Apple Takes A Step Forward Towards CSR. But is Still Exposed…VERY Exposed

If the first step towards recovery is admitting that you have a problem, then readers will agree that Apple taking the time to meet with several of China’s most prominent Green NGOs was a first step for Apple. Particularly given the fact that Apple was largely unwilling to address the numerous labor and environmental failures taking place over the course of years.

And, for others, the fact that Apple has agreed to third party audits of some of the factories (mentioned in the August IPE report on Apple’s supplier) is also another positive step.  Particularly for a firm that has a shown a history of resisting the assistance/ over site of external organizations

For others, while these are seen as steps in themselves, it is not enough:

The environmental groups saw Apple’s reaction as positive, but still think the company should be more transparent and openly hold its Chinese suppliers accountable for environmental issues. “In the term of information transparency, Apple still has not done enough,” Friends of Nature Secretary-General Li Bo told Caixin.

So what is the real takeaway?

While encouraging to see that groups have found a way to bring Apple to the table, there are a few things that still bother me about the way that Apple has chosen to engage:

1) Following what was a fairly comprehensive report by IPE. A report that was compiled over years, and supported with hard data, pictures, and testimonials, Apple was only willing to arrange for a phone call. A sign that they were caught a bit off guard, and did not have the data they needed to defend themselves in person.

A particularly bad sign in my view given the history that Apple has in China with failures.  They simply should be on top of this… there is NO reason not to be.  There is no reason for waiting.

2) It was only during this meeting that Apple agreed to the audits.  Almost 3 months following the release of the reports, which is likely 6+ months after the failures occurred.  Which (in my mind) is a real failure on Apple’s part to show they are serious about the environmental problems that were highlighted.

According to the China Daily reporting:

Several delegates from the environmental groups said Apple intends to carry on that work in accordance with its own plans and at its own pace and does not want to tell outsiders what it is doing.

A statement that shows Apple is either is not fully on board with the idea that they ultimately own the negative externalities of their supply chain, or has yet to fully invest in developing the processes and people it needs to, and is unwilling to take material actions to the contrary.

My guess is it is in fact both.

That Apple’s executive leadership view these as issues their suppliers own, regardless of the damage that is done to the lives of line workers or residents living with the impacts of contaminated water. Which, given the fact that China is now China’s #2 market globally and produces more than 1billion USD per store, is in my mind a serious lapse in judgement.

Particularly as the Chinese government at all levels has grown more aggressive against firms who are violating laws related to the responsibilities of firms to the environment, economy, and society.  A government that has recently shut down several foreign factories (including one of Apple’s key suppliers), shut down many of Wal-MArt’s Chongqing stores for 12 days for abusing consumer trust, and a  whose leading think tank on issues related to society just released a report that claims foreign firms have worse CSR practices than Chinese firms.

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3 Responses to Apple Takes A Step Forward Towards CSR. But is Still Exposed…VERY Exposed

  1. Great post Rich – very interesting situation that unfolds at a critical time for Apple with the new Iphone4S launch and new company leadership. it will be interesting to see what Apple does after the factory audits are done. How it will disclose the information, etc. and obviously which actions are being taken.

    I have been out of the loop lately and missed the release of the report on CSR practices in China (that you mention at the end of your post). Would you have any link to download the report?

    Cheers – hope all is well with the family 🙂

  2. Hi Perrine

    Life with the new addition is fantastic!

    What I am thinking more about at this point is the fact that Apple has 82 BILLION USD in cash… and they feel no need at all (or accept no responsibility for) the impacts that the production of their products have on the environment or labor. It is an egregious disconnect.

    The report highlights were covered in China Daily. My TA is currently looking for the report itself, and will send to me when she finds…
    http://www.chinadaily.com.cn/china/2011-11/09/content_14067599.htm

    Hope all is well
    R

  3. Yes agree with you. It is probably that risks (reputational or operational) are not perceived to be big enough for the company?!? Thanks for the link. and yes, love seeing the photos of Ryan – he seems like a very happy little man. Hope you manage to get some sleep at night! Cheers,
    P.

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