Strategy #2: Leveling the Playing Field
The booklet “Saving the Titanic” was originally published by Paul Freundlich, founder of Green America (formerly Co-op America). It contains a dozen green strategies for our society to avoid the “icebergs” of climate change, nuclear catastrophe, economic collapse, and other ills. Today, we excerpt Solution #2, and over the coming days, we’ll share the rest of Paul’s solutions:
In a global economy, there are huge disparities between standards of living, national policies and the cost of production. Those disparities will only be mitigated by a corporate and governmental commitment to leveling the playing field of competition. Individual companies, like the GAP, have agreed unilaterally to improve conditions, far beyond what they could be forced to do, but seldom does one company control an entire industry. In the absence of international controls, companies can be encouraged to cooperate on industry-wide agreements establishing a base standard for wages pegged to local economies, and committing to safe working conditions, the right to organize, reduced environmental emissions and respecting human rights. Reaching agreements guaranteeing that business will not use the leverage of its purchasing power to exploit, if it is done in con-cert, will avoid an adverse selection against those acting for the future.
How: Companies already share agendas in trade associations potent as OPEC, and price-fixing upwards is not unknown. Establishing compliance standards would require a process analogous to GRI‘s successful development of reporting standards through multi-stakeholder collaboration, backed by the UN, EU and national governments. Moderating the rampant power of corporations through multi-stakeholder participation means that our common interest in a sustainable society is represented. The original intent of corporations as responsible citizens gains respectability.
Result: As this strategy is implemented, it will reduce the at-traction of outsourcing. In this scenario, the real costs of environmental compliance and fair employment are added to the cost of doing business in even the poorest economies. The benefits are both to workers and environment in those poor countries, but also increased competitiveness for workers in industrialized nations, with consumers accepting marginally higher prices.
Probability: Positive signs in the apparel industry, but strong resistance from countries and businesses which see the supply of cheap labor as their competitive advantage. Not an easy strategy, but one of the most powerful.