ECN Summer 2017

Here are your top 13 ethical consumption stories for the summer: (1) the “pipeline bank” divestment movement now includes cities and nonprofits; (2) a new study shows that there is appetite for eco-labels amongst Taiwanese farmers; (3) research offers new perspectives on whether “eating ethical” is ethical; (4) university fossil fuel divestment has reached $130 billion globally; (5) the state of NY is under pressure to divest from fossil fuels; (6) CEOs left two Trump administration business advisory committees en masse; (7) an Ipsos poll has found that 25% of Americans boycott; (8) Canadians boycotted Sears over labor concerns; (9) the EU has updated its textiles eco-label; (10) Congress has introduced a bill seeking to ban the Boycott Divest Sanction movement; (11) the Marine Stewardship Council eco-label has gotten itself into a reel controversy as it looks to approve certification for a Mexican tuna fishery; (12) herbicides were found in Ben & Jerry's ice cream; and (13) there is a new non-denominational effort to create a Green Church label.

1. The City of Berkeley and 15 NPOs divest from “pipeline banks”

Berkeley City Council has voted to divest from Wells Fargo, beginning in May 2018, and to implement responsible banking policies. Berkeley follows a handful of other US cities that have divested from the bank for its financing of private prisons and the Dakota Access Pipeline. Fifteen nonprofit organizations have also pledged divestment in light of the US pullout; they pledged to divest from “pipeline banks”.

2. Research: farmers would reduce chemical use for eco-labels

A study by researchers at the Technical University of Munich found that Taiwanese rice farmers would be willing to reduce their use of chemical fertilizers, which would reduce revenue by shrinking crop yields, if they could obtain an eco-label by doing so. This study contributes to a growing area of research on whether consumer labels are an effective way to shape producer behavior.

3. Debate: is “ethical eating” ethical?

Researchers at the University of Guelph recently published an article arguing that ‘ethical’ food is often only available to the affluent. I covered this topic in a dedicated blog post (here). This follows a similar study by researchers at UBC, who found that organic food is not always healthier or more sustainable.

A study by researchers at the UN Food and Agriculture Organization has pointed to the inadequacy of present tools to fight overfishing. They argue that the fisheries crisis has been “exported” to the developing world and argue for a global scale effort that eliminates the disparity between developed and developing countries.

4. Good news and bad news for fossil fuel campus divestment

After months of discussion, Yale University’s responsible investments committee has decided not to recommend divesting from Exxon Mobil. Harvard, on the other hand, announced in April that it will “pause” its investments in some fossil fuel companies. In any given ECN cycle any number of universities have ongoing fossil fuel divestment activities. Generally I stick to the larger and more well-known universities, but it is important to note that this barely scratches the surface of a dynamic activist sphere. Fossil fuel divestment by the world’s universities has now reached 80 billion GBP, or 130 billion CAD.

5. Pressure on NY State pension fund to divest from fossil fuels

Following the US’ decision to leave the Paris Agreement, pressure has intensified for the state of New York to divest its Common Retirement Fund from fossil fuels. More than 200 elected officials from across the state have asked the State Comptroller DiNapoli to divest in a letter that was released at a rally in June. The pension fund, which manages $192 billion, is believed to have $5 billion invested in fossil fuel companies. DiNapoli reacted by arguing that it is better to influence companies by enacting pressure as a shareholder: “We believe in engagement with companies […] we have been moving more of our money into companies that are working to reduce greenhouse gas emissions.” This discussion reflects a cleavage in the ethical investment sphere, between divestment and shareholder activism.

California’s public employee pension fund CalPERS is fulfilling its directive to divest from coal, but as coal stocks rise this has become a costly move. For its own part, the board of San Francisco’s public pension fund is divided on fossil fuel divestment.

In a similar move, New Zealand’s Superannuation Fund (NZ Super Fund), a sovereign wealth fund worth $26 billion USD, has withdrawn from 300 fossil fuel companies because they are “risky investments”.

6. CEOs ditch Trump

Beginning with Merck CEO Ken Frazier, this week prominent American CEOs left the Manufacturing Jobs Initiative and Strategic and Policy Forum, two advisory groups set up by the Trump administration, in reaction to the President’s comments on events in Charlottesville, VA. Both councils have been disbanded as a result. Given how unusual it is for CEOs to publicly take political stances of this sort, these events are generating discussion about how the Trump Presidency is changing the calculus of businesses.

7. Data: 25% of Americans boycott

Relevant to the issue above, new data suggests that in this hyper-partisan environment businesses may not be able to avoid controversy by simply “keeping their heads down”. According to the results of an Ipsos survey, 25% of Americans have stopped using products or services from a company for political reasons. Ipsos also found that Google searches for the term boycott have spiked in 2017. Democrats are more likely to have boycotted Uber, Under Armor, Exxon, and Walmart, while Republicans boycotted Nordstrom, Macy’s, TJ Maxx, and PepsiCo more frequently. Ipsos recommends that companies: understand their brand’s risk profile; understand their customers; track social media; and prepare a communications plan for responding to a political crisis.

8. Sears boycott

In late July Canadians took to the Internet to #boycottSears following news that the company plans to lay off around 2 900 employees without severance pay. In response to the boycotts, Sears this week announced a $500 000 “hardship fund” for laid-off employees, to be channeled out of executive pay.

9. EU updates textiles label

The EU Ecolabel for Textiles, a voluntary standard managed by the European Commission, has been updated. The EC has widened its definition of textiles and clarified its requirements on recycling and chemical management.

10. US bill proposes to ban BDS

Congress is considering an Israel Anti-Boycott Act, which would expand the Export Administration Act of 1979 in order to bar US persons from boycotting Israel and Israeli businesses, in effect banning the BDS movement. As has been covered by Pullback before (see here and here), it is worth noting that this is not the first proposed law targeting BDS. In fact, North Carolina has very recently passed such a law. And Israel has banned non-citizens that support BDS from entering the country. Like the other anti-BDS laws, the Israel Anti-Boycott Act would have significant implications for free speech, if passed. More generally, these laws prompt a question about whether and under which circumstances boycotts are a legitimate form of political opposition.

11. Controversy: MSC close to approving Mexican tuna fishery

Controversy has erupted as the world’s most reputable wild catch fish sustainability label, the Marine Stewardship Council (MSC), moves closer to certifying the Mexican eastern Pacific skipjack and yellowfin tuna fishery. The World Wildlife Fund, which played a central role in creating MSC, had raised concerns about the impacts of the fishery on dolphins in the area. It has criticized MSC for these latest steps, as has the Earth Island Institute, the Humane Society International, and other conservationists.

12. Herbicides in Ben & Jerry’s

Trace amounts of an herbicide called glyphosate were found in 10 of 11 samples of Ben & Jerry’s ice cream that were tested by the Organic Consumers Association. While the amount of glyphosate was far below the EPA limit, the finding has damaged Ben & Jerry’s image as an environmentally-friendly brand.

13. Green Churches?

As I have previously explained (here), faith organizations are often at the forefront of fossil fuel divestment efforts. A new project is underway to create an eco-label for churches that have undergone an “ecological conversion”. The Green Church label will allow for Christian churches of different denominations to identify themselves as eco-churches.