incident such as in the two latest cases, such long-‐term strategy leaves a company vulnerable for further exposure and arguably more severe damage if the respective company does not deliver on their promises. Volkswagen invested heavily, according to themselves, in their
‘clean diesel’ and cars with lower CO2 emission thus improving customer satisfaction through product quality. Since it turned out to be empty marketing more than actual product quality and the reality of such promises become easier to determine and expose through information technology, it could be that the geographic aspect of such scandals limit the impact to such a degree that greenwashing is still economically feasible.
5.1.2 Geographic factor
Both Nike and Apple moved the production of their products to Asia in the attempt to reduce their costs, but outsourcing their production also initially came at the cost of less control of the conditions. Furthermore, the attempt to lower the cost also meant that both companies had to compromise their ethical responsibility and exploit the local labour force. Although the two scandals occurred with an interval of almost 20 years, violations of human and workers rights were the focal points in both cases. Another similarity, despite the development in information technology, is the continuing increase in sales in the companies’ largest markets, which in both cases was not either China or Indonesia. The first three cases all started with local news coverage of various sorts that eventually moved on to US-‐ and European media.
Both Nike and Apple experienced increase at the geographic market in which the scandal occurred, but these markets were undoubtedly their smallest markets and thus easier to increase. Coca-‐Cola however experienced both massive decrease in sales and production in India due to the closure of their facilities, but besides the minor protests at US universities, it did not affect sales anywhere else.
Similarly, Volkswagen experienced falls in both revenue and sales in Europe and the US, but the Chinese market, which is Volkswagen’s biggest market, continued to soar in both parameters. Thus, it seems that western markets are not affected by scandals in Asia and vice versa, Asian markets such as China may not react in the same way as the US and Europe to an environmental scandal exposed by the EPA. Put bluntly, western consumers may not care
enough about how their favourite products are produced in Asia to actually punish the companies in the long run and vice versa, Chinese consumers may not have the same interest in western environmental standards as people in Europe or the US. If this is the case, where potential short term financial loss can be either minimized or avoided due to previous CSR and reputational damage neither is long term, it is arguably one of the reasons why companies continue to greenwash.
5.1.3 Consumer or corporate social responsibility
As the number of companies reporting on responsible corporate behaviour has increased along with the increased expectations on the subject, surveys like the one by the Nielsen Company are becoming increasingly common. Whether the aim is provide further incentive for companies to produce more green products or forcing consumers to think about their ethical shopping behaviour is difficult to determine, but it could be argued that the result of Nielsen Company’s test and similar ones may encourage companies to redesign their business model to accommodate the ethical minded customers. 55% of the respondents said they were willing to pay more for products and services from companies committed to positive social and/or environmental impact. Without having compared prices for Volkswagen diesel cars and similar brands, Volkswagen should have been able to charge more for their clean diesel cars compared to other products i.e. cars with petrol engines. However, the social discourse regarding one’s ethical behaviour and consumer intentions may be easier to “talk than walk”.
Looking at the sales figures for both Nike and Apple and how both companies continued to increase sales after they were initially exposed indicate that consumers may not be as willing to change their behaviour when it comes to their favourite products and they need new shoes or a new phone. Do consumers not have an equal responsibility for buying or not buying ethical produced product or refuse to buy products produced under unethical conditions? It could be argued that there should be a difference between the wish of buying more sustainable and responsible produced products and not buying or boycotting products produced in non-‐sustainable ways, but this would arguably be a bit contradicting and not very convincing.
While we have argued that the ethical consumer segment has not reached a significant size until recent years and therefore not has had an influence on especially Nike’s sales in the 1990’ies, Apple’s case around 2010 should have been impacted if close to 50% of consumers cared about the circumstances under which the products were made, but the soaring sales numbers as well as their stock value indicate that neither consumers nor analysts punish corporate misbehaviour to such a degree that companies are forced to take drastic measures in their production or even in their CSR practices. Similarly, Volkswagen showed signs of returning to normal sale figures after only six months. As argued above, it is important to have an implementation plan in place if consumers wish to change their purchase behaviour. If consumers do not have this, we as consumers may struggle to be as responsible as we otherwise express we are. Thus, it would seem that other factors such as brand value and price of products may play an equally or bigger role than consumers noble intentions. But if we as consumers focus more on the economic aspect of our purchase decisions compared to the ethical side, are we then even allowed to criticize companies’ decision to do the same?
5.1.4 Time for CSR 2.5?
As Visser (2011) argues, the fact of the matter is that, beyond basic legal compliance, the markets are designed to serve the financial and economic interests of the powerful, not the idealistic dreams of CSR advocates or the angry demands of civil society activists”. As argued above, there are several benefits that may lead to improved financial performance and they all derive from investing in CSR. If companies are able to achieve these through illusive product quality or falsely acclaimed image, then why should they commit in any significant way to CSR program? This interpretation of reality could explain why companies continue to participate in greenwashing, but if both corporations and consumers contribute equally to the problem, could the solution then be to start looking at CSR in a new way? The problems of the current situation mainly revolve around the discrepancies between talk and action, which have been exposed for decades and continue to do so. Visser (2011) argues that CSR in its current forms fails because it is both incremental, in the sense that it is incapable of match the scale and urgency of the problems, and often also uneconomic for companies, as short-‐term markets predominantly reward companies that externalise their costs to society. Nevertheless, companies continuously announce CSR ideals, which in turn create expectations of
responsibility from society. Christensen et al (2013) have argued that these expectations for responsibility are often interpreted by organisations as a demand for (more) communication assuming that stakeholders are interested in knowing their values and ideals and thus organisations are inevitable forced into behaviour that may be regarded as hypocritical (Christensen et al, 2013).
However, if society evaluated the ‘talk’ part through other lenses, could CSR then be a communicative tool used to strive for a better future instead of a parameter of which companies are constantly measured by and judged on? And could the accusations of hypocrisy be replaced with common aspirations towards a united effort?
The elements of hypocrisy, where words, decisions, and actions have varying degrees of correspondence, have often been the root of greenwashing. This type of hypocrisy has been defined as duplicity. This type of hypocrisy emerges when a “company is involved in fraud or seeks to hide an unpleasant truth behind pleasant words” (Christensen et al, 2013) as it has been identified in the four cases in the analysis. However, hypocrisy can also be used as aspiration and for companies to stimulate actions and utter the wish for a better future.
Critics would argue that a substantial difference between the two is the lack of actions in the latter and when it comes to social and environmental responsibility, this problem needs to be eliminated. But talking in this sense could also be considered to be actions and that this action is necessary for companies to think of and discover new solutions and especially when it comes to issues where previous ideas have been inadequate. Thus, hypocrisy in the form of fraud and lying will inevitably create cynicism, but in its other form, it could have the potential to foster both organisation and societal change affect their priories. Therefore, the difference between the two is not purely rhetorical if talk about change is considered a necessary action.
It should however be noted, that expressing intention is not the same as actually having and pursuing these intentions and in this sea of companies, some may see the opportunity to mislead or lie to stakeholders. But as long as there are opportunistic companies who see an opportunity to exploit this debate, there will be critics of such actions and as the number of stakeholders grow, partly through information technology, “talk may be cheap, or at least cheaper than other forms of action, but it is not as cheap as it used to be”(Christensen et al,
2013). The media has the power to make the invisible visible for everyone and stakeholders in general have become more empowered to examine and distribute actions. We have become more informed about the subjects that used to be invisible through information technology and a growing interest. However, greenwashing cases continue to emerge and they arguably will until long-‐term public or legal punishment on corporations is enforced or we change our expectations to companies’ abilities to change the world on their own. While we have become more informed, it could be argued that we are drowning in information and in this endless sea of information it is increasingly difficult to distinguish between useful and useless information. Furthermore, the amount of information regarding corporate misbehaviour only accounts for a fraction of the information we are presented with on a daily basis and that the time, the timespan of new cases have shortened to such a degree that new cases can emerge before judgement can be passed on an international company. Thus, it is worth considering if the diverging courses of companies and society characterised by accusations, unachievable goals and morally ambivalent actions should aim towards a more common course of CSR 2.5.
5.1.5 Suggestions for further research
This thesis’ approach towards the role of information technology within CSR compliance can be considered as highly generic as the concept is examined through a theoretical framework as well as being supported by and elaborate on our assessment by applying a limited selection of empirical data.
As stated earlier, we believe the concept is relevant within the field of CSR management as companies are approached by stakeholders on an increasing number of channels regarding subjects such as their CSR. However, we are also aware that there are certain challenges that this thesis does not examine. Since the theory and studies on the link between information technology and CSR compliance is relatively limited, we believe the following to be important implications for future research on the subject.
As outlined in the delimitation, the scope of this thesis does not cover the aspect of monitoring, which is undoubtedly also an important aspect of modern information technology. Unlike the scope of this thesis, this would focus on how information technology