Saturday, 20 June 2009
Shame on Boots
A few years ago I was trying to get an event together about the ethical and environmental impact of private equity. On the positive side are groups like Generation who plan to use this mechanism to go further than any shareholder would allow in retrofitting major corporations for a low carbon economy. But on the negative side are the greedy bastards, pushing management to do anything to hype maximum short term growth so that their returns on equity (leveraged by bank debt) go sky high. The groups who I approached to host this event worried that since private equity firms are the dictatorships of business, no-one would dare speak out against them, certainly not as insider, but probably not in the media and consultancy realms either.
All of which is context for the announcement that Boots, a former quaker family business and always a benevolent presence on the high street, but now under private equity ownership has quit the Ethical Trading Initiative; a scheme set up after the wave of sweatshop and worker exploitation scandals in the 1990s, whereby most of the major UK retailers for instance guaranteed to only work with suppliers that pay at least the minimum wage.
Dan Rees, director of the ETI, said to The Guardian: "We are deeply disappointed that Boots have taken this decision, particularly at such a crucial time for the world's most vulnerable workers, who are bearing the brunt of the global downturn. The days when high-profile businesses could consider ethical trade as an optional extra are now gone. In our view, it is not the right time for major brands to be rolling back their commitments on labour standards, nor does it make good business sense."