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Doing Well By Doing Good: The Innovators

The American public is increasingly eager to buy products and services from companies that don't pillage the environment or abuse their employees.

As oil continues to pour into the Gulf of Mexico, BP (BP) - Get BP p.l.c. Report has become the company everybody loves to hate. Though BP has pledged billions of dollars toward the clean up effort and appears willing to pay all "legitimate" claims (whatever that means), the company has become the latest poster child for the damage short-sighted corporate greed can inflict on the public welfare.

Interestingly, some companies have found that the Gulf spill offers an invaluable opportunity to enhance their public image by helping clean up BP's mess. The Hooters Girls recently announced that they would donate their torn pantyhose to the clean-up effort. (Yes, it's funny at first, but those signature shiny hose will mop up as much as one million gallons of oil instead of piling up in landfills.) Not to be outdone, Hanesbrands has donated 50,000 pairs of pantyhose to non-profits Matter of Trust and Florida's Sunshine and Shores Foundation for the same purpose. It's not all about nylons. Bounce Energy, a Texas electric company, has agreed to donate to the National Wildlife Federation for every customer that signs up for its green energy plans.

But the biggest corporate star in the oil clean-up effort is undoubtedly

Procter & Gamble

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, whose Dawn dishwashing liquid has proven remarkably effective in removing oily sludge from pelicans, sea turtles and other afflicted wildlife. Ironically, Dawn contains a little petroleum, so while it's not completely biodegradable it is the most effective solvent to get oil out of feathers and fur. P&G has donated thousands of bottles of Dawn to the wildlife clean-up effort, and retailers like CVS and Walgreens have cut the price of Dawn in the Gulf region in hopes that local residents will donate still more. Consumers outside the Gulf can also contribute by buying Dawn and entering an activation code at a special website,; each entry triggers a $1 donation to the Marine Mammal and International Bird Rescue Research Centers.

Some commentators see P&G's recent commercial touting Dawn's role in the battle to save Gulf wildlife as self-serving. Consumers, however, don't agree. In a recent

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poll, only 25% of respondents said it was "tacky to use the oil spill for gain," while almost 40% said that they would "definitely purchase Dawn." Not only has P&G done some good in the Gulf, it's also seemingly boosted its sales along the way.

So if good citizenship is so good for business, why don't more corporations embrace it? Management may fear that shareholders will sue if they don't see how a corporation's contribution to the public welfare increases profit margins. So, for example, Ben & Jerry's founders Ben Cohen and Jerry Greenfield sold their company to Unilever ten years ago despite worries that the company's social goals would suffer because their attorneys warned that the shareholders' financial interests had to come first. Even if management wants to put principles ahead of pure profit, they've faced serious legal risks ... until now.

Maryland recently became the first state to approve the creation of the "benefit corporation," a hybrid that balances for-profit corporations' ability to raise significant amounts of capital and not-for-profit entities' philanthropic focus. So-called B Corps must adopt charters setting forth their values, annually report on their socially responsible activities, and accept an outside audit of their success in serving the public interest. In exchange, B Corps receive heightened protection from shareholder lawsuits. Vermont recently adopted its own B Corps statute and several other states, including California, are contemplating similar provisions for adoption in 2011.

Some commentators worry that, while working to serve the public good, B corporations may not take adequate care of their shareholders' financial interests. Others worry that B corporations may have trouble attracting investors if they don't return the maximum lawful profit each quarter. Still, the B Corps model is attractive to entrepreneurs who want to balance the pursuit of short-term profits with appropriate consideration for the greater long-term good, and there may be more of them than one might expect. According to, there are already more than 300 companies that have chosen to become B Corps; together, they manage $1.1 billion in revenues throughout fifty-four industries.

Ultimately, the choice to become a B Corps may be a profitable one. If BP had been a B Corps, it would have had to balance its profit targets against its obligation to protect the safety of its workers and the environment in which it drilled. BP might have decided to spend additional money on acoustic switches that could have prevented the massive spill in the Gulf. Experts state that the switches cost about $500,000 apiece -- taking a longer-term, more public spirited approach might have saved BP billions in clean-up costs.

Consumers may also be happier to buy from B Corps. The American public is increasingly eager to buy products and services from companies that don't pillage the environment or abuse their employees. With so many businesses claiming to be "environmentally sensitive," however, it can be difficult for consumers to know which claims are valid and which are just, well, greenwashing. The B Corps model offers criteria to measure how well corporations act on their social consciences, making it more difficult for clever public relations departments to mislead well-intended customers.

One company that demonstrates the value of the B Corps model is B Corps member

Seventh Generation

, maker of environmentally-friendly household products. The company went private in 2000 in part so that environmental values could be written into its corporate charter without incurring the wrath of greedy shareholders. While it's not as big as P&G, Seventh Generation is a $150 million dollar company. Its success suggests that the B Corps model may be an excellent way to serve the greater good and still make a reasonable profit. Here's hoping that Seventh Generation can also, eventually, formulate a dishwashing liquid that removes spilled oil from threatened wildlife. Until the petroleum companies become B Corps, we're probably going to need it.

Lauren Bloom is a Washington, D.C. attorney and the CEO of Elegant Solutions Consulting, a consulting firm dedicated to helping professionals, business and association management executives build trust with their clients, customers and members by "walking the ethics talk" in their daily practices. She is the author of the "The Art of the Apology -- How to Apologize Effectively to Practically Anyone."