The bottom line for big business is return on investment for shareholders. However, the way a business is perceived as environmentally friendly or destructive seriously affects their profits. This is why corporations increasingly try to persuade the population at large that they are our ethical guardians and conscientious caretakers of the environment.
Take the mining industry’s reaction to the recently neutered resources super tax (RST). The Minerals Council of Australia released advertisements claiming that the new tax would result in catastrophic job losses and a crippled Australian minerals sector – emphasising that their main concern was the loss of jobs. Yet the very same industry, during a time of record profits from November 2009 to March 2010, made 10,500 forced redundancies. It’s clear that this talk of “community concern” is only used when it suits the needs or image of big business.
The outcome of the RST served to highlight the government’s closeness to the mining companies. It was a reminder of the powerful influence major corporations maintain over our political processes. Transparency simply doesn’t exist and public cynicism inevitably grows.
The problem isn’t isolated to the mining industry. Even the most common aspects of our day-to-day of life, such as the water we drink, are affected. In 2008 Mount Franklin (a subsidiary of Coca-Cola Amatil) ran a trio of “earth-conscious” promotions. Prizes included a hybrid car and a trip to an eco-resort in the Daintree rainforest. This ethical posturing as “environmentally friendly” only served to obscure the environmental consequences of producing bottled water.
Coca-Cola paid just $181 for a water-extraction licence that allowed them to take 66 million litres of water from the Mangrove Mountain aquifer in NSW and yet bottled water is still more expensive than petrol. Even though PET bottles are completely recyclable, only 35 per cent of the bottles actually get recycled. The remaining 65 per cent of bottles end up in landfill, taking over 20 years to break down.
Because they have no reason to behave ethically, other than fear of a negative public image, some industries will use all means at their disposal to generate profits. This includes hypocritical marketing campaigns. For example in 2004 BP launched a nationwide ad campaign in the US framing itself as the “global leader” in clean energy production. Since becoming the “global leader”, BP has been involved in the dubious manipulation of the US propane market (in 2004); a devastating explosion at a BP refinery in Texas, killing 15 workers and injuring 170 (in 2005); and a spill of 260,000 gallons into the Arctic tundra from a BP pipeline in Alaska (in 2006). Throughout that period, BP’s sales rose from $192 billion in 2004, $240 billion in 2005 and $266 billion in 2006.
Following the Deepwater Horizon spill in the Mexican Gulf, the consequences of which are still immeasurable, new information is emerging every day on the many ways in which BP cut corners when it came to safeguards on the rig, some which have been implicated in the current disaster. Yet BP’s outgoing CEO, Tony Hayward, received a 40 per cent pay increase in 2009 based on BP’s “improved performance.” On leaving BP, Hayward said that his company had been the “model of corporate social responsibility” in addressing the Gulf of Mexico disaster.
The simple fact is that the majority of large corporations will do whatever it takes to generate increased profits. We shouldn’t fool ourselves by thinking otherwise. And governments are often helping. In the US, both Republican and Democrat members of congress have received large contributions from BP. The top 10 recipients, including Barack Obama and his opposition in the 2008 presidential election John McCain, netted combined contributions from BP in excess of $388,000. The transformation to a low-carbon economy, inevitable through climate change and a scarcity of non-renewable resources, fills some people with the hope that this type of business culture will change. But this is not certain.
For instance, links have been discovered between the transnational electric car company Better Place and the Israeli army’s illegal behaviour in occupied Palestinian territory. According to the Sydney Morning Herald in July, Ben Keneally, husband of the NSW Premier, runs the Australian arm’s marketing and strategy and the firm is currently lobbying for NSW government support. The company has built charging stations along Highway 443, a road that runs 30km through Palestinian territory in the West Bank. Part of the highway remains inaccessible to indigenous Palestinians despite an Israeli High Court ruling demanding equal access for both Palestinians and Israelis. Just because a company makes electric cars doesn’t mean they are ethically or environmentally sound.
The idea that industry should be left to make its own ethical decisions is both dangerous and misguided. Unless Australians take the time to listen carefully to what they’re told is “good” or “green”, some big business will continue to get away with unethical behaviour. But the fact that industry feels the need to engage in ethical and environmentally friendly marketing is a positive sign. It suggests that community pressure does have an influence on how corporations behave.