10 Facts You Didn’t Know about Immigration and the Undocumented
The Real Roots of Prison Recidivism

Credit Suisse and the Other Type of Ethical Business

By Fran Hawthorne

Over the past few decades, public activism has—with growing success—pushed companies to act in more ethical ways. From Apple to WalMart, businesses are monitoring the working conditions at factories overseas, reducing energy use and carbon emissions, buying products only from animals that were raised humanely, using organic ingredients, and taking other socially responsible steps.

All this is, of course, good for the planet, customers, neighbors, and employees.

But in the glow of these achievements, have we forgotten a more fundamental type of corporate ethics? Ethical behavior that predates the Corporate Social Responsibility movement. Ethical behavior that applies even to executives who hate unions, love to drive SUVs, and don’t believe climate change is a problem.

The ethics of basic honesty and transparency.

The recent $2.6 billion fine against Credit Suisse, the second-largest bank in Switzerland, is a reminder of how much the business world still lags on that ethical front.

Mind you, Credit Suisse did not plead guilty to any wrongdoing in connection with the 2008 financial crisis. No, this was merely a case of helping a few thousand rich Americans avoid taxes—a simple, old-fashioned crime.

As for the global financial crisis, no firm has been punished anywhere near as severely—and only one midlevel executive (coincidentally, at Credit Suisse) has gone to jail—for peddling mortgages to borrowers that the firms knew couldn’t afford the loans, then hiding the real terms of the mortgages from those borrowers, then packaging those risky mortgages and selling them to investors without revealing the true risks, then foreclosing on the poor duped borrowers, and then lying about their own losses.

True, this kind of unethical business behavior is probably as old as the first barter deal, or at least the Dutch purchase of Manhattan Island in 1626. Dangerous meatpacking practices and the widespread hawking of poisonous, unlabeled patent medicines led to the passage of the Pure Food and Drug Act of 1906 and the establishment of the Food and Drug Administration. Greedy, unscrupulous merchants and bankers are the villains of books and movies like The JungleIt’s a Wonderful Life, and A Christmas Carol.

Indeed, thanks to the FDA, the Securities and Exchange Commission, the Environmental Protection Agency, the new Bureau of Consumer Financial Protection, and other government regulators, the business world is probably more law-abiding than ever before in history. Yet Credit Suisse is far from the only corporate criminal roaming the planet. (Just search BP-Deepwater Horizon, for starters.)

So how can we consumers even think of asking companies to pay attention to secondary ethical issues like recycling or onsite child care, when they aren’t even following basic, centuries-old ethical standards?

The answer is that decent treatment of workers, the environment, and source material—which is to say, corporate social responsibility—isn’t secondary or separate. These are, in fact, basic business practices, just like honest labeling and pricing. It’s all part of a continuum.

A company that is ethical in its attitude toward its work force is more likely also to be ethical toward its customers and investors. 

Hear Fran Hawthorne talk more about socially responsible investing, climate change, responsible consumerism, and her award-winning book 
Ethical Chic: The Inside Story of the Companies We Think We Love on Patrick McCarty's Insight Radio (skip to 26:51 for “Fran's Corner”):


Fran Hawthorne, photo by Leonard YakirFran Hawthorne is the author of Ethical Chic: The Inside Story of the Companies We Think We Love. This post is adapted from Fran’s Corner, her weekly show on the global political-cultural talk show Insight Radio, available on the CNN Website at insighttalkradio.com.