The video above is from Robert Redford’s Sundance Channel, a cable channel in the U.S. which features a number of programs about environmentalism. This clip from one of these programs, Eco Biz, features a solar-powered Laundromat in one of America’s coldest and windiest cities: Chicago. In it, the owner of World’s Largest Laundromat, Tom Benson, tells exactly how much of an investment it took to convert his business and how much it’s saving and benefitting his business in turn. Here are a few excerpts from the show:

“In 2001 the first gas bill that I had was for $13,000, which at that point represented about 25% of my revenue”.

“I ended up buying a system of about $150,000 with the state providing about $75,000 of it.”

“It just was clear that if you took a long term view, at worst you would probably pay off the investment in about 5 years. And this is a building that has been a laundromat at this site since 1983 so the assumption is this will be here 20 years from now.”

He calculates it saves him $25,000 annually.

“It’s helped create a reputation for the business as being responsible, it’s obviously lowered my costs which have allowed me to do other things with the money, rather than pay the gas company…”

Proof that it can be cost efficient for even a small business owner to go green.

“Once they found out what we were doing, they saw us as being very pro-environment…very innovative and all of a sudden the business started to swing our way.”

"It was slow to start, but we saw some maverick small companies with phenomenal growth rates, in part because people tuned into the values of these entrepreneurs and bought their products," says Deborah Nelson, executive director at the San Francisco-based Social Venture Network, citing ice cream do-gooders Ben & Jerry's, the earth-embracing Body Shop International founder Anita Roddick and natural toothpaste titan Tom Chapell, of Tom's of Maine.
Nelson believes that recent events such as the Sept. 11 terrorist attacks, heightened attention to global warming, and the fact that celebrities like Angelia Jolie and Leonardo DiCaprio have made being responsible "cool" have caused the trend to trickle up to the corporate giants. "Mainstream companies are waking up," she says. "It's not just a space for pioneers anymore."

Can you afford NOT to run your business ethically?

The video you see here is a fun example of how ethical business practices help everyone to win. 

“We believe fresh cosmetics are more effective and require fewer preservatives. That's why we hand-make our products in small batches in our own factories . And unlike other beauty companies, many of our products are vegan, and none of our ingredients or products has been tested on animals.

“We choose ethical sources for the ingredients in our cruelty-free products and use minimal or recyclable packaging. We also give generously to charities championing animal rights, humanitarian concerns and environmental conservation.”

The best answers come from a recent study conducted by IBM’s Global Business Services and their Institute for Business Value. One of the authors, Gregory Pohle, appears in the video above explaining the highlights, but you can also read the summary or download the full report by clicking here.

For the study, IBM surveyed more than 250 business leaders globally, but didn’t only speak to the CSR contacts. Rather, they went straight to the top to find out how important CSR was to the way that they think about their business.

In his interview, Pohle explains that consumers are one of the major driving forces behind the rise of ethical business practices and corporate social responsibility (or CSR).

“One of the most critical drivers of the importance of corporate social responsibility in the last few years has been the internet. What it’s done is that it’s allowed consumers two things:

“One is greater visibility into the actions the companies are actually taking, so they know more about what companies are doing today than they ever have in the past.

“The second thing that it’s doing is it’s allowing consumers to band together to create advocacy groups much easier than they could ever do in the past, and to exert influences on corporations once they’ve banded together.

“So as a result of this, companies are doing two things:

“One is-they’re increasing the transparency with which they operate. So that they are not being pried open by consumers, but they’re rather sharing much more openly, and leveraging the power of the visibility that the consumers have to their benefit. I.E. they want to know when something’s amiss and they will volunteer to take of problems when they arise.

“The other thing that they’re doing with respect to the advocacy issue is to drive new opportunities to collaborate and interact with the consumer, so that they’re getting feedback and support from the consumers on a day-to-day basis, relating to both their products and services, as well as the way in which they conduct business within different communities, or even overseas.”

He goes on to say that though there are a few major stakeholder groups that are part of a company’s CSR landscape, the first is customers, because “they’re the ones that have the greatest and sometimes most influential ability to change the direction of the company.”

How can you use this power to your advantage, both as a consumer, and in your business?

To answer the question as to whether fashion or food and personal consumer goods are leading the ethical revolution, we turn to magazines in both the U.S. and U.K. that make a study of such subjects.

In the U.S. we look to Business Ethics – The Magazine of Corporate Responsibility, and their “100 Best Corporate Citizens” list. This list has gained recognition as the most influential corporate ranking after two of Fortune Magazine’s well-known lists. Their scoring system ranks companies according to financial, environmental, social, and governance performance. According to their results, only six of the top 100 companies are in the business of fashion and apparel:

• #3 Nike
• #8 Timberland
• #24 Gaiam
• #25 GAP
• # 76 Coldwater Creek
• #85 Nordstrom

Within the top 25 companies, there are just as many food and personal goods corporations represented, but overall, there are twice as many. Still that only accounts for 20% of the companies, leaving the remaining 80% to the real leaders of the corporate citizenry, made up of technology, business suppliers, industrial, medical and financial companies. So in the U.S., to answer our question, ethical food suppliers are in the lead.

In the U.K., we turn to Ethical Consumer Magazine and their Ethical Consumerism Report 2007. Produced by The Co-Operative Bank with additional research by the Ethical Consumer Research Association, they found:

The biggest overall rise in ethical spending occurred in the food and drink sector, with an increase of 17% taking the total to £4.8 billion and accounting for 5.1% of the UK’s total food and drink sales. The sale of Fairtrade goods such as tea, coffee and bananas increased by £90 million (46%), driven in part by consumer awareness and greater availability. Organic food also increased (18%) although the increase in the market for sustainable fish (224%) was the most impressive.

Although this means that the food industry seems to be the leader in the ethical revolution, the fashion industry has made the greatest strides. Their research revealed that “the sale of ethical clothing was up by a massive 79%” from £28m to £52m.

Evidence of this shift can be seen in the video above. Ethical Fashion has been grabbing attention at the London Fashion Week, as well as at the New York Fashion Week.

If we can base any trends on the information from SustBrands, whose research provides information for ethical investment fund managers and private investors in Australia and South Africa, we would find their “Sussed Consumer Brands 2007” report highlights twice as many fashion and apparel companies internationally as it does food and personal products.

Can this also be attributed to, as it says above, “consumer awareness and greater availability”?

Or is it just that the fashion and apparel industries are slower to respond, being perhaps further removed from the customer’s expectations?

What needs to happen in order for ethical fashion to be better represented in the U.S.?