Joel Makower is a widely respected writer and consultant on issues of sustainable business, clean technology and green markets. His essays on environmental business and technology are a regular feature of our Sustainability Sundays. Take it away, Joel:
If you believe the opinion polls and market surveys, a significant majority of U.S. consumers are looking to align their consciences with their pocketbooks. Just this past week, a survey commissioned by the Center for a New American Dream found 91% of college students and 88% of their parents saying they would be likely to purchase environmentally friendly products if they were available at stores they shopped at. And: nearly all (93%) of the students agreed that American consumers can conserve resources, protect workers, and build a better world by shopping carefully for environmental and fair trade products. (Download the survey highlights here in PDF.)
And then theres the annual survey of LOHAS (lifestyles of health and sustainability) consumers -- a segment of the U.S. population for whom health, society, values-driven beliefs, and the environment are extremely important -- the 2005 edition of which found that 89% of consumers care about social issues such as protecting workers' rights, and 95% care about protecting the environment.
Of course, translating that passion into purchases is far more complex. Determining which companies are truly socially responsible involves doing a relatively deep dive into company policies, practices, and performance. Suffice to say, few are going to bother, even if companies actually released such information in some user-friendly manner. Take my word: They don't.
And to date, theres been no reliable one-stop source of information on socially responsible companies -- in particular, the type of larger, mainstream companies we find in our local supermarkets and big-box stores. No eco-labeling program has ever gotten traction in the U.S. (Although there are -- would you believe? -- no fewer than 137 U.S. eco-labels out there, and that doesnt include non-environmental labels, such as sweatshop-free.) Among the cacophony of labels that do exist, some lack credible definitions and standards and a few are out-and-out greenwash.
Thats why Im cautiously optimistic about Alonovo, an online information and shopping service that launches on Monday, August 22. In a nutshell: Alonovo has married socially responsible business ratings from a respected investment advisory firm with the products sold on Amazon.com, allowing you to view the full Amazon universe -- books, music, cameras, toys, jewelry, electronics, and all the rest -- through a socially responsible lens.
At least, thats the promise.
Essentially what weve done is taken the catalog of Amazon products and through our portal providing directly into the consumer experience the socially responsible ratings of manufacturers and merchants, explains Alonovo founder George A. Polisner, who left a long career at Oracle to start the company. Polisner and his team have partnered with KLD Research & Analytics, a pioneering, well-respected socially responsible investing research firm, whose databases of company social performance are widely used by pension funds and other institutional investors.
The Alonovo site will be a portal into Amazon.com. When you view a product, youll see all the usual information -- price, product description, and reviews -- as well as the social responsibility rating of the company that makes it. The default rating will be a balanced score based on a companys:
If youre so inclined you can customize the ratings you see, dialing the weighting of certain categories up or down. For example, if environmental responsibility is a principal concern, you can give that greater emphasis than the other factors.
Alonovo will receive a monetary ka-ching for every purchase made through its site, though prices wont be any different from those on Amazon. Users also can designate that a portion of Alonovos fee go to benefit any of several affiliated nonprofits, from Oxfam to Global Exchange to the Center for Civic Participation.
Alonovo faces some competition, both now and in the future. Already, theres Idealswork, which offers a similar change-the-world-with-your-purchases mantra. Like Alonovo, Idealswork allows you to choose the social criteria that concern you -- from environmental and workplace concerns to animal rights and gay/lesbian issues. But Idealswork rates companies and brands, not products. You still need to map those ratings to the specific products you are considering, then go to some other Web site (or, perhaps, to an actual store) to make the purchases.
And then theres the fledgling Sustainable Business Rating System, the LEED-like rating system that a team Im involved with is developing. It will provide leading-edge businesses with a sustainability certification, but not for a while.
Alonovo, to its credit, makes things simple: Ratings, mapped to products, and the ability to make online purchases. All in one place.
Simpler is good when it comes to helping consumers vote with their wallets. Even most true-green environmentalists -- you know who you are -- have shown little zeal for making much of an effort to find greener products. Hey -- were all busy folks!
I do have some concerns about Alonovo. The site will, for the time being, lack any type of community feedback mechanism, a la Amazons customer reviews, that would enable individuals to comment on the ratings or the companies. Such feedback mechanisms seem mandatory in this day and age, especially in the area of corporate social responsibility, where some companies performance are overrated (BP, for example) while others are underrated (Nike, for example), and even the progressive community cant agree on which are the truly good companies. For now, any user feedback will go only to Alonovo. Polisner says that subsequent versions of the site may include the ability to provide structured feedback.
But Im more than willing to give Alonovo a chance. If it catches on, it could be one of the most powerful social change tools ever put into consumers hands. As Polisner puts it: Its one thing to stand outside of a business and say 'We want to you to do this or that.' But it creates a powerful statement when we can directly influence debits and credits and revenue streams based on a companys embodiment of socially responsible principles.
Amen to that.
I am really impressed. A long career from Oracle should provide the Alonovo founder of the necessary experience to deal large amounts of data... but still, I wonder how it will be possible.
Following specific experiences, as Ethical Consumer in England or The Guide to an Ethical Consumerism in Italy, I have some feeling that:
1) An ethical rating requires a huge amount of research, and the data coming from one social investment rating agency can hardly be considered enough
2) What about the smaller companies for whom is much more difficult getting information?
3) What about the accountability of Alonovo? Even if they simply merge the rating data with Amazon, their power can become quite dangerous.
I read with interest the promising homepage of their website and yes, I cross my fingers. Please, keep us informed.
Good for them for figuring out a way to make money pointing people in better directions.
It's still feels a bit contrived... e.g. I'm not sure why I should care about the category "Affordable Housing". Not that it's a bad thing- I just don't understand how a company having a policy in that area can be very useful. Maybe example of what they're looking for would help (I especially wouldn't like to see example of modern paternalism linked with housing... not worldchanging at all).
While the category approach probably works well for ethical fund investment, it seems like overkill for consumer decisions. I wonder if a peer reputation system might have a better chance?
There's going to be some usability issues to work out and I wish them the best of luck.
"I'm not sure why I should care about the category "Affordable Housing". Not that it's a bad thing- I just don't understand how a company having a policy in that area can be very useful."
Daniel, it would really depend on the industry in question, as well as the consumer in mind. A company that specializes in construction and development would be a good example of one that should have a policy on affordable housing. Perhaps a shoe retailed should not. However, there are questions about origin country (and the like) where that may come into place, too.
For me, the question is less about what policies must be in place for a company to be "socially responsible," but about the fact that they're having the debate at all.
I see two problems:
1) Why do you have to make money to save the environment?
2) Reusing is far better than buying sustainable goods. I would say that in the current state of affairs, that sustainable is not good enough, because we have to fix things, not just keep them the same. Reuse.
Dear Worldchanging Community,
I was thrilled that Joel took the time to talk with us and cover us. There are many great points in the above.
We are hoping to accomplish multiple things. One is to redirect what is already (and will continue to be) vast consumer spend. We want to help people direct it (and thus, the transfer of power that accompanies a purchase transaction) in an informed manner. When people spend now, it is largely indiscriminate spend (unless influenced by a boycott, or other very visible and simple information method).
By informing, and redirecting power to companies that are evolving in a positive direction, we can accelerate a badly needed 'Race to the Top'. Furthermore, beyond informing the marketplace (and thus creating marketforce demand intelligence) we will be providing articles and content to help people understand (in a compelling and simple way) what Corporate Social Responsibility is, and how we influence it.
We believe this will have a gradual impact on the socio-economic, environmental and political landscape in the U.S. -and the rest of the world.
Knowing that this is gradual, we seek to address what Dr. Martin Luther King Jr. described as "the urgency of now." Thus, 20% of our revenue is shared to beneficiary organizations selected by each individual user of alonovo.com, for their purchases.
The reason we must make money is two-fold. One, without the ability to sustain our infrastructure, development and a very comprehensive roadmap of features and functions to amass a vast, apolitical demographic we become marginalized or simply G.I.R.K. (good-idea road kill). We gave a great deal of thought to being a 501(c)3 non-profit -but decided we do not want to compete for funding with the community we are seeking to serve -great organizations with amazing people like Global Exchange, United for a Fair Economy, the Center for Civic Participation and many other organizations I personally hold in high-regard for their everyday heroism and impact on people's lives.
So, we do not wish to encourage greater consumption, we acknowledge what is already in front of us, and wish to shape it and direct it in an informed manner. Certainly we may find opportunities to educate people along the way about the impact of consumption run amok -and perhaps we black the site out with an educational message on Buy Nothing Day.
Anyway, thanks for a great thread, for listening and the inspiration of Joel and this great community.
George A. Polisner