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Is there a difference between diversified groups and single companies?
Last Post 25/07/2015 22:21:39 by Joel. 5 Replies.
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Joel
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Posts:6


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11/05/2014 23:46:45
    Hi

    I agree with Ethical Consumer that I would rather buy an eco and socially sustainable product or service from a 100% ethical business. However that is not always an option for all of us due to issues of location, cost, suitability, etc. Therefore we are left to choose from the best of the rest and this is where the scoring system sometimes lets us down or at the very least doesn't support us to make an informed choice.

    Unless it is a big event I guess that what happens in one part of a diversified group has little impact on other parts of the group. So as a relatively small group of ethical consumers we are most of the time only creating small ripples. I'll give an example: when I buy clothes and I choose for example between Primark, John Lewis and M&S I think the current scoring system would pick Primark for me. This is because I am a veggie but when I buy clothes it is irrelevant to me that John Lewis and M&S sell meat and Primark doesn't. What matters to me is the clothing supply chain. When I choose a supermarket then its policies on foie gras and free range eggs are then important.

    Can ethical consumer introduce the ability to exclude the scores from the following:
    Minority holdings (ie, a company has a stake in an 'undesirable' entity but does not control it).
    Other companies in a group.
    Other divisions within a company.

    Interested in what others think.

    Cheers
    Joel
    Joel
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    Posts:6


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    12/05/2014 22:53:25
    NB Primark are a bad example because they are bottom of the rankings anyway. But I think the point stands if you replace it with say H&M.
    heatheradmin
    Senior Member
    Senior Member
    Posts:173


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    08/12/2014 13:11:08
    Hi Joel,

    Thank you for your suggestion.

    Unfortunately the only way to exclude scores is through our categories. So if you went to the clothing product guide and wanted to view companies without animal rights issues affecting their scores you can remove them using the sliders.

    Kind regards,

    Heather
    Joel
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    Posts:6


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    03/06/2015 19:12:02
    Heather

    Thank you for replying and sorry for the delay in getting back to you but your response only partly solves the problem in some cases. It depends on the reader knowing lots about all the different parts of the group so they know how to adjust their rankings. However we buy the magazine exactly because we don't know this level of detail and we want EC to tell us!

    Using my example again if Primark use factory farmed animals to make their clothing then that is much much more relevant to my clothes purchasing decision than M&S and John Lewis stocking factory farmed meat in their grocery area (but only selling leather shoes and no other animal based clothing). Your ranking system doesn't allow me to adjust for these factors.

    Big issues, such as Amazon's tax dodging, affect all their products and services but generally different parts of a big company have minimal interaction so a small scale boycott will have no effect on the whole group. However a small scale boycott focussed on a single part has much more chance of having an impact. By making the changes I suggest EC can also increase its impact by directing consumers to parts of mainstream companies that are doing good things (boosting them relative to their badly behaved competitors).

    Giving the option to exclude minority holdings, other companies in a group and other divisions within a company is only a technical problem for EC, ie, for the same amount of research you will have much more impact! But more than that the current research is often irrelevant and at worst a serious distraction for consumers trying to make ethical purchasing decisions - it is urgent that EC addresses this.

    regards
    Joel
    heatheradmin
    Senior Member
    Senior Member
    Posts:173


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    16/06/2015 10:13:47
    Hi Joel,

    Sorry for my slow reply. I would disagree that including minority holdings and other groups / divisions is a distraction for consumers.

    As a consumer I want to know what companies are linked to the brand I am buying from. When I buy a product from a company I want to know the whole story i.e. if it is involved in activities through other subsidiaries which I disagree with i.e. animal testing / arms and military supply.

    Part of Ethical Consumer's remit is to provide consumer's with choice and options through our product guides. As I said before we have an option to remove certain categories on our product guides by using the sliders and if you are a subscriber you can read the stories behind the scores and view a family tree.

    We do direct consumers to companies which are making a positive steps however if a company through one of its subsidiaries is producing a Fairtrade and organic chocolate but through another subsidiary is supporting land grabs / polluting land / denying workers' rights then our ratings will show this. This allows us to highlight the hypocrisy of many large corporations who view “ethical” products as just another strand of their business while continuing to practice unfair terms of trade through another.

    We are currently looking at developing a new database for our ratings system and suggestions on how subscribers and consumers would like to use our website are welcome.

    Kind regards,

    Heather
    Joel
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    Posts:6


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    25/07/2015 22:21:39
    Hi Heather

    Just noticed your response. It does assume there is an ethical company but often consumers are trying to choose the 'least bad' option.

    If we take two large companies who compete in say, clothes retail: one is owned by a private equity company and is very diversified; the other is widely owned (eg, listed on the London Stock Exchange) but just focused on clothes retail. The pressures to cut costs, make more money and dodge tax are the same but in your rankings the diversified company will always get marked down more, just because of slight difference in ownership. And ultimately those that own the shares on the LSE also own the private equity fund. To differentiate in your rankings just doesn't make sense.

    For consumer boycotts to work they need to be focused and clearly explainable to consumers, the companies, media, etc. In tandem with this 'positive purchasing' choices also need to have a clear basis. Otherwise we could end up with a boycott of a mainstream clothing chain, that sells only fairtrade, because its parent group has a 10% stake in two tiny companies that make radar and sausages.

    I hope the new database includes the option to exclude the less relevant parts of a diversified company. I think this is straightforward to do and would happily talk it through with your developer.

    Cheers
    Joel

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