The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Wednesday, January 30, 2013

Strategic CSR - Conspicuous Virtue

The article in the first url below ties together a few ideas that I have been playing around with for a while now. The first is the primary focus of the article—the concept that unforeseen consequences often undermine the good intentions behind an innovation (see: Strategic CSR – The Jevons Paradox). In this case, the article claims that re-usable shopping bags might be more of a health hazard than an environmental benefit:

“Recent years have seen a raft of bans put in place on plastic bags—Los Angeles and San Francisco both have them, as does China. In their paper, University of Pennsylvania economist Jonathan Klick and the lawyer Joshua Wright decided to look at emergency room admissions for illnesses related to food-borne bacteria before and after San Francisco County imposed its ban in 2007. They found that the problem had increased by more than one fourth, and that deaths had risen by the same amount.”

The cause of the problem is that the bags are re-used and, therefore not sterile/clean, in the way that new plastic or paper bags are clean:

“The issue, it seems, is that the vast majority of shoppers who re-use bags never clean them. … Most people also don’t pay close attention to whether they’re using a bag to carry mesclun greens and apples that they used a week earlier to tote chicken breasts or other raw meat—or for that matter, a dog leash and their soccer cleats.”

The second idea is only briefly referenced at the end of the article—the concept of conspicuous virtue:

“The inconvenience of reusable grocery bags is what give them their power as symbols of green virtue, along with reusable water bottles and hybrid cars.”

The author introduces this point to suggest that re-usable bags will lose their status once their health effects are broadly understood. I find this idea that perception (rather than functional value) drives the consumption of specific goods fascinating. I also suspect it is more widespread throughout the CSR/LOHAS/sustainability community than many of us are willing to admit.

I used to think something similar when I lived in Austin, TX. Shopping at the main Whole Foods store there (Whole Foods’ HQ is in Austin and the store beneath the HQ is the firm’s show store where the firm tries out new innovations before rolling them out firm-wide). Watching a lot of shoppers there, it was hard not to conclude that the value of being seen shopping in Whole Foods was almost as high to consumers as the value of the products they were buying.

This idea also has parallels with what economists call a Veblen good—“a product that is valued and desirable simply for being more expensive.” The 2007 article in the second url below applies this idea to help explain the consumption of CSR goods. The author illustrates his point initially in terms of the Livestrong yellow armband craze that had been sweeping the nation/world at the time:

“More than 60 million have sold since 2004, one of the greatest successes in nonprofit fund-raising history, with the proceeds going to cancer-related causes. No doubt some wear the bands in solidarity, or for inspiration -- but, that said, the wristband conceit was simply ingenious. It allowed people to make a show of their virtue. They could give to a good cause, and they could advertise their caring to everyone else.”

The idea of a Veblen good was introduced by Thorstein Veblen in 1899 in a sociological paper titled ‘Theory of the Leisure Class,’ which introduced the idea of conspicuous consumption. The author in the second article twists this concept to highlight the idea of what he calls conspicuous virtue:

“Conspicuous consumption stays with us today. But increasingly, it seems to me, many consumers are not seeking an outright demonstration of wealth. Instead, they consume to demonstrate their innate goodness. They spend not to suggest the deepness of their pockets but the deepness of their hearts. We inhabit, to update Veblen, an age of conspicuous virtue.”

Conspicuous virtue arises when consumers purchase “virtuous goods,” in part, to demonstrate their individual virtuousness, rather than for the instrumental value of the goods themselves:

“They are virtuous goods. To consume a virtuous good is to make a statement. It is not only to do right, whatever that might mean, but to announce that you are doing so.”

And, finally, I also see parallels with the idea that the level of visibility of something largely determines our reaction to it, and that this phenomenon also has an important application to the debate around sustainability. This was most forcibly brought how during the Deepwater Horizon oil spill, which obviously caused a strong negative reaction, when there is a much more serious and long-lasting form of pollution in the Gulf of Mexico that is routinely ignored. It is caused by the phosphate/nitrogen run-off from fertilizers used in farms all along the Mississippi river. The excess runs off into the river and flows into the Gulf, causing a “dead zone” that is much bigger than the Deepwater Horizon oil spill ever was, but, because we cannot see it, does not cause large complaints. Similarly, we cannot see the build-up of carbon-dioxide (and many other pollutants) in the atmosphere, which I think partially explains, why more people are not more concerned about the problem.

These ideas of visibility and conspicuous consumption driving behavior are interesting, I think, and seem to be equally applicable in relation to CSR issues as elsewhere.

Take care
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Paper or Plastic (or Deadly Food-Borne Pathogens)?

Drake Bennett
January 15, 2013
Bloomberg Businessweek

Conspicuous Virtue and the Sustainable Sofa
By Joseph Rago
March 23, 2007
The Wall Street Journal
Late Edition – Final
W13