CHAPTER 9
The Good Steward

Seventh Generation is among the most environmentally responsible companies in the world today. But leaders of the household and personal care products company will be the first to tell you they aren’t perfect.

They did just that in their 2008 Corporate Consciousness Report. “We are still working to replace the remaining synthetic ingredients in our products and to eliminate the contaminant 1,4-dioxane from our cleaning products,” cofounder Jeffrey Hollender wrote.¹

A likely carcinogen, 1,4-dioxane can form in cleaning products when modifying natural oils with the petrochemical ethylene oxide and sulfur trioxide.² Both Seventh Generation’s fabric softener and its dish soap liquid tested positive for 1,4-dioxane, the company said in the report.

Despite this admitted black eye, Seventh Generation’s track record has been a bright shade of green. Among numerous environmental awards, it was ranked as the best company on the planet by Better World Shopping Guide, a buying resource for ethically minded consumers.³ And Seventh Generation’s actions back up this honor. For example, the company in 2008 upgraded its product-testing regime, which led it to discover phthalates in its automatic dishwasher gel with a synthetic green apple scent. Although the particular phthalate found—DEP—is not a suspected carcinogen or endocrine disrupter, other phthalates have been found to be probable or possible health hazards.⁴ The company discontinued use of the green apple scent, replacing it with a natural grapefruit fragrance.⁵

The firm, founded in the late 1980s, also has taken steps to reduce its carbon footprint. It estimated that a plan to decentralize manufacturing and distribution operations would cut delivery miles to retailers by 48 percent.⁶

It’s all in line with Seventh Generation’s deep commitment to environmental and social responsibility. The company’s very name refers to the Iroquois concept that decisions today should account for their effect on the next seven generations.

Seventh Generation embodies many key features of a good steward. To start with, it communicates honestly with the public and other stakeholders about its effects on people and the planet. And its warts-and-all candor about challenges in making effective cleaning products that are environmentally sound—in contrast to many glossy, annual reports that only tout a company’s greenest side—captures the kind of transparency that is increasingly necessary.

Seventh Generation also takes care of communities and the environment. This includes philanthropic giving, work to limit the environmental damage of its operations and products, and efforts to educate the public on eco-friendly habits, such as washing clothes in cold water.

Beyond all this, Seventh Generation demonstrates another vital trait of good stewards—a degree of restraint. In particular, the company embraces the precautionary principle, which presumes a chemical may cause harm unless tested and shown otherwise. After all, DEP has not been shown to carry health risks like its chemical relatives. Still, the company is erring on the side of caution.

Those sorts of choices typically mean higher costs, at least in the short run. Additional testing and product development efforts shrink the bottom line. As such, demonstrating restraint can be difficult for the typical firm, with its quest for boundless growth and near-term profits for shareholders.

But taking the high road on potential chemical risks is not a hard choice at Seventh Generation. After all, the firm is acting as a steward for the current generation and six more down the line. And this isn’t just a motto dreamed up by a clever marketing team, with only halfhearted support from executives. A mission to leave the world a better place has been central to the company for more than two decades.

“From the very beginning, we’ve pushed to have a real impact on our competitors, suppliers, communities, and government,” the Seventh Generation Web site states.⁷ “Products may be the vehicle, but far-reaching, genuine change is the mission.”

Recast with a more encompassing purpose, worthiness with respect to communities and the environment comes more naturally to companies. This chapter spells out the features of good stewards.

Communities

Good stewards take care of the communities they touch. They abide by laws and regulations, care for employees, and pitch in to solve local and global problems. Ideally, companies harness their core capabilities to optimize their impact on communities. But in doing so, businesses should use discretion in the way they tout or tie strings to their philanthropic efforts. Good community stewards also show restraint when it comes to executive compensation, use of tax havens, and the presence of their brands.

WORKERS

We wrote about being a good employer in great detail in Chapter 7. But upstanding employee relations deserve some mention in the context of community stewardship as well. That’s partly because people care that local employers do right by their workers. A few years ago, public-relations firm Fleishman-Hillard and the National Consumers League advocacy group asked Americans about their definition of corporate social responsibility. A commitment to employees was the top answer in 2006 and the second-ranking response in 2007, behind commitment to communities.⁸

And even within the category “commitment to communities,” care as an employer matters, according to the 2007 study of over 2,000 U.S. adults. Asked about expectations of local companies’ participation in or contribution to their communities, 11 percent of respondents focused on responsibilities as an employer—such as treating employees well and providing a livable wage. Employee-related concerns ranked second to the expectation that companies make nonfinancial contributions like volunteering time, mentioned by 29 percent of respondents. What’s more, 76 percent of survey respondents said salary or wage increases should be placed above charitable contributions.⁹

Those findings aren’t surprising in light of the importance of jobs to a community’s overall happiness. In Chapter 2 we highlighted the public’s growing focus on economic security. No one expects companies to guarantee employment to workers in any community. But over the past three decades, American firms have tended to ax jobs first and ask questions later. For example, 75 percent of U.S. companies made either broad or targeted workforce reductions between the beginning of the financial crisis and early 2010, according to a study from consulting firm Towers Watson. The U.S. figure compared with 67 percent in Europe, 66 percent in Latin America, 62 percent in Canada, and 45 percent in Asia-Pacific.¹⁰ Some layoffs in recent years were made in particularly callous fashion, either right before the December 2008 holidays¹¹ or in a way that shifted blame for business troubles to workers themselves.¹²

Some companies, though, have shown greater care for local workers and therefore proven to be better stewards of their communities. During the recent downturn, some sought to cushion the blow of layoffs with generous severance benefits. Retailer Zappos.com, for example, laid off 124 employees in 2008 but gave the affected workers a farewell package that included six months of paid COBRA health coverage. And given the importance of good, stable jobs to communities—and a raft of research questioning the long-term payoff of layoffs¹³—some companies worked hard to avoid layoffs altogether in the recession.

Solving Problems—with Core Capabilities

Apart from taking care of workers, good stewards of communities work to improve society. For decades now, companies have given back in the form of donations to charitable groups that feed the hungry, care for the sick, and address other social ills. Some of these corporate gifts are remarkably generous.

Still, corporate giving alone is not what establishes companies as good community stewards. In the 2007 Fleishman-Hillard/National Consumers League study, when respondents were asked about their expectations for companies doing business in their own communities, three times as many favored nonfinancial contributions, such as community involvement and volunteerism, over financial contributions.¹⁴ And, as mentioned in Chapter 1, a survey of global consumers in 2010 found that 64 percent believe it is no longer enough for corporations to give money; they must integrate good causes into their everyday business.¹⁵

Companies have gotten the message. It’s common these days for businesses to organize volunteer brigades to clean beaches, fix up schools, and build homes for low-income people. But these sorts of generic acts of generosity, while good in themselves, aren’t the best a company can do. When companies contribute in ways that tap their core strengths, they maximize their ability to solve the world’s problems. Such acts also can signal genuine company commitment to a mission of serving many stakeholders—as firms take the time to apply their particular capabilities to tough dilemmas.

Increasingly, companies are doing just that.

One example of a company tapping its particular strengths is the way Procter & Gamble works to fight the problem of girls in the developing world missing several days of school each month while menstruating. The consumer products giant launched a program called “Protecting Futures,” which works with partner organizations to provide puberty education, sanitary protection products, and sanitary facilities to help vulnerable girls stay in school. The program also supports research on the issue. Since 2006, Protecting Futures has worked with eight partners in 17 countries, reaching more than 80,000 girls in the developing world.¹⁶

This effort shows reciprocity in action. On the one hand, society gets top-notch help: Procter & Gamble has great capabilities in encouraging the use of female sanitary products in different cultural contexts. On the other hand, P&G benefits from the philanthropy. The Protecting Futures project gives it a chance to showcase its products as well as learn more about new markets and product categories.

A virtuous, sustainable circle is possible. Companies that act as good stewards by using their specialized talents are rewarded in the marketplace. That business success allows them to continue providing such stewardship, which in turn leads to more business success.

Authors Michael Porter and Mark Kramer call for a close link between corporate strategy and philanthropic initiatives. They say corporate social responsibility “can be much more than a cost, a constraint, or a charitable deed—it can be a source of opportunity, innovation, and competitive advantage.”¹⁷

Restraint

It is important, though, to point out a risk in tying corporate social responsibility efforts to company business strategies. It’s a risk related to restraint.

Companies can go too far when it comes to philanthropy connected to core competencies and corporate strategies. They can, in effect, seek to capitalize on catastrophe or misfortune to burnish their image or bolster their market share. It’s possible to imagine that P&G is cynically using the issue of missed school days by girls in the developing world to create a new, potentially lucrative market.

Whether targeted corporate social responsibility efforts amount to thinly veiled attempts to boost the bottom line is a matter of both largesse and restraint. Do companies give a significant amount of their resources? And do they limit their attempts to enrich or glorify themselves?

This brings us to a second arena where moderation on the part of companies is merited: marketing. There comes a point when corporate presence is oppressive. When companies, in effect, overstay their welcome.

In her book No Logo, author Naomi Klein argues that companies are relentless in their efforts to force their images on people: “[T]his corporate obsession with brand identity is waging a war on public and individual space: on public institutions such as schools, on youthful identities, on the concept of nationality and on the possibilities for unmarketed space.”¹⁸

Klein points out a key truth—that historically, and especially over the past several decades, companies have tended to lack moderation in their marketing. They have been, as she puts it, “brand bullies.”¹⁹

For companies to be good stewards of communities, they must shift from bullying the public with their brands to knowing when to butt out. Yes, businesses ought to register their good deeds at least on their Web sites and annual reports so people can evaluate their corporate citizenship. But genuine stewards don’t need their names on computer rooms or on big banners touting their sponsorship of cancer fund-raising races. Gifts given quietly speak loudly about true community stewardship.

Companies often are themselves quiet about two final areas where restraint is important: CEO pay and tax havens. Firms too often have rewarded executives with multimillion-dollar compensation packages that reward risky, short-term thinking and mock the notion of community stewardship.

The recession revealed some of these excesses starkly. One 2010 study found that CEOs of the 50 firms that had laid off the most workers since the onset of the economic crisis took home nearly $12 million on average in 2009, 42 percent more than the average pay for CEOs at S&P 500 firms as a whole.²⁰ Good stewards of communities will rein in egregious executive compensation. By doing so, they improve the chances of managing with a long-term view, free up resources that can be used to pay rank-and-file workers better, and can invest more in philanthropic activities.

In a similar way, worthy community stewards will avoid use of tax havens.

Unfortunately, tax havens are like a second home to many major U.S. firms. Using a conservative methodology, we calculate that at least 59 firms in the Fortune 100 have employed tax havens. Those tax-avoidance practices take a toll on government revenue—and therefore on the services available to communities. A 2009 report by the Congressional Research Service indicated corporate profit shifting to low-tax locales could cost U.S. taxpayers as much as $60 billion per year.²¹

Not all big companies shirk their U.S. tax duties through tax havens. Disney, UPS, and Walmart are among the firms that avoid the practice, and thereby go beyond the letter of the law to do the right thing as community stewards. Increasingly, all companies will be expected to do the same.

Environment

Stewardship of the environment means taking care of the planet.

Good environmental stewardship starts with staying within the limits of relevant laws and regulations. It includes good-faith communication with stakeholders, such as documenting and disclosing a company’s environmental impact. It means minimizing ecological harm. And good environmental stewards go further, taking steps to fix ecological problems. As with stewardship of communities, environmental stewardship also requires a measure of restraint.

ABIDING BY THE LAW

Environmental stewards rigorously abide by the law. Governments throughout the globe have established many rules designed to protect the earth’s resources, and more environmental regulation is likely.

Companies, though, have been less-than-squeaky clean when it comes to complying with these laws. Even in the wake of notorious incidents like the Exxon Valdez oil spill that fouled hundreds of miles of Alaska’s shoreline in 1989, firms continue to run afoul of environmental rules. This is especially true for companies in the energy sector, according to our research on government fines slapped on Fortune 100 companies. For example, ExxonMobil was penalized in 2008 for failing to comply with a 2005 U.S. Clean Air Act settlement agreement. The oil giant agreed to a pay a penalty of nearly $6.1 million in connection with the alleged violations.²²

As of early 2011, it remained unclear what amount of fines would be leveled against BP and other firms responsible for the Deepwater Horizon explosion and oil spill in the Gulf of Mexico. But in December, 2010, the U.S. Government sued BP and other firms involved in the spill, seeking penalties under the Clean Water Act and asking the court to hold most of the defendants “liable without limitation” under the Oil Pollution Act. Authorities continued to probe the incident, considered one of the worst accidental oil spills in history at approximately 4.9 million barrels.²³ But news reports in the wake of the disaster indicated BP did not follow proper procedures as it tried to get a well ready that was behind schedule.²⁴ And the bipartisan commission that investigated the spill came to this damning conclusion in its January 2011 report:

The immediate causes of the Macondo well blowout can be traced to a series of identifiable mistakes made by BP, Halliburton, and Transocean that reveal such systematic failures in risk management that they place in doubt the safety culture of the entire industry.²⁵

Industry defenders say a spotless environmental record is all but impossible. They argue that pollution-prevention equipment and procedures can be costly, translating into a lower standard of living for consumers and society at large. But such excuses for treating environmental rule breaking as an acceptable cost of doing business will increasingly ring hollow. More and more, consumers, workers, and investors will reward environmental stewards, not scofflaws.

COMMUNICATION

The public also will reward the companies that communicate clearly about their ecological impact, while distancing themselves from firms that are less than transparent. Candid communication is important to environmental stewardship in part because abiding by the law often is not enough to protect the planet. Regulations can lag behind what’s called for by scientific consensus or the general public.²⁶ The generation of greenhouse gas is one example. The science is abundantly clear that current levels of greenhouse gas emissions put the earth on a collision course with catastrophic climate change. But the 2009 talks in Copenhagen failed to result in a binding agreement for tough new limits on carbon emissions. And country-specific efforts to tackle the problem of global warming have gotten bogged down in domestic politics.²⁷

As a result, citizen-consumers hoping to help solve environmental problems have to rely on marketplace pressures by patronizing green firms. To do that, the public needs companies to come clean about their ecological impacts.

Good stewards are doing so through various voluntary reporting efforts.

Among them is the Carbon Disclosure Project (CDP). Launched in 2000, the not-for-profit organization based in the United Kingdom collects and distributes information about the effects of companies on the earth’s climate, as well as develops international carbon reporting standards. As of early 2011, roughly 3,000 organizations in some 60 countries measure and disclose their greenhouse gas emissions and climate-change strategies through the CDP, up from 235 in 2003.²⁸

Lord Adair Turner, chairman of the United Kingdom’s Financial Services Authority, has pointed to the power of the project in putting companies on a path of better environmental stewardship.

“The first step towards managing carbon emissions is to measure them because in business what gets measured gets managed,” says Turner, whose organization regulates the financial services industry in the United Kingdom.²⁹

The Dow Jones Sustainability Indexes, highlighted earlier in the book, also are fostering extensive reporting on environmental effects. Companies filling out the questionnaire for inclusion on one of the indexes are asked to estimate their total direct greenhouse gas emissions in terms of metric tons of CO₂ gas or its equivalent. They also are probed about their total energy consumption, total water use, and total waste generation, as well as their targets for these categories and the trends of their performance against the targets.³⁰ The number of companies globally that completed the Dow Jones questionnaire more than doubled between 1999 and 2009, from 304 to 656.

Still, many companies are falling short of good environmental communication by engaging in “greenwashing.” That term has emerged in recent years to describe businesses that try to cloak less-than-good environmental stewardship with eco-marketing or branding. As mentioned in Chapter 1, a 2009 study by consulting firm TerraChoice Environmental Marketing found that 98 percent of consumer products were greenwashed in some fashion, such as the use of irrelevant claims, undocumented statements, or false labels.³¹

Good environmental stewards not only steer clear of greenwashing but also admit challenges connected with making their operations greener.

Seventh Generation cofounder Jeffrey Hollender makes this point in The Responsibility Revolution, a book he cowrote recently with former Fast Company editor Bill Breen.

“Given that every organization is to some degree imperfect, it’s vital that companies be transparent about their social and environmental shortcomings as well as their successes,” Hollender and Breen write.³²

MINIMIZING ENVIRONMENTAL HARM

Seventh Generation’s quest to make products without 1,4-dioxane fits into another characteristic of a good environmental steward: limiting environmental damage.

Good stewards, that is, will not just talk the talk about going green. They will walk the walk, following the old hiking principle to have a minimal impact on nature. Initial steps include office recycling and use of energy-efficient appliances and equipment. More elaborate efforts range from weatherizing factories and other facilities to redesigning products and packaging for reduced waste and pollution to evaluating entire supply-chain and logistics networks to cut down on carbon emissions. At the far end of the scale are company strategies to make the entire lifecycle of products green, which includes planning for the eventual reuse of exhausted products.

Newsweek ranked computer maker Hewlett-Packard as the greenest of America’s largest companies, saying it was the first major information technology company to report greenhouse gas emissions associated with its supply chain.³³ HP also has taken the idea of a sustainable product lifecycle farther than many firms. For example, it has placed environmental stewards on design teams to identify design changes that could reduce environmental impact throughout a product’s lifecycle.³⁴ HP also lets consumers recycle a number of products, including its inkjet and laser printer cartridges as well as rechargeable batteries.³⁵ The program covers computer hardware made by both HP and other companies.³⁶

HELPING THE PLANET

Good environmental stewardship is about more than minimizing the bad a company does to the earth. Given the range and severity of ecological troubles at hand—from perilous climate change to tainted drinking water to polluted oceans—good companies also will do the planet good. They will play active roles in solving major environmental problems, by means such as donations, direct involvement in conservation projects, and innovative green business initiatives.

An example of such a business initiative is the Sustainable Product Index project launched by Walmart in 2009. The effort aims to create a simple rating for consumers about the sustainability of products, giving them a window into the quality and history of the goods they buy. The retailer began with a survey of its suppliers on the topics of energy and climate, material efficiency, natural resources, and people and community.³⁷

And as big as its own operations are, Walmart is thinking bigger about the index. It helped to create a consortium of universities that will work with suppliers, retailers, nongovernment organizations, and government to create a global database of information on the lifecycle of products from raw materials to disposal. Walmart provided initial funding for the Sustainability Index Consortium but invited all retailers and suppliers to contribute.

“Higher customer expectations are a permanent part of the future,” Walmart CEO Mike Duke said when the index project was announced. “At Walmart, we’re working to make sustainability sustainable, so that it’s a priority in good times and in the tough times. An important part of that is developing the tools to help enable sustainable consumption.”³⁸

The Sustainable Product Index is going to be a mighty tool, predicts Harvard Business School professor Rosabeth Moss Kanter, who recently wrote a book about companies that use their power to improve society, knowing that their innovations will create profits as well as social benefits. Walmart’s sustainability index effort qualifies the company as one of these “SuperCorps,” she wrote in a 2009 blog item.

“Walmart has just changed the game with respect to environmental issues,” Kanter wrote. “By rolling out an environmental labeling program disclosing to consumers the environmental costs of making products sold at Walmart, the $401 billion retail behemoth has transformed green standards from nice-to-have to must-have.”³⁹

Moderation

Environmental stewardship must be about both action and restraint. About expanding what is green and reining in greed.

Taking proper care of the environment means seeking to operate in harmony with the natural world. And that, in turn, requires an end to the endless hunger for growth that has long defined corporate success. A constant quest for more revenue and profits typically translates into environmental trouble—into things like the development of land for new offices or factories, the extraction of more natural resources and the selection of materials and methods that are cheap to companies and consumers but costly to the environment.

We are not saying stewardship of the planet requires a rejection of growth altogether on the part of companies and entire economies. But moderation increasingly is a must.

What does this mean in practical terms? It means killing products where a life-sustaining alternative can’t be found at a reasonable price. And it entails substituting ecologically benign materials and processes for destructive ones, even if that means greater expenses and fewer profits. In 2009, for example, Seventh Generation eliminated 1,4-dioxane from its hand dishwashing liquid.⁴⁰

Seventh Generation practices another key behavior related to stewardship and restraint: going to great lengths to make sure new products are not harmful. This approach was codified as the Precautionary Principle in a 1998 conference of scientists, government officials, environmental leaders, and others.

It is summed up as follows: “When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically.”⁴¹

Seventh Generation put the precautionary principle into effect when it nixed its green apple-scented dish cleaner because of possible problems with the phthalate DEP.

Such a go-slow approach isn’t the dominant philosophy behind much of the regulation governing the U.S. economy today. But more and more, it will be the only acceptable approach for companies. In a seller-take-care world, good environmental stewards will err on the side of caution.

Stewardship Takes Shape

Exercising restraint, working to leave less of a trace on the planet, and helping to solve social and environmental problems can involve higher costs, especially in the short run. But stewardship increasingly pays off. As noted earlier, Walmart’s reputation has risen in recent years. Going green also has been good for HP. At the same time that HP’s sustain-ability efforts reduce landfill waste, they also give the company a look at the guts of competitor machines, provide feedback on how customers use products, and improve the design process.

“Our environmental stewards help product designers see that if you make a product that is easier to take apart at its end of life, it’s easier to put together in the first place,” John Frey, HP manager of corporate environmental strategies told IndustryWeek magazine.⁴²

Seventh Generation also shows the connection between good stewardship and business success. Its decentralized distribution plan promises not only to cut greenhouse gas emissions but trim transportation costs as well. And consider the company’s quest to create dish soap without 1,4-dioxane. Changing the manufacturing methodology led Seventh Generation to increase the percentage of renewable materials in the soap by 27 percent, and the resulting product had 53 percent better performance in a technical study.⁴³

Seventh Generation’s sales jumped 51 percent in 2008 to nearly $140 million. Although the company’s sales slipped 2.8 percent in 2009, sales climbed in early 2010, and Seventh Generation expected growth of 20 percent for the year.⁴⁴

In general, stewardship is starting to shape the business world. As we discussed in Chapter 2, more and more business leaders are adopting an ethos of sustainability. Business schools are also making environmental concerns key to the curriculum in growing numbers of “green MBA” programs.⁴⁵ A related development is the emergence of social entrepreneurship, the idea that business principles can be harnessed in the service of solving a social or environmental problem. A host of organizations and foundations now support people with visions to improve society, such as McKinsey & Company alumnus Vikram Akula, who founded SKS Microfinance to give loans to poor women in India.⁴⁶

What’s more, some states are considering bills that would make it easier for corporations to formalize the values of stewardship in their governing documents.⁴⁷ Vermont, for example, passed a law in May 2010 that allows organizations to form “for-benefit corporations” that aim to create public benefits such as improving the environment, improving human health, and promoting the arts or sciences.⁴⁸ Earlier in the year, similar legislation became law in Maryland.⁴⁹

Those legislative milestones are partly the work of a consulting firm, B Lab, which is behind a parallel effort in the private sector to redefine business success. B Lab certifies B Corporations, which are companies that pledge to incorporate the interests of employees, consumers, the community, and the environment into their governing documents.⁵⁰ As of early 2011, 371 companies had agreed to those principals. The companies represent 54 industries and annual revenue of $1.8 billion.⁵¹

Among the B Corporations, not surprisingly, is Seventh Generation. It has been among the leading companies calling for a new philosophy of business. It has sought to be worthy in all aspects.⁵² And just as American Express found its efforts to improve customer service bolstered by good behavior as an employer and a steward, Seventh Generation’s aim to be a worthy steward has been reinforced by its worthiness as an employer and seller.⁵³

To be sure, Seventh Generation has hit rocky patches. In late 2010, for example, it weathered a leadership crisis. The company removed Jeffrey Hollender from its board of directors and fired him from his post as “chief inspired protagonist.” The move to oust the longtime face of the firm took place about a year and a half after Hollender stepped down as CEO, naming PepsiCo veteran Chuck Maniscalco as his replacement as part of a plan to increase annual revenue to $1 billion.⁵⁴

Maniscalco resigned in September 2010. But Seventh Generation’s board persuaded him to stay on as a transitional CEO, and as of late 2010 he was considering applying for the permanent job again.⁵⁵

Fast Company magazine said the shake-up raises the question of whether growth ever can be sustainable. “In order to expand further, Seventh Generation seems to think that it needs to dispose of the man who infused the company with the green business values that it champions. Whether Seventh Generation can retain those values after Hollender’s departure remains unclear.”⁵⁶

Company officials, though, have a different view. They portray Hollender’s departure as a sad incident but one more about the difficulties of a founder letting go of the firm he helped launch than any real change of course.⁵⁷ Dave Rapaport, Seventh Generation’s Director of Corporate Consciousness, says the company has every intention of retaining its world-changing values.

“We certainly hope to,” he says. “You shouldn’t just take our word for it, you should watch us.”⁵⁸

Rapaport’s comment indicates the company isn’t backing away from the transparency that has been a bedrock of its sound stewardship. We will keep watching Seventh Generation. As will sustainability advocates and the company’s employees, suppliers, and growing numbers of customers. If it continues to demonstrate good stewardship through thick and thin, we wouldn’t be surprised if Seventh Generation endures for many more generations.

CHAPTER NINE SUMMARY

As both transparency and consumers’ expectations continue to increase, so too will the concept of corporate stewardship. The emerging concepts go well past traditional concepts of corporate social responsibility.

Good stewards take care of the communities they touch, in the following ways:

• abiding by laws and regulations

• caring for employees

• using their core capabilities to help solve local and global problems

• exercising discretion in how they apply and communicate about their philanthropic efforts

• showing restraint when it comes to executive compensation, use of tax havens, and the presence of their brands

Stewardship of the environment means taking care of the planet, including the following:

• staying within the limits of relevant laws and regulations

• good-faith communication with stakeholders, such as documenting and disclosing a company’s environmental impact

• minimizing ecological harm

• going further, taking steps to fix ecological problems

• incorporating a measure of restraint, such as adopting the “precautionary principle” in the development of new products