In an article featured by Wharton, the “one for one” business model is explored and analyzed, leading to the claim that they sometimes cause unintended negative consequences. A big chunk of the article is spent discussing this phenomenon with the example of Toms.

Toms’ company relies on the one to one business model by giving a free pair of shoes away to children in need for every pair bought. One of the conclusions of the article is that by doing this, they harm local shoemakers and cause dependence on their free shoes. Another shoe company, SoleRebels, takes a different approach to this. They manufacture shoes in Ethiopia and treat their employees exceptionally well. Employees at SoleRebels receive 3 times the industry average wage, full medical plans, and transportation to and from work. SoleRebels is also very sustainable and environmentally friendly.

I’m aware Toms has only the best intentions with their one for one model and are working on improvements, but I believe SoleRebels is winning on the social enterprise factor. They are genuinely helping give their Ethiopian employees a better, and more prosperous life. However, both of these companies are very sustainable and have created excellent shared value.

In a recent investigation by CBC, they reported several incidences of Tim Hortons and Starbucks failing to keep their promise of sustainable and eco-friendly practices. This includes: throwing paper cups in garbage instead of recycling, disguising a trash bag as three separate recycling bins, throwing coffee grounds in the garbage instead of composting them, and still using a paper cup when people bring in their own mugs. Both Tim Hortons and Starbucks both use their sustainable practices in Canada as good public relations, but now we are finding out that it is all a lie.

What these two companies are doing is wrong on many levels. They are not only doing quite the opposite of creating social responsibility, but they are lying and pretending that they are, which is very unethical. This will no doubt upset many customers, and discourage them and many  more potential customers from buying either of their products for a long time. Also, I would not be surprised to see a drop in their stock after this announcement by CBC.

It might be time for both of these companies to look at the trend in business right now and to follow suit. For example, there has been a big push in sustainability and environmentally friendly practices as of late. If these two companies want to remain strong competitors in the Canadian market, it is crucial they attend to these matters very soon, and regain the trust of their environmentally aware customers.

Recently in the Harvard Business Review blog, Andrew Winston wrote an interesting article about a strong shift in the clean label movement. Consumers are growing increasingly uneasy with buying products from companies that don’t disclose much information regarding their products and sustainability efforts, or lack thereof. They are willing to pay more for clean label products, or products that have simplified their ingredient list. Winston argues that this shift in consumer preference comes from Millennials, due to their demand to work for companies with good behaviour and practices. He then presents a list of tough questions for companies:

Winston uses these questions as a guiding point for companies to judge how their company is perceived by the public. He concludes his article by stating that neglecting the clean label movement will cost companies customers, and employees.

A couple of years ago, it seemed that finding a company with good sustainability practices was rare; however, that is certainly not the case today, or in the future. I believe this is, and will continue to be, a domino effect. Many companies look at sustainability and see it as increased costs, and refuse to take part in order to remain competitive within the industry. But, when one or two companies start doing it and remain successful, a couple more follow, and the trend continues until its industry wide. I hope that in a couple years, the cost for using sustainable practices will become similar to a fixed cost for companies, and they will all be on level playing field.