When it comes to protecting the environment or improving workers’ conditions, you might think the biggest companies are making the biggest positive impact.
Multinationals like Apple and McDonald’s are so large that –just by taking a few significant steps towards sustainability– they can change vast swaths of the global marketplace.
But it turns out that the largest corporations aren’t leading on this issue. It’s the small and medium-sized businesses that are out in front on compliance with sustainability, worker safety and other standards.
Big companies deserve some credit. Because of the scale of their operations, every improvement is difficult. I have been the CEO of an industrial business, and as an investor I visited more than 1,000 manufacturers. I know how hard implementing higher standards can be.
Even with this caveat, multinationals like Apple and McDonalds could do better. McDonald’s still doesn’t offer recycling bins across its network of stores.
McDonald’s still doesn’t offer recycling bins across its network of stores.
Apple was shamed by the BBC just before Christmas in an episode of Panorama that included footage of factory workers so exhausted that they were sleeping right at their workplace.
Other disturbing BBC footage showed young boys mining in filthy and dangerous conditions, with the product of their labor to ultimately be used in Apple’s devices.
It’s the little guys who really stand out in making the world a better place. In part, this is because the big corporations outsource their compliance to them.
This is why almost one third of the inputs for food and beverage packaging by Finnish supplier Huhtamaki are recycled. Huhtamaki has very high environmental standards, not for its own benefit, but to reduce its “customers’ environmental footprint.”
Simply by purchasing from a green supplier, a big company can claim to be more sustainable – without having made a single change to its own operations.
…smaller companies have beaten the big ones at their own game of producing excellent products with little environmental impact.
In other cases, smaller companies have beaten the big ones at their own game of producing excellent products with little environmental impact. Interface may be the world’s largest maker of modular carpet, but its entire net worth is no more than a rounding error for $700 billion Apple. Despite starting as a very petroleum-intensive company in 1994, Interface has since reduced energy use by 43% and fossil fuel intensity by 60%.
Interface founder Ray Anderson shows larger manufacturers like Apple what’s possible, by aiming to be the world’s first sustainable company in all dimensions, and to actually become “restorative” to the environment.
In the fast food industry, up-start Yeah! Burger is showing globe-spanning chains like McDonalds how to be green, with environmentally friendly ingredients, compost, 100% recycled paper supplies, energy efficiency and carbon offsetting.
Even Yeah! Burger’s loyalty cards are made from plants – although the company doesn’t advise that you eat them.
No, the largest companies aren’t leading. Their potential to do so may never be realized.
But, as CEO of QualityTrade.com, I have found reason to hope. I have seen that small and midsize suppliers are more responsive to their customers. Their buyers are demanding more solutions.
Change has begun at the bottom, and it will work its way up.
This article was originally published on CSRwire
Nigel Johnston is CEO of QualityTrade.com, the next generation platform for global wholesale trade. He is former CEO of international recycling and waste management business United Resource Management.