When a company is “starring” on TriplePundit every couple of weeks it’s usually an indication that either a lot of CSR activity is going on there or that the company has a chronic CSR problem. In the case of Apple it seems unfortunately to be the latter. Last week in a very interesting article on HBR Blog, Prof. Gregory Unruh of Harvard offered the explanation that Apple has a reactive CSR strategy, which he described as the "Little Dutch Boy" Strategy. In other words, Apple bothers to act only when there’s a complaint or protest against the company, hoping like the little Dutch boy that poking its fingers in the holes in a dyke will stem the flow and let the company go back to concentrate on designing and selling great products.
While Prof. Unruh is certainly right about Apple’s reactive strategy, I believe the CSR problems of Apple go beyond its reactive strategy. Looking at the main issues Apple has been struggling with in the last couple of years, I identified 5 main problems that cause Apple to fail time and again when it comes to CSR:
1. Lack of stakeholder engagement strategy – Apple simply doesn’t believe it needs to engage stakeholders, not to mention having an engagement strategy. We can see it every time, from not sharing information with Greenpeace about why Greenpeace got it wrong about the power consumption of Apple’s North Carolina data center to not responding at first to Chinese environmental groups investigating pollution issues in Apple’s supply chain in China. Another example is Apple’s tendency to reply to questions from the media about working conditions issues in its supply chain with a generic reply, such as: “Apple is committed to driving the highest standards of social responsibility throughout our supply base.“
These examples show that Apple is very reluctant to engage with any stakeholder that has a critical point of view of the company. The thing is that in all of these cases Apple had to change course eventually, revealing to everyone the information it didn’t want to share with Greenpeace in the first place, talking with the Chinese organizations and even providing more meaningful information to the media. If Apple will establish a strategic way to engage with stakeholders, just like Gap did successfully couple of years ago, it can save itself a lot of trouble.
2. Lack of triple bottom line thinking – Apple hasn’t really adopted the triple bottom line. For Apple it has usually been about maximizing its profits and addressing environmental and social issues as long as they didn’t make a significant impact on Apple’s income. Now, even when Apple claims to promote one of the other elements of the triple bottom line, like people for example, its practices show that it’s still really about the profits.
Take its supply chain – while Apple has a very progressive code of conduct, it also, as the New York Times reported, allows suppliers only the slimmest of profits, which often results in suppliers trying to cut corners, replacing expensive chemicals with less costly alternatives, or pushing their employees to work faster and longer. As Apple could see in the case of Foxconn, this approach can work for some time, but not for the long run. If Apple will start thinking about people and the planet as seriously as it thinks about profits, it might even find out that in the long run there’s no contradiction between these elements.
3. No CSR leadership or team – Unless you’re a company with a CEO devoted to CSR or an established CSR culture, you can’t really do CSR right without a dedicated CSR team. As Andrew Winston put it: “You need people to ride herd and drive the agenda — to do the cross-cutting analyses such as lifecycle assessments, to track and get a handle on the many diverse and complex issues, to present a unified front to employees and external stakeholders, to question business models and find new, heretical ways to operate and serve customers...the list goes on.”
4. Low level of transparency – While it is providing more information than many of its competitors (Amazon for example), Apple’s transparency is still far from being satisfactory. The company does not release a sustainability report, does not reply to the CDP surveys and, until recently, it also didn’t disclose the name of its suppliers or allow a third party to audit the working conditions in its supply chain. It’s time for Apple to stop being so hush-hush and start being more open about the way it does business.
5. Dated approach - Apple still doesn’t have a holistic approach when it comes to sustainability. You can easily see it on its website where there’s a separate page for environment, dedicated mainly to its footprint and a separate page for supplier responsibility, which is focusing on Apple’s supply chain. The division between social and environmental impacts is really out of date and even oil companies like Chevron now have a CSR page. All Apple has to do is to address its CSR approach just like an iPhone or iPad and remember to update it on regular basis.
Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is an adjunct faculty at the University of Delaware’s Department of Business Administration, CUNY and the New School, teaching courses in green business and new product development.
Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.