What is business and corporate accountability?

coffee shop
Image Courtesy Ian Baldwin

Business and corporate accountability means taking responsibility for the actions taken and the results caused in the process of doing business. As operations become more complex, corporate accountability extends beyond company walls to cover the entire supply chain—factories, suppliers, distributors, and and so on.

In this ethical buying guide, we’ve discussed many different abuses, such as environmental issues, animal and human rights, and the treatment of workers. Companies can cause harm either by committing an abuse directly or by complying with an abuse it could otherwise prevent or influence.

Sure, there are a number of laws to discourage and punish some of these abusive behaviors. However, government protection falls short in several ways. First, there’s no global body to govern companies, and some countries have weaker, less comprehensive laws for protection. Second, laws have loopholes that let offenses slip through the cracks. Third, some issues are still not protected by law. Lastly, sometimes government corruption can influence if an offense is punished or not.

The bottom line is we can’t rely entirely on the law to hold companies accountable. We have to do it until governments catch up.

The Biggest Issue & Why It’s Important

1. Boycotting Products, Services & Entire Companies

Image Courtesy Samantha Sophia

A boycott is a type of consumer activism where you refuse to use or buy a certain product or service or to deal with a specific company. It’s used to draw attention to unethical offenses committed by a firm and create corporate accountability. It can be initiated by an individual, community, organisation, activist group, the media, or customers, but it generally requires a lot of participation and attention to have any significant effect.

The most telling part of a boycott is how a company decides to resolve the conflict. It can vary. From out right denial and defensiveness to acknowledging the mistake and making change a priority, a company can fall anywhere in between. You can imagine which response is better for the brand.

Why It’s Important

A boycott can be a way of creating corporate accountability when current laws and regulations disappoint. Protesters want to cause enough damage—lost sales, damaged brand, bad publicity—so that the company changes its ways. In many cases, the monetary loss alone is enough to push brands to take action. In 2009, Fruit of the Loom reportedly lost $50 million in a US-wide campaign led by United Students Against Sweatshops against its treatment of workers in Honduras. Did they take positive action? You bet.

Here are some other examples of successful boycotts and the corporate accountability they brought about:

  • In 2016, Seaworld announced its intention to end all Orca breeding programs and phase out Orca whale shows in all parks after serious pressure from animal activist groups.
  • In 2012, baby brand Johnson & Johnson removed all formaldehyde-releasing preservatives from its products after a boycott over the use of harmful chemicals in its baby shampoo.
  • In 2010, Nestle put together a zero deforestation policy in its palm oil supply chain after intense campaigning by Greenpeace.

As a side effect, a successful boycott discourages other companies’ unethical behavior and, hopefully, encourages better corporate accountability policies. At the national and international level, it draws attention to these offenses and sheds light on gaps in existing laws.

Take Action: How to Support Accountable Companies When You Shop

Image Courtesy Jean Lakosnyk

We want companies to take responsibility for unethical behavior. We bet you do too!

Luckily, there are a number of organisations out there dedicating their time and effort to make sure we’re informed. Here are some ways you can keep an eye on your favorite products, services, and companies:

  • Does the company have any active boycotts? Ethical Consumer maintains a comprehensive and updated list of active boycotts. You can also do a quick search, type “company name” + “boycott” into your favorite search engine.
  • Does the company have any outstanding ethical concerns? Again, turn to your favorite media site or search engine and look for ethics-related stories.
  • Subscribe to newsletters for activists groups, like PETA or Greenpeace, or ethical shopping magazines, like Ethical Consumer.
  • Shop with places like Peachy who evaluate accountability for you.
  • Join an existing boycott or start one yourself.