Can We Really Drive Impact Through Markets?

William the Conqueror, great lover of hunting, is credited as establishing England’s forest laws to protect game animals and their habitat from destruction. It was an early example of government establishing laws to protect the natural environment and food systems and avoid the tragedy of the commons, where cumulative impacts of individuals harm the whole community. More than 800 years later a web of global and interconnected supply chains has created a complex array of interactions, where the choice of a consumer in one country can impact the working conditions and natural environment in another.

Can we use markets to draw favorable outcomes for human rights and the environment?

Daniel Katz cofounded and is currently chair of the Rainforest Alliance, which help consumers make responsible purchasing choices. You might have seen their green frog logo on chocolate, tea and coffee packages. He also serves as senior program director at the Overbrook Foundation, which supports organizations advancing human rights and the natural environment.

‘At the Overbrook Foundation we started Catalog Choice to let consumers opt out of catalogs they didn’t want to receive. At first the companies hated me. But we finally got companies to buy in little by little. And then we got a lot of publicity and got up to a million users. What was exciting to me was that we would get letters from people who use the site and say, “Hey, I was getting like 20 or 30 catalogs every month and I signed up for your program and I stopped getting the catalogs and I feel so empowered. What else can I do to help the planet?”

‘There are a lot of people who say the individual doesn’t really matter. And I have always believed that’s crazy. The role of the individual is more important now than ever before in the history of consumerism or activism. Because of how social media works and how the world works. Individuals are influencers.

‘We were running the program strictly on donations. I hired someone to run it. They spun it off. It became its own entity. And we decided to sell the program to a for-profit company, who sold it to another company. We took the money and we gave one hundred per cent to organizations working on like-minded issues.

‘The second company kind of shelved it and we asked for it back and they gave it to us for free. So Catalog Choices is now a nonprofit organization called the Story of Stuff, and there is something like two-and-a half-million registered users.’

Going bananas

Daniel says that when he started working with bananas at the Rainforest Alliance, the people who were first interested were individual family farmers in Costa Rica who saw a competitive advantage in using the program to get certified and be able to put a sticker on their bananas.

‘I happened to be from Cincinnati, Ohio, home of Chiquita Banana’, Daniel says. ‘And I used to play tennis competitively against the family. So I wrote that you may remember me. At first they had no interest whatsoever. And then a kids’ magazine told the story of turtles choking on the blue plastic from bunches of bananas. And thousands of kids wrote to the banana company saying, “Stop killing turtles”.

‘We got another phone call from Chiquita saying come talk to us again. And because of that we were able to start testing with Chiquita, and the CEO went down to Costa Rica about a year later and he saw the changes on the ground. So he got all of Chiquita certified and changed the way the bananas were being grown. But he also went back to their corporate office and said, “We need to do a better job on the sustainability front”.

‘Also, a long time ago we talked to Gibson Guitar. Their CEO was really interested in making guitars from Rainforest Alliance certified wood. And we were able to work with them on that. And we got musicians to play those guitars, and I started putting together concerts with people like Keith Richards. That got a lot of publicity.

‘So more and more people got interested in this concept of certification and where your wood comes from. We needed to make the connection between the consumer and the corporation. And that corporation then had to work with the producer.’

How do you get to the tipping point?

The path to the tipping point can start with an activist CEO, or an employee, or a producer, or with consumers, who now have unprecedented power because of social media and access to information.

‘That is the world in which we’re moving right now’, Daniel says. ‘We want more transparency so that the whole supply chain is there for everyone to see. You cannot hide. Companies know this, from their carbon emissions to their labor practices. They cannot hide anymore.’

The power of voluntary standards

‘Somebody is making money when we certify the coffee bean because there’s a guaranteed market. We’d like to think that the farmer is getting some more money, but we haven’t fixed the problem of coffee farmers not earning enough money to eke out a livelihood. Could government step in? Yes. But the laws aren’t getting us there. And in some countries the companies don’t follow the law. I think that when you eventually get government intervention, you are going to water down the best practices. For example, organic practices in the United States. Before organic became regulated, the practices were much better. But in order to make a big enough tent the law was written to allow a lot of people in and then potentially work their way up. So I think when you get government regulations, you can set a bar. But I don’t think that regulation necessarily will get us to a high enough bar. That being said, sometimes if we had some regulations on a carbon market or taking back waste from the materials that when you buy, if we had regulation on that, it would be very good.

‘The other way to go about doing that is to have a more enlightened consumer. Consumers are not going to end up paying more per product. That’s why you have to find a way to raise the bar to make a certified product, or make a better product for the same price.

‘The world of voluntary certification, I think, is evolving quite a lot. One of the things that we’ve seen is that companies think they maybe can do it themselves. And they cut corners and maybe they get away with it for a while. But it’s hard to do it well. So we have seen a number of companies come back to us. But at the same time, it is incumbent upon every voluntary standard organization and certification organization to make sure that we’re not just checking boxes. We need to be able to show that we are making a positive impact. If we can’t prove it, then why should anyone trust us?

‘I have met and worked with quite a few CEOs who really are steadfast in wanting to turn around their companies and sell a better product and really want to be held accountable. And it’s the citizen and the consumer, more than governments, who are going to hold the corporation accountable.’

But what about government?

Daniel says politicians need to stop thinking short term. We are in a species crisis. We are in a climate crisis. We are in a planetary crisis.

‘One of the reasons that I was interested in trying to influence corporations was that I believe that corporations influence governments. A large corporation is more likely to quickly get a government to change some behavior than a handful of citizens. But a handful of citizens are more likely to change the behavior of a company, and a company is more apt to quickly evolve. So that is the pathway. We do this all in service of those who grow the products that we use every day. And we do this in service of the plants and animals that have a right to exist on this planet for their own sake. We do this in service of wanting to live on a planet that is just and equitable and healthy.’

For more about Daniel you can head to the Rainforest Alliance and the Overbrook Foundation websites.

You can follow Dan on Twitter under katmandan.

If you want to further explore strategic planning both for government and NGOs, you might like the podcast and article with Kelly O’Shanassy (CEO of ACF) on ‘Building strategy in complex organisations‘ or with Stan Krpan (CEO Solar Victoria) on ‘Strategic Planning in a Reactive World: Is strategy still important for Government.’