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Why corporations now must compete on social and environmental issues
Future regulators of corporations will look less like bureaucrats and more like your next-door neighbors. That's the surprising scenario set out by Steven Lydenberg, chief investment officer of Domini Social Investments, in a new book "Corporations and the Public Interest" (Berrett-Koehler). Here are edited excerpts of his conversation with the Monitor's Laurent Belsie:
President Bush is likely to get another conservative judge on the Supreme Court. If the court shifts to the right, will corporations rethink some of their more liberal policies, such as same-sex partner benefits?
Lydenberg: If you're a company like Hewlett-Packard - which has had a deep commitment to employees over the years - you recognize that your investment is not in factories, not in capital-intensive equipment, but in your own employees. And if you want to attract and retain those employees, you have to invest in those employees and compete for those employees. So policies like same-sex domestic partner benefits are something that you will use because the marketplace is forcing you to do those, rather than whatever particular political climate there may be at the moment.
Oil companies have announced huge profits. Are they gouging consumers?
You have a classic situation of strong demand and relatively limited supplies. So the price is going to go up and companies' profits are going to go up. The real question to my mind is: Do those prices reflect the real cost of oil to society? We have had unrealistically low energy prices over the years, and the higher prices that we are now being forced to pay raise serious questions about whether or not we should be investing more heavily in conservation and alternative energies.
What's your answer?
We need to recognize, first of all, that we need a diversified energy base in this world. And it is a bit ironic to me that it is not the oil companies but General Electric that is the second-largest producer of wind- generating equipment in the world after a Danish company. General Electric just bought AstroPower, which is a financially troubled but interesting solar-energy company. So my question is whether or not the oil companies are going to consider themselves truly energy companies and develop a broad base of energy for this country.
Your book argues that a new line must be drawn between government and corporations.
It is a new line that has been drawn already. Since the early 1980s, we've seen a tremendous transfer of assets and tremendous deregulation of business - whether you're looking at Russia, which essentially has privatized its entire industrial base, or China, where free-market principles are being integrated into a state-controlled economy, or Europe. where one industry after another has been privatized, or the United States. where we have deregulated many industries.
Hasn't deregulation helped the economy?
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