The Triple Bottom Line

How Today's Best-Run Companies Are Achieving Economic, Social and Environmental Success - and How You Can Too

Andrew Savitz

• Publisher: Jossey-Bass
• Year: 2013
• Print ISBN: 9781118226223
• eBook ISBN: 9781118330371
• Edition: 2
• Topic: Business
• Subtopic: Business General
• Index: Business

The classic guide to sustainability strategy and implementation—updated for today's businesses

To ensure business success, companies must embrace sustainable management. Firms need to find the overlap between business interests and the interests of society and the environment before they can secure a lasting competitive edge. By making the case for sustainability as a fundamental business practice, The Triple Bottom Line became an instant classic when first published in 2006, showing a generation of business leaders how to find their sustainability sweet spot—where profitability merges seamlessly with the common good. Now updated with ground-breaking stories of successes and failure, this revision of The Triple Bottom Line is a critical resource for all managers and leaders.

• Features in-depth success stories of sustainability practices at major firms such as Wal-Mart, GE, DuPont, American Electric Power, and PepsiCo—and shows why companies such as BP and Hershey continue to fail
• Draws on Andy Savitz's 25 years of pioneering consulting and research in the field
• Includes all-new reporting and analysis on the practice of sustainability and the triple bottom line in business today, providing new insights on where sustainability is headed

The Triple Bottom Line is essential reading for any firm to meet the challenge of creating lasting value for both shareholders and society.

Part One
The Sustainability Imperative

Chapter 1
A Bitter Aftertaste: Hershey Struggles to Master the Sustainability Challenge

Utopia of Chocolate

Hershey is an iconic American brand. Founded as the Hershey Chocolate Company in 1894 by entrepreneur and philanthropist Milton S. Hershey, the Hershey Company (as it's now known) has come to be synonymous with chocolate in the minds of millions of consumers. Its classic brown-wrapped bar is almost as recognizable as the curvaceous Coke bottle. Today the company boasts annual revenues of over $6 billion, employs some fourteen thousand workers, and sells candies and confections under names that include not only Hershey itself but also Kit Kat, Twizzlers, Jolly Ranchers, and a growing array of “premium and artisan” chocolate brands.

Perhaps even more intriguing, Hershey has managed to expand into a global giant with operations in countries around the world and a growing presence in markets from China to Mexico, while steadfastly clinging to its image as a classic American company. At the heart of this image is Hershey's home base, the bucolic Pennsylvania town once called Derry Church but long since renamed in honor of the man and the company whose history dominates the community.

Indeed, Hershey, Pennsylvania, is much more than the home of a chocolate factory. It's a popular tourist attraction whose mission is to combine chocolate with family fun. On a typical summer day in Hershey, you'll find tourists strolling Chocolate Avenue, gawking at streetlights shaped like Hershey Kisses and shopping for candy-themed souvenirs at the dozens of gift shops. Bedazzled children and obliging parents can be seen lining up for tours of Hershey's Chocolate World and squealing with delight on the ten roller coasters at nearby Hersheypark, while those with more sedentary tastes relish a whipped cocoa bath or chocolate hydrotherapy at the Hotel Hershey's pricey spa, or simply savor the sweet aromas wafting from the factory.

All these pleasures have one thing that unites them even more than their chocolate flavor: the steady stream of income they produce for Hershey's twelve thousand residents, nearly all of whom have some connection to the company. It's a heartwarming image—a charming American city built on the heritage of a classic company and a product loved by almost every child—and plenty of adults.

Making the story even more charming is the history of the connection between the Hershey Company and the town it dominates. Their fates are closely entwined, and that's the way Milton S. Hershey wanted it.

The deeply religious Hershey, a member of the socially conservative Mennonite sect, wanted his wealth to be used “for a purpose of enduring good,” and he viewed his little Pennsylvania town as a utopian community, designed and managed for the good of all its inhabitants.¹

Hershey himself largely built the town in the early years of the twentieth century. Through his Hershey Improvement Company, he founded most of its leading institutions, including the local bank, department store, zoo, and public gardens modeled on those at the French royal court in Versailles. He laid out the bucolic street design, built a trolley company, and designed houses for factory workers and bigger houses for corporate executives. He even founded a community college that local residents and company employees could attend free of charge. During the Great Depression, despite a 50 percent drop in chocolate sales, he kept the workers from his factory busy building a hotel, a community center, a sports arena, and public schools—all, of course, bearing the Hershey name.

Milton also founded the Hershey Industrial School—now known as the Milton Hershey School—which today provides free room and board, clothing, medical care, and schooling for some eighteen hundred disadvantaged children. The charitable trust that Hershey created in 1909, which owns and operates the school, also owns or controls about 70 percent of the voting shares of the Hershey Company. As the company's website declares with justified pride, “Students of Milton Hershey School are direct beneficiaries of The Hershey Company's success.”²

Yet despite the noble intentions of Milton Hershey and the undoubted good the company has done, Hershey's once sugar-sweet reputation has turned increasingly bitter in recent years. Headlines about Hershey no longer focus solely on happy customers, enthralled tourists, or charitably sponsored schoolkids. Instead, the news about Hershey has centered on a series of embarrassing controversies that have put the company in a startlingly negative light.

The Dark Side of an Icon

Consider, for example, the rash of disturbing stories that hit the presses in August 2011—the height of the tourist season in Hershey—when some four hundred young foreign workers at a Hershey plant in Palmyra, Pennsylvania, staged a noisy walkout over their mistreatment by the company. The students had been brought to the United States from such countries as Costa Rica, China, Poland, Turkey, and Romania through the State Department's J-1 guest worker visa program. They'd been told, in the words of a recruiting brochure, “You will gain valuable work and life experience, expand your resume, improve your English, have opportunity to travel in the U.S., make great memories and form lasting relationships. No matter where you end up in the U.S., your Work and Travel Program is sure to be a summer you will never forget!”³

Sure enough, it was an unforgettable summer—but not in the way the students expected. Rather than experiencing American culture and making lifelong friendships, the students found themselves laboring in candy warehouses, packing and lifting fifty-pound boxes of Reese's Pieces, often on the 11 pm overnight shift. They earned so little that they couldn't even cover their grossly inflated living expenses—one group of six students was reportedly charged $2,400 per month to share a three-bedroom apartment normally rented for $970.

“There is no cultural exchange, none, none,” said one twenty-year-old Chinese student. “It is just work, work faster, work.” A Ukrainian student added, “All we can do is work and sleep.”

With the help of organizations including the National Guestworker Alliance and the Service Employees International Union, the students brought their plight to the attention of authorities—and the world. Officials at the Labor and State Departments promised to launch investigations. Making matters worse for Hershey, critics in the media were quick to link the apparent abuse of student workers to a broader picture of questionable labor practices by the company. In a scathing op-ed titled “America's Sweatshop Diplomacy,” Fordham University law professor Jennifer Gordon pointed out that the work done by the students had previously been handled by unionized Hershey workers earning between two and four times as much. Their jobs had been eliminated, their productivity replaced by that of unorganized workers who were easier to exploit. She called Hershey's use of low-wage foreign students “a microcosm of the downsizing and subcontracting that so many American companies have pursued during the past few decades in search of ever cheaper labor.”⁴

It's arguable that the negative spotlight on Hershey was somewhat unfair. As company spokespeople were quick to point out, Hershey had not hired the student workers directly. Hershey owns the Palmyra plant where they labored, but the facility was managed for Hershey by a logistics company called Exel. Exel, in turn, had outsourced its staffing to a vendor called SHS OnSite Solutions, which in turn recruited the student workers through a nonprofit organization known as Council for Educational Travel, USA (CETUSA). The glowing promises of “opportunity to travel” and “great memories” had come from CETUSA, not Hershey itself.

These mitigating factors are undeniable. But there's also no doubt in the public's mind that a company like Hershey is ultimately responsible for conditions in a factory it owns and profits from. Yet Hershey's only response to the revelations was a belated effort to pressure its labor suppliers to offer the student workers a week's vacation.

Subsequent investigations made it clear that the members of Hershey's shadowy chain of labor suppliers had behaved very badly. In February 2012, the Occupational Health and Safety Administration fined Exel for failing to report forty-two serious injuries between 2008 and 2011. And in November 2012, the federal government fined all three contractors $143,000 and ordered them to pay more than $213,000 in back pay to the foreign students.⁵

The H...

Table of contents

• Cover
• Table of Contents
• Praise for The Triple Bottom Line
• Title
• Copyright
• Dedication
• Introduction
• Part One: The Sustainability Imperative
• Part Two: How Sustainability Can Work for You
• Appendix: Creating a Sustainability Management System
• Acknowledgments
• About the Authors
• Back-of-Book Advertisements
• Index
• End User License Agreement