and just demonstrating our co-op values. The fact is that community is important to us, being able to recreate outdoors is important to us and climate is important to us.”