Trends-November 2009

The green movement is many things to different parties. But the common element all environmentally conscious supply chain practitioners and consumers should take a vested interest in is transparency—from source to self.

Environmental watchdog Greenpeace, whose mission is to bring clarity to environmental issues and threats, knows something about transparency. Proof to point, the organization recently lauded Apple Inc. for distancing itself from the U.S. Chamber of Commerce after the Washington lobby publicly opposed climate change legislation (H.R. 2454, The American Clean Energy and Security Act of 2009) circling Capitol Hill.

In a five-point statement on energy and the environment, the Chamber summarized its position: “There should be a comprehensive legislative solution that does not harm the economy, recognizes that the problem is international in scope, and aggressively promotes new technologies and efficiency. Protecting our economy and the environment for future generations are mutually achievable goals.”

Apple was joined by the likes of Nike and Johnson & Johnson, which have retained their respective memberships but censured the Chamber for its stance. Greenpeace was also quick to suggest other companies, such as IBM and Microsoft, should follow suit.

In an open letter to Chamber President Thomas Donohue, Catherine A. Novelli, Apple’s vice president of worldwide government affairs, explained why the company dropped its association. “Apple is committed to protecting the environment and the communities in which we operate around the world,” she wrote. “We strongly object to the Chamber’s recent comments opposing the EPA’s effort to limit greenhouse gases.

“Apple is working hard to reduce our own greenhouse gas emissions by relying on renewable energy at our facilities and designing more energy-efficient products for customers,” she added. “We have undertaken this unilaterally, and without government mandate, because we believe it is the right thing to do.”


Apple’s commitment to sustainability in the United States is commendable. But its unequivocal position raises important questions regarding the ethos of “green citizenry.” How far does social consciousness extend? Does this unilateral pledge apply to coal-powered manufacturing plants in China, where iPods, Macs, and countless other products are assembled at cut-rate costs? Or to Chinese laborers who breathe coke-choked smog?

To its credit, Greenpeace has previously challenged Apple on its recycling procedures and destruction of potentially toxic components and products after they expire—challenges that the computer manufacturer has addressed. Still, Greenpeace’s recent praise exposes an oft-overlooked double standard.

It’s no secret that Apple, Nike, and Johnson & Johnson rely on cheap labor in China and elsewhere to manufacture product. All three companies have encountered their fair share of criticism in the past regarding product quality and labor practices.

Environmental sustainability shares a similar ethical bond and many favored outsourcing countries are far more polluting and wasteful than a United States without cap-and-trade legislation. But green energy doesn’t power their economic engines. The other green does.

By publicly addressing its obligation to green best practices in the United States, then cementing its stance by dropping Chamber of Commerce membership, Apple exposed itself to criticism on the supply side.

As the Chamber alluded to in its statement, climate change is an international problem. In a truly green supply chain, equal standards should exist on both sides of the global divide; offshore supply chain partners should be pulled into corporate ethics compliance; and sourcing strategy should be a metric for sustainability. What’s green for U.S. consumers should be green for Chinese suppliers and laborers.

Consider this analogous example regarding Apple’s use of labor. Umair Haque, director of the Havas Media Lab, a strategic advisory, raises an interesting point in a July 2009 posting on Harvard Business School’s blog. In his posting, What Would a Fair-Labor iPod Cost? Haque ponders what an iPod might cost if it were produced stateside, and how that might impact consumer spending, the economy, and Apple.

By comparing U.S. and Chinese labor compensation, he derives a rough estimate of the cost differential: An American-made iPod Classic would be priced “just” 23 percent (or $58) more than one made in China.

“If goods cost what they should, we would consume what we could authentically afford, instead of over-consuming what we couldn’t,” Haque writes. “If Apple’s prices reflected real human costs, perhaps yesterday’s unsustainable large macro imbalances wouldn’t have built up in the first place. And that, from an economic point of view, would be good for everyone.”

Haque’s supposition, however uncomplicated, is interesting. He considers labor exclusively, disregarding the cost—and carbon footprint—of transporting and handling Apple’s product from Asia to the United States; the proximity of suppliers and manufacturers to raw material sources; what customers and Apple might consider “just”; and the U.S. consumer’s appetite for new technology.

His conclusion is more telling: “Apple is a constructive capitalist. It has done remarkably constructive things—on the demand side. It has freed people from the shackles of innovation-stifling monopolies in mobile computing and music, vaporizing evil in market after market.

“Yet, today, Apple faces a new challenge,” Haque adds. “Can it be equally constructive on the supply side? Can it offer even higher-value goods produced to a groundbreaking new set of labor standards for the 21st century? Can it bring production—not just consumption—out of the industrial era, and into a 21st century that demands a better kind of business?”

Extrapolate that idea to sustainability and you wonder, shouldn’t Apple make production a greener business, too?

If you consider labor practice and sustainability shared supply chain ethics, Haque’s point sticks—and pointedly—into Apple’s green bubble. On the demand side Apple has surely become a beacon of green awareness, thanks in dual part to Greenpeace’s past criticisms and the current marketability of sustainability to U.S. consumers.

Where Apple stands on the supply side is more muddled. Can it be equally constructive introducing green standards to its China suppliers, and countless others? Moreover, if climate change legislation is ratified, will Apple bring more manufacturing back to the United States in the interest of being green?

Apple is very attuned to human user interface. It also knows that pitching green is a necessary strategy for growing its brand in today’s competitive market. But environmental hubris the likes of which Greenpeace extols doesn’t hold water if it’s not sustainable across the global divide—if it’s not transparent. Any way you slice it, Apple’s greenness falls apart.

We’ve raised a lot of questions, and we’re looking for more answers. What do you think? Is there a green double standard? Please email your comments to: [email protected]