Is There Really Such a Thing as Benevolent Capitalism?

11 Dec

Current corporations often work to create a green image, but how many corporations actually follow through with their environmental declarations. Sheri Flies, assistant general merchandise mangager and a seemingly satisfied employee, portrayed COSTCO Wholesale Corporation in a positive environmental and social light. She asked for reflection on the existence of benevolent capitalism. Benevolent capitalism is an important concept to strive for. Often, not all the pieces of a corporation are as environmentally friendly or as humanitarian as the overall corporation’s ideals and different parts may be in conflict with each other. Therefore, corporations are usually neither all bad nor all good. Costco is clearly working to be a benevolent corporation; they are leaders of corporate social responsibility and environmental issues, but they are not perfect in either aspect.

Costco is a leader in corporate social responsibility because of its unique business strategy; employees are well paid and prices are low, but many business analysts might argue that Costco does not make enough profit to satisfy shareholders1. Chief executive of Costco, Jim Sinegal, is wise to reject Wall Street’s profit demands because this model creates customer loyalty and people still but the stock because they love the company. In a Harris Interactive ranking, Costco’s standing was 10th most highly regarded company in America2. Also, Costco works with its suppliers to make sure that everyone is getting a fair return. The social responsibility of Costco is better than some of its major competitors like Wal-Mart.

A black mark on this record of social responsibility is the class action lawsuit that is currently being formed about discrimination against female employees seeking assistant general manager and general manager positions. The informal system of promotions Costco has set up makes this discrimination possible, because without set rules human bias can effect decisions. Men have been promoted earlier than women with similar qualifications, and women have not been rotated into management training positions that Costco thinks are necessary for promotion. The women tried to get Costco to change its promotion policies without a lawsuit, but Costco did not change them. This trial is scheduled to begin in January of 20143. Even with Costco’s higher pay of workers, the glass ceiling can still hold women back within this mostly benevolent corporation.

Sustainability is discussed every year in Costco’s annual report. Costco has a Corporate Sustainability and Energy Group and a greenhouse gas reduction program. Some examples of actions that Costco has taken are building warehouses at silver level LEED standard, solar photovoltaic systems at sixty-three facilities, building with eighty percent recycled steel materials, and using non-chemical water treatment systems. Steps are also being made toward more efficient recycling, implementing energy-saving lighting including LED and HID lights, and eliminating polyvinyl chloride (PVC) plastic in packaging4. While these are all great steps, many more steps would need to be made for Costco to come close to being a sustainable corporation.

Last summer, Costco paid 3.6 million dollars to settle a lawsuit in California about its employees’ improper disposal of hazardous materials. According to the lawsuit, Costco employees didn’t sort or label unsold or returned hazardous materials like bleach, batteries, pool chlorine, nicotine patches, and oven cleaner over a period of five years. State law requires the proper disposal of these materials within 90 days, but some were put in the normal trash or not thrown out at all5. These environmentally detrimental actions demonstrate how certain branches of a corporation can act against that corporation’s green principles.

‘Greenwashing’ can trick consumers into thinking corporations are more environmentally friendly than they actually are. When a corporation is ‘Greenwashed,’ it spends more money on advertising and marketing its green image than it spends on actual actions for the environment6. A corporation that uses these false tactics is far from benevolent. The fact that there are corporations still running today that participate in ‘Greenwashing’ shows the importance of consumers seeking information about the products they are buying. Costco is difficult to place on the scale of greenwashing, but there are worse perpetrators. At least within Sheri Flies’ lecture, she talked about sustainability more than Costco actually follows through with actions. Benevolent capitalism is hard to perfect in practice, because the size of corporations means that some of the pieces can easily fall through the cracks. Using Costco as an example, it is clear that even a corporation that is mostly benevolent has less desirable practices in some of its branches.

Celeste Venolia, ’17
Celeste is a first year (so as yet undeclared) who hopes to double major in biological sciences and environmental science and policy. A resident of Hubbard and a member of Green team, she loves to dance and choreograph dances.

Works Cited

1 Greenhouse, Steven. “How Costco Became the Anti-Wal-Mart.” The New York Times. N.p., 17 July 2005. Web. 22 Oct. 2013. <http://www.nytimes.com/2005/07/17/business/yourmoney/17costco.html?pagewanted=all&_r=0&gt;.

2 Santoli, Michael. “Tide, Tuna and Fendi: How Costco Heaps Rewards on Shoppers and Investors.” Yahoo! Finance. N.p., 21 Oct. 2013. Web. 27 Oct. 2013. <http://finance.yahoo.com/blogs/michael-santoli/cheap-chickens-pricey-stock-costco-wows-shoppers-investors-212625421.html&gt;.

3 “Costco Charged With Discriminating Against Women Seeking Promotion.” Gender Class Action Against Costco. Lieff Cabraser Heimann & Bernstein, LLP, n.d. Web. 27 Oct. 2013. <http://genderclassactionagainstcostco.com/&gt;.

4 Costco Wholesale. 2012 Annual Report. Issaquah, WA: Costco, 2012. Web. 27 Oct. 2013.

5 Kane, Will. “Costco Settles Hazmat Lawsuit for $3.6 Million.” SFGate. N.p., 5 June 2012. Web. 22 Oct. 2013. <http://www.sfgate.com/news/article/Costco-settles-hazmat-lawsuit-for-3-6-million-3608336.php&gt;.

6 “About Greenwashing.” Greenwashing Index. University of Oregon, n.d. Web. 27 Oct. 2013. <http://www.greenwashingindex.com/about-greenwashing/&gt;.

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