I. Transparency & Motivation
If enacted, Corporate Responsibility Rankings would do two very important things. First, it would give a clear, simple look into the behind-the-scenes behavior of companies so that consumers could easily buy from companies that are doing the right thing. Second, by rewarding higher-ranked businesses with more sales, CR Rankings would for the first time create a major market force pushing all businesses to be more responsible.
As conscientious shoppers, we probably all feel pretty clueless. Most of what we buy gives us no indication of how responsibly it was made. And yet the few products that do are almost just as confusing. This bread says it’s USDA Organic, but what is its carbon footprint? This air conditioner has the Energy Star mark, but how well were the workers paid who made it? We tend to have that sinking feeling that the purchases we’re making everyday make a huge impact on the world…but that we also have very little way of knowing what exactly that impact is and how to steer it in a better direction.
CR Rankings would end this confusion. A detailed profile of the behind-the-scenes behavior of each company would be posted online, and all of this information would be synthesized into one easy-to-compare ranking. Even better, these rankings would then be conveniently located right there in front of you whenever you make a purchase. With CRR, it couldn’t be any easier to buy from more responsible companies.
The Motivation to Improve
That new transparency would be huge for consumers. But CRR would have a second, arguably much bigger impact: businesses would finally have a motivation to improve, a motivation to better treat their workers, the environment, and the communities in which they operate.
Right now we have the opposite. Right now businesses are motivated to be as irresponsible as they can get away with. Why? Because the free market rewards them for being more irresponsible.
Capitalism is for the most part a wonderful system, especially in how it promotes efficiency and innovation. If Jane’s toaster costs a few dollars less than Bob’s, then her toaster will most likely outsell his. Being outsold then motivates Bob to find whatever ways possible to cut his costs, perhaps streamlining the assembly process and trimming out an unnecessary inch from his toaster’s height. But this drive for lower costs may also push Bob to do some not-so-wonderful things, like cut his workers’ pay, use cheaper yet more polluting fuels, and exploit loopholes in the law to avoid paying his proper share of taxes. Shady as these other options may be, they’ll still cut his costs, too. In other words, the free market rewards innovation and greater efficiency, but it also rewards such bad behind-the-scenes behavior.
For the better, the Bobs and Janes out there have built our modern world—toasters, airplanes, the internet, modern medicine, you name it. For the worse, though, their corporate irresponsibility has fueled many of our biggest problems, like rising income inequality and global warming.
Corporate Responsibility Rankings would turn that irresponsible behavior around. In the same way that lower prices do, higher CR Rankings would attract more customers. That would push any company with lower rankings to become more responsible, raise those rankings, and win back more customers. Eyeing Bob’s higher CR Rankings, Jane might give a raise to the lower half of her employees. After Jane then takes the rankings lead, Bob fights back by eliminating a half dozen toxic chemicals from his manufacturing process. To keep the lead, Jane ditches the same bad chemicals and starts regular donations to a local food bank.
These changes might sound small, but small changes build up. Just as the tinkering Bobs and Janes have bit-by-bit built our modern world, with CR Rankings they would bit-by-bit fix many massive, seemingly impossible problems. With just one simple law we could turn around global warming and income inequality.
We now invite you to dive deeper into why we should enact CRR. From here we will first discuss the vital importance of CR Rankings given the failure of all other approaches to solving problems stemming from corporate irresponsibility in Our Current Approach Is Doomed to Fail. We will, in other words, dissect why laws like the minimum wage and product labels like USDA Organic do the world a great amount of good but will never solve problems like income inequality and toxic chemical consumption. We will then also see how CR Rankings will succeed where these others fail.
If you still aren’t sold at that point, we will then tick through a list of the many major Problems CRR Would Help Fix. Finally, we will address what could be the nagging doubts you may have about a law like CRR in But…Why Pick on Businesses? and But…Isn’t It Impossible?
We hope that you will come to see CRR as a very necessary law, one that will give consumers a transparent view of the companies they are buying from and turn around a score of seemingly impossible problems, all in a business-friendly way that is (paradoxically to some) much more politically feasible and effective than its alternatives.