What ability do major corporations have to lead the way and effect positive social change in a world ridden with externalities (environmental and otherwise)?
According to corporate leaders who spoke at UVA's Darden Business School on Tuesday, Feb. 1, for Net Impact's annual "People + Planet = Profit" conference
, profit is the key element in the equation. When looking at the major business environmental success stories such as Wal-Mart or Interface, it appears that aggressive shifts in practice and policies that first limit environmental harm and don't originally create profit can add tremendous value. However, John C. Reid, Coca-Cola's Vice President of Corporate Social Responsibility, delivered a different perspective. One student asked, "Do you have the ability to effect change that doesn't make the company money in the long-run?" Mr. Reid disclosed, "I'm gonna answer no ... consumers are kings. 99 percent of the time we listen to our consumers and suppliers." Mr. Reid, a self-proclaimed capitalist, essentially asserted that the Coca-Cola only has a responsibility to change if it makes them money.
CEO, Chairman and President of Dominion Power Tom Farrell spoke earlier in the day argued that environmental problems were too big to tackle and current proposed solutions inadequate. His remarks were later characterized as "depressing," "realistic" and "a downer."
Are many major companies actually unable or just unwilling to create positive change? Are the stakeholders that they a responsible to just the economic ones, or do broader environmental and community stakeholders matter, as well? To the students in the audience who had been taught the latter, the conference brought some harsh realism into a possibly idealistic academic setting.
The two main take-aways from the conference were that consumers have a lot of power to effect change in their spending habits, and that Dominion and Coca-Cola will most likely have a hard time recruiting college students to work for them.