Welcome to the Business Engagement Programme

Business.2010 newsletter: Financial Services

Volume 2, Issue 4 - October 2007. Financial Services

The formula for ethical capitalism

After a journey down an agribusiness supply chain, W. RICHARD “DICK” MONROE finally comes to terms with the concept of sustainability . It’s not without a certain degree of irony that I’m now seeing colleagues dropping the words “sustainable” and “sustainability” like business cards at industry conventions and sprinkling them liberally throughout discussions on national and international public policy dealing with commercial fisheries, aquaculture and other industries reliant upon nature’s resources from energy to agribusiness.

Coming from a corporate background steeped in all the jargon of yearly earnings, market share, and consumer loyalty, they were a bit alien better than a decade ago when I was immersed with my colleagues at Darden casting about for stable sources for lobster, crab, shrimp and other ingredients that made our family of restaurant household names and kept their tables filled with satisfied diners. Darden is a major player in global trade. In Asia, the Americas, the Caribbean, and throughout the Pacific Rim, representatives from Darden are afforded treatment traditionally reserved for visiting government dignitaries. Such is the power of the dollar and Darden had hundreds of millions of dollars for its purchasing endeavors.

Given the growing pressure from environmental groups on capture fisheries — wild-caught shrimp, tuna, Chilean sea bass, swordfish and others — and farmed seafood — shrimp, salmon, etc. — during the ‘90s I became very aware that if Darden was to continue its growth we would have to find product sources that were… well, sustainable.

Purchasing from communities
Then the term meant little more than a “stable” source. It wasn’t until I began a trans-global trek to virtually every point on the compass where Darden purchased seafood that the full concept of “sustainability” sank in. We were not just purchasing lobster or shrimp from vendors. We were purchasing from communities. We were having a direct affect on the lives of hundreds of thousands of people who, in turn, were either treating the environment well or treating it poorly in procuring the items we sought.

My first concern, predictable in any well-trained business professional, was for the bottom-line effect of controversy associated with Darden suppliers. The first fish, shrimp or lobster traced back to practices that degraded the environment or the people fishing or farming each would translate into headlines of “U.S. Corporate Giant Ravages Paradise in Pursuit of Profit.” My guide on this journey was a consultant affiliated with a unique breed of NGO, the International Foundation for the Conservation of Natural Resources (IFCNR). IFCNR believes deeply in the premise of the intrinsic good “ethical” global traders can do in conserving nature’s fauna and flora, and in particular her human resources. The concept of “sustainability” was literally fleshed out far beyond my initial understanding of the term. IFCNR does not believe that conservation and protection of nature and global trade are hostile entities. Quite the contrary, IFCNR sees global trade as essential to sustainability and the preservation of the planet’s biodiversity.

Governments, churches and non-profits can’t do the job. They don’t have the funds necessary to eliminate poverty, protect natural resources, enhance quality of life, and nurture conservation. That’s where ethical business steps in.

Setting standards
No matter where we went my guide put a human face on the individuals who caught or raised the seafood and the importance of their being paid well and provided stable jobs. He pointed out whether the local villages continued to languish in poverty or benefited economically from the Darden dollars spent in the area. He also brought home the importance of closely examining the environmental footprint left by each vendor. Did they crush the rain forest or empty the sea, or did they leave the land and sea in better shape than they found it?

Farmed shrimp were no longer a commodity. I came to see aquaculture, whether for shrimp or salmon or any other species, as a process that either destroyed mangrove stands or ocean ecosystems and enriched the owners or one that was compatible with and beneficial to environmental preservation and human resource development. Were workers and their families well paid, well fed, educated and provided health care? I came to understand that the ethical global trader can and must set standards. For example, Darden refused to purchase seafood from vendors who were not kind to the environment or who perpetuated social injustice among their workers.

In an age of instant global communications, word of rogue corporations who condone slash and burn environmental tactics and who exploit workers is fast brought to consumer attention. Fast profits from unethical behavior are alluring but just as quickly they disappear. Economic sustainability demands ethical behavior. Consumers and environmental activists alike shun products and pressure governments to close market doors to those who refuse to adhere to the basics of sound environmental and social justice practices. Global trade based on ethical capitalism and put into practice by ethical traders can truly contribute to protecting the Earth, helping to eliminate poverty, promoting biodiversity, and helping nations to cooperate and live in mutual harmony by means of their ethical trade relationships. It was Darden’s hallmark during my tenure there. It’s the basis for Sea Ark LLC — which demonstrates that by applying the principles of ethical capitalism a global corporation can partner with emerging nations to develop world class aquaculture and capture fisheries that preserve national sovereignty, produce exceptionally high quality, marketable products, create economic prosperity, incorporate the principles of environmental conservation throughout the process while generating a reasonable rate of return to investors.

It’s a formula, not theory, being spread by IFCNR.

W. Richard Monroe ([email protected]) is Founding Director, Darden Environmental Trust and Governor, the International Foundation for the Conservation of Natural Resources (IFCNR).