公司如何對社會及環境友善 : 四間公司之比較 - 政大學術集成

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(1)國立政治大學商學院國際經營管理英語碩士學位學程 International MBA Program College of Commerce National Chengchi University. 碩士論文政治. 大. 立Master’s Thesis. ‧. ‧ 國. 學 sit. y. Nat. 公司如何對社會及環境友善:四間公司之比較 er. io. How can firms be socially and environmentally friendly? The. a. n. v l C of four corporations comparison ni hengchi U. Student: Fanny Coumau Advisor: Professor Carol Lin. 中華民國一 O 六年五月 May 2017.

(2) 公司如何對社會及環境友善:四間公司之比較 How can firms be socially and environmentally friendly? The comparison of four corporations. 研究生：高芬霓指導教授: 林月雲. Student: Fanny Coumau Advisor: Carol Lin. 政治大. 學. ‧ 國. 立. 國立政治大學. ‧. 商學院國際經營管理英語碩士學位學程碩士論文. sit. y. Nat. er. io. A Thesis. n. a l to International MBA Program Submitted iv n. C. NationalhChengchi i U e n g c hUniversity. in partial fulfillment of the Requirements for the degree of Master in Business Administration. 中華民國一 O 六年五月 May 2017.

(3) Acknowledgements. I would like to thank my supervisor, Carol Lin, who helped me grasp my ideas and gather them into a single topic. I also thank her for sharing with me her work on Ming Yung, as well as her knowledge about B-Corporations. I am grateful to the four companies that helped me understand better their operations, and especially Viola Chen (Ming Yung), Tom Yang and Ting Hung (DA.AI) and Bridge Liu (O’Right) who welcomed me in their offices. I also wish to. 治政 express deep appreciation to Ping Song Wu, my Taiwanese 大 friend who, thanks to his perfect 立 French, enabled the interviews at Ming Yung and O’Right to happen. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i. i n U. v.

(4) Abstract How can firms be socially and environmentally friendly? The comparison of four corporations By Fanny Coumau The role firms should play in the fight against depletion of natural resources and the. 政治大. shortcomings of their actions that affect people occupy a central position in the public debate.. 立. This paper argues that every firm, whatever its size, industry or country of origin can and should. ‧ 國. 學. integrate the environment and society as a whole in their decisions and in turn, use business as a source for good. In this paper, I first take a snapshot of the debate occurring between the main. ‧. actors at stake (consumers, governments and companies themselves). I then explain an existing. Nat. sit. y. program that intends to tackle the question of responsibility of businesses (B Corporations).. n. al. er. io. Afterwards, I compare four companies (2 B Corporations, 2 non B Corporations), and analyze. i n U. v. their actions through the 7S Model of McKinsey coupled with other relevant criteria. I conclude. Ch. engchi. with the argument that firms actually benefit from taking care of the environment and of people around them. Indeed, doing so increases employees’ loyalty and responsibility, boosts firms’ awareness through a green image, appeals to the will of customers to consume responsibly and encourages those who are not decided yet to do so. Furthermore, it allows businesses to undertake a sustainable approach that will not jeopardize the resources they need to be around in the future.. Keywords: environment, B Corporations, role of corporations, society, shared value. ii.

(5) TABLE OF CONTENTS. 1. Literature Review ................................................................................................................. 1. 1.1. The depletion of natural resources .................................................................................. 2. 1.2. Consumers becoming consumer-actors ........................................................................... 4 1.2.1. An existing solution: Sharing economy ................................................................. 5. 學. ‧ 國. 1.2.2.. 治政大 Degrowth: a possible solution? .............................................................................. 6 立. 1.3. The power of firms: Corporate Social Responsibility ..................................................... 8. ‧. 1.4. The role of governments in encouraging firms to be sustainable .................................. 11. y. Nat. n. al. er. io. sit. 2. Using business as a source for good: the case of B Corporations ................................... 13. i n U. v. 2.1. What are B Corporations?............................................................................................. 13. Ch. engchi. 2.2. The advantages of becoming a B Corporation .............................................................. 15. 3. Methodology ........................................................................................................................ 17. 4. Case-study/Comparison ..................................................................................................... 19. 4.1. Ming Yung ...................................................................................................................... 19 4.1.1. Description of the company and key demographics............................................. 19. iii.

(6) 4.1.2. Green Buildings .................................................................................................... 20 4.1.3. 7S Model .............................................................................................................. 20 4.1.4. Social Contribution ............................................................................................... 22 4.1.5. Economic benefits of being green and social ....................................................... 24 4.1.6. Other integrated initiatives ................................................................................... 25. 政治大. 4.1.7. Strategy for the future ........................................................................................... 25. 立. 4.1.8. B Corporation ....................................................................................................... 26. ‧ 國. 學. 4.2. DA.AI ............................................................................................................................. 27. ‧. 4.2.1. Description of the company and key demographics ............................................. 27. y. Nat. al. er. io. sit. 4.2.2. Green buildings .................................................................................................... 28. v. n. 4.2.3. 7S Model .............................................................................................................. 28. Ch. engchi. i n U. 4.2.4. Social contribution................................................................................................ 30 4.2.5. Economic benefits of being green and social ....................................................... 31 4.2.6. Strategy for the future ........................................................................................... 31 4.2.7. B Corporation ....................................................................................................... 32 4.3. O’Right .......................................................................................................................... 33 4.3.1. Description of the company and key demographics ............................................. 33. iv.

(7) 4.3.2. Green buildings .................................................................................................... 33 4.3.3. 7S Model .............................................................................................................. 34 4.3.4. Social contribution................................................................................................ 36 4.3.5. Economic benefits of being green and social ....................................................... 37 4.3.6. Other integrated initiatives ................................................................................... 37. 政治大. 4.3.7. Strategy for the future ........................................................................................... 38. 立. 4.3.8. B Corporation ....................................................................................................... 39. ‧ 國. 學. 4.4. Pocheco ......................................................................................................................... 40. ‧. 4.4.1. Description of the company and key demographics ............................................. 40. y. Nat. al. er. io. sit. 4.4.2. Green buildings .................................................................................................... 41. v. n. 4.4.3. 7S Model .............................................................................................................. 42. Ch. engchi. i n U. 4.4.4. Social contribution................................................................................................ 44 4.4.5. Economic benefits of being green and social ....................................................... 44 4.4.6. Other integrated initiatives ................................................................................... 45 4.4.7. Strategy for the future ........................................................................................... 45 4.4.8. B Corporation ....................................................................................................... 45. 5. Conclusion and recommendations .................................................................................... 50. v.

(8) References................................................................................................................................ 55. Appendix ................................................................................................................................. 60. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. vi. i n U. v.

(9) List of Tables Table 1 – Chart comparing the four companies based on the 7S Model of McKinsey and some additional criteria…………………………………………………………………………….46. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. vii. i n U. v.

(10) 1. Literature Review. Edward Freeman said “I think if Milton Friedman were alive today, I think he’d be a stakeholder theorist. I think he would understand that the only way of creating value for shareholders in today’s world is to pay attention to customers, suppliers, employees, communities and shareholders at the same time.” (Freeman, 2009). Knowing that our planet is in danger and that we use more resources in six months than the Earth can regenerate in a year closes the debate. 治政 between Shareholder theorists and Stakeholder theorists 大and brings everyone to the same 立 conclusion: if we want to keep living and continue to see businesses around us, they have to ‧ 國. 學. adapt to the new rules of the game being played. Several initiatives have been undertaken to. ‧. cope with the urge of changing our way of consuming, such as shared-economy, circular economy, or the de-growth movement. These initiatives come from consumers, governments,. y. Nat. er. io. sit. or even firms themselves, and force companies to adapt to this new scenery. In this literature review, I discuss about the various initiatives that have been undertaken by the most important. n. al. Ch. i n U. v. players in society in order to cope with climate change. It is necessary to understand that. engchi. everyone is concerned and that we can all make a change at our own level: there is no such thing as small gestures.. 1.

(11) 1.1. The depletion of natural resources. After World War II, where lives were limited to rationing and the fear of tomorrow, the period of the Glorious Thirty arose and was characterized by an improvement of the global economy as well as an upgrade of life conditions (Crafts and Toniolo, 2012). Europe was then formed and followed a consumer society, just as the US had started forty years before (David, 2008). During this period, companies held a quasi unlimited access to natural and fossil resources and. 政治大. caught up with the United States in terms of technology. This technology enabled companies to. 立. dig deeper into the Earth so as to extract fossil fuels as well as other non-renewable resources,. ‧ 國. 學. and ensured their competitive advantage over competitors (Bannon and Collier, 2003). Some people tried to raise the alarm bell, such as Rachel Carson in 1962 in her book Silent. ‧. Spring, where she warned her readers about the detrimental effects of the chemical industry. y. Nat. sit. releasing their pesticides in the environment (Carson, 1962); or some non-profit organizations. n. al. er. io. like Greenpeace in 1971, and the movement of Alter-globalization in the 1980’s. However, their. i n U. v. warnings were not listened to and society continued to expand indefinitely, going against the. Ch. engchi. well-being of our planet. Already in 1987 in the Brundtland Report, Gro Harlem Brundtland stressed the gravity of what our planet was undergoing: “The burning of fossil fuels puts into the atmosphere carbon dioxide, which is causing gradual global warming. This ‘greenhouse effect’ may by early next century have increased average global temperatures enough to shift agricultural production areas, raise sea levels to flood coastal cities, and disrupt national economies” (Brundtland, 1987). Moreover, it is in this report that she gave the very first definition of sustainable development: “a development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland, 1987). 2.

(12) Today, we are faced with global warming that is “very likely to be human-induced”, according to the NASA on its website on global climate change. The evidences are the rise of sea level that increased about 17 centimeters in the last century, the rise of global temperature, the warming of oceans (that have absorbed much of this increased heat), the shrink of ice sheets, the declining arctic sea ice, the glacial retreat, the increasing number of extreme events (such as record high temperature events, or intense rainfalls), among others, unfortunately (NASA website). Truth being told, consumers started to realize they had the power to take action and modify the path leading to our loss.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 3. i n U. v.

(13) 1.2. Consumers becoming consumer-actors. At the consumer-level, many actions can, and have been undertaken to cope with climate change. Some consumers reduce their meat consumption, purchase eco-friendly products and eat organic fruits and vegetables (Tobler, Visshchers and Siegrist, 2011). Some reduce their use of car and use their bike or public transportation instead. According to a survey conducted by Nielsen in 2014, “fifty-five percent of global online consumers across 60 countries say they are. 政治大. willing to pay more for products and services provided by companies that are committed to. 立. positive social and environmental impact”, and Millenials (ages ranging from 21 to 34). ‧ 國. 學. represent half of the global respondents (Nielson, 2014). There are three main antecedents of purchasing eco-friendly products, according to Barbarossa and De Pelsmacker in their article. ‧. Positive and Negative Antecedents of Purchasing Eco-Friendly Products (2014). The first one. y. Nat. sit. is the green self-identity: this refers to people who identify themselves as green consumers and. n. al. er. io. who buy organic food to a greater extent than those who do not (Sparks and Shepherd, 2002).. i n U. v. The second one is the moral obligation: “a personal internal state construct that is concerned. Ch. engchi. with the extent to which an individual feels a sense of responsibility to act morally when faced with an ethical situation” (Haines et al, 2008). The last one is universalism, which implies a broader concern for people and nature, such as the will to protect the environment. Whatever might be the reasons of such a change in consumption, consumers showed their will to go deeper into the protection of the Earth and several initiatives arose, such as sharing economy and the degrowth movement, that I will further explain.. 4.

(14) 1.2.1. An existing solution: Sharing economy. The same technology that enables companies to dig deep into the Earth and denude it from its natural resources allows the improvement of collective creativity and productivity in order to create new ways of consuming, such as sharing economy. According to a study conducted by PwC, “sharing economy allows individuals and groups to make money from underused assets, so that these physical assets are shared as services” (PwC, 2015). It started in 1995, when Ebay,. 政治大. the first collaborative platform, was created. It matches private sellers to private buyers. A few. 立. years later, in 1999, couchsurfing appeared, when an American student contacted other students. ‧ 國. 學. from Iceland in order to find a free housing for his holidays (Schor, 2014). However, it is in 2010 that Botsman and Rogers in their book “What’s Mine Is Yours: The Rise of Collaborative. ‧. Consumption” gave the term a new impetus, and especially when Bostman said during a Ted. Nat. sit. y. Talk in Sydney in 2010: “It is in 2008 that we hit the wall, when Mother Nature and the market. n. al. er. io. both said: “No more”. Now we rationally know that an economy built on hyper-consumption is. i n U. v. a Ponzi scheme. It's a house of cards. Yet, it's hard for us to individually know what to do”. Ch. engchi. (Botsman and Rogers, 2010). Nowadays, sharing economy exists in various sectors, such as in housing (with AirBnB for instance, where individuals rent their place to other individuals), transportation (with BlaBlaCar, where individuals pick up other individuals who make the same journey), food (with green public spaces in England, where people cultivate together fruits and vegetables and bring them home for free), equipment lending, bartering of clothes, the exchange of information (in education for example, with MOOCS that are free online courses), mutual aid between individuals, project financing (such as crowdfunding), local currencies, circular economy, and many more.. 5.

(15) 1.2.2. Degrowth: a possible solution?. Going further in the idea of a sharing economy, the degrowth movement recommends the intentional limiting and downscaling of the economy in order to make it consistent with the environment and biophysical boundaries (van den Bergh and Kallis, 2012). Hence, it suggests an equitable reduction of economic production and consumption so as to ensure that society’s throughput (resources and waste) stay within safe economic boundaries (Kallis, 2011;. 政治大. Schneider et al., 2010). It claims that development cannot be reduced to GDP, but that it serves. 立. higher-level, instrumental social values (Adkisson, 2009; van den Bergh and Kallis, 2012).. ‧ 國. 學. There has been a strong correlation between industrial growth and environmental damage and we came to realize that “efficiency and technological improvements alone cannot prevent. ‧. climate change, ecosystem destruction and resources depletion” (van den Bergh and Kallis,. y. Nat. sit. 2012). As an example, shrinking western economies due to the latest crisis led to a decline in. n. al. er. io. CO2 emissions (Friedlingstein et al., 2010), but “negative growth is socially unstable and. i n U. v. potentially catastrophic” (Jackson, 2009), so there is an urgent need to find an alternative. Ch. engchi. solution that would enable countries to be prosperous economically, while ensuring the right consumption of natural resources the Earth provides us. In this way, degrowth proposes a “prosperous way down” (Odum and Odum, 2001), that is a “socially sustainable economic degrowth” (Martinez-Alier, 2009). In order to implement such an economy, several policies need to be put in place: first of all, the establishment of global caps on key resources, such as oil and CO2 emissions, that would be shared equitably between nations on a per capita basis (Douthwaite, 2011). Second, reforms on working hours called “work-sharing” should take place: this refers to the reduction of working hours so as to allow the employment of more people, as well as the creation of jobs with low economic productivity but with high social value, such as 6.

(16) jobs in healthcare services, education, and local businesses (Jackson, 2009). Moreover, in order to implement a degrowth initiative, reforms aiming at strengthening the social-security system so as to buffer the negative effects induced by the remaining unemployment would be needed. This would be made possible thanks to a basic income provided by the state to all the citizens (Raventös, 2007), and a job-providing system, where the state would act as an employer during times of economic crisis (Lawn, 2009). These reforms imply a drastic redistribution of income, and hence a significant increase in taxes for citizens with higher incomes (de Mooij, 1999;. 政治大. Korten, 2009). Finally, further policies should be implemented to create alternative economic. 立. spaces existing outside the market economy (Latouche, 2009), where citizens produce social. ‧ 國. 學. “use value” rather than monetary “exchange value”: this could be possible with the creation of urban food gardens for people’s own consumption, co-housing projects where participants co-. ‧. invest sweat-equity (offering labour to restore or upkeep a property, and get interest in that. y. Nat. sit. property in return), or time-banks where participants exchange reciprocal services which use. n. al. er. io. units of time as currency (Carlsson, 2008; Ryan-Collins, 2009). Despite the fact that this. i n U. v. alternative has been heavily criticized - especially by Jakob and Edenhofer in 2014 in their. Ch. engchi. article “Green growth, degrowth and the commons”, because of the fact that degrowth adopts economic growth as a central concept whereas it should not be a goal in itself but should be assessed in terms of human well-being (regrouping consumption possibilities, environmental degradation, health, leisure etc…) (Jakob and Edenhofer, 2014) - the degrowth movement shows one of the various ways we can adopt to follow a responsible way of living.. 7.

(17) 1.3. The power of firms: Corporate Social Responsibility. Corporate Social Responsibility was born in the late 1930’s with the publication of Chester Barnard’s The Functions of the Executive, and Measurement of the Social Performance of Business by Theodore Kreps, but it is only in 1953 that Bowen gave its definition: “Those obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society” (Carroll,. 政治大. 1999). From then on, some businesses started to realize the harm they were causing to the planet. 立. and understood they had the power to make a difference. This awareness was seldom at the. ‧ 國. 學. beginning, but grew exponentially thanks to the growing awareness of consumers in parallel. Pioneers deeply believed businesses had to take the environment and society into account. This. ‧. is the case of Patagonia, the leader in the green apparel market. The company, founded in 1973,. y. Nat. sit. achieves the triple bottom line by being profitable, as well as environmentally and socially. n. al. er. io. friendly (Pongtratic, 2007). It puts the environment at the heart of its strategy: the company. i n U. v. uses recycled soda bottles to make the Synchilla jackets since 1993, and used 100% organic. Ch. engchi. cotton since 1996 (Patagonia website). Moreover, the company is committed to many environmental causes, such as the 1% for the Planet (the firm gives 1% of its sales, or 10% of their profit, depending on whichever is more to environmental groups) or the Common Threads Garment Recycling Program (where the company collects worn-out old Capilene-based layer garments from customers, so as to recycle them into new filament yarns to make new polyester fibers), and has various certifications that attest its reliability (LEED Certified buildings, FSC Certification to ensure products come from sustainable forests, Fair Trade Certified Apparel…) (Elks, 2013; Patagonia Website). This green attitude opens customers’ mind: 77% of consumers believe that companies should be doing more to contribute to society (Ipsos, 2013; Kang et al., 8.

(18) 2016). Furthermore, 73% of consumers across the 15 largest markets in the world will recommend companies that deliver on CSR (Reputation Institute, 2013). These figures led late adopters of CSR to understand that it was not a competitive advantage anymore but a must if they wanted to still be part of the corporate landscape. However, some companies thought they could mislead customers by doing green washing (“the integration of two corporate behaviors: poor environmental performance and positive communication about environmental performance” (Delmas and Burbano, 2011)), instead of real CSR. This is the case of Toys ‘R’Us:. 政治大. the company invites customers to buy the company’s branded reusable shopping bag and. 立. replaced their signature “R” by a recycle symbol, whereas they did not change the toxic paint. ‧ 國. 學. they are using, even after the toy recall in Europe and in the US because of the lead paint and cadmium that is dangerous for the kids (Knufken, 2010). Another example of green washing is. ‧. the promotion “It’s Easy Being Green” by Banana Republic, that requires using their reusable. Nat. sit. y. bag to get 10 percent off customers’ purchases. However, reusable shopping bags sold by. n. al. er. io. Banana Republic are made of conventional cotton that requires a lot of pesticides to produce,. i n U. v. and the company requires customers to buy a new bag to be part of the promotion, denying. Ch. engchi. smart eco-minded shoppers who brought their own (Knufken, 2010). On the other hand, some companies undertake environmentally or socially-friendly initiatives that are not related to their core business – this is better than nothing, but the scope of their actions is limited as they do not have the expertise in the actions they undertake: adapting their core business to socially and environmentally-friendly matters would make much more sense and affect the population and the planet much greatly. The most meaningful actions are undertaken by companies that really make an effort in integrating the environment and the people into the heart of their business. This is the case of DHL, the global market leader in the logistics industry. The company integrates the environment in its core business through the various principles and initiatives it 9.

(19) undertakes and the services it offers to its customers. Indeed, DHL follows two basic principles: “Burn less” which aims at reducing the energy consumption by renewal of air fleet, optimized aerodynamics for trucks, or intelligent lightning and control systems for building, and “Burn clean” to use alternative energy sources by using alternative fuels for aircrafts and vehicles, and natural resources for buildings (such as daylight and rainwater harvest for instance) (DHL, 2015). The company participates in various initiatives dealing with environmental issues such as Aireg (Aviation Initiative for Renewable Energy in Germany), the Business for Social. 政治大. Responsibility Clean Cargo Working Group, and Global Logistics Emissions Council (GLEC). 立. (DHL,2014). DHL also provides Green optimization services that are customized logistics. ‧ 國. 學. solutions that analyze every link of the customers’ supply chain, and follows a Circular Economy Principle to help customers improve their environment performance by optimizing. ‧. their consumption of natural resources and avoiding waste (DHL, 2015). Many companies. y. Nat. sit. adapt their business to be environmentally and socially-friendly, just like we saw with DHL and. n. al. er. io. Patagonia, whereas they are basic corporations: their primary aim is to maximize shareholder’s. i n U. v. profits. To support this trend, a new kind of corporations has been created that aims at creating. Ch. engchi. businesses as a force for good. These new entities are called B Corporations and are flourishing in the corporate landscape. We will go into more details about B Corporations in Section 2 (page 13).. 10.

(20) 1.4. The role of governments in encouraging firms to be sustainable. In parallel to customers and companies’ rising awareness, governments also came to realize that the Earth could not satisfy our ever-increasing needs and became major actors in fighting climate change. The first conference on Sustainable Development took place in Stockholm during the United Nation Conference on the Human Environment in 1972. This conference resulted in a declaration containing 26 principles concerning the environment and development. 政治大. as well as an action plan with 109 recommendations (Audiovisual Library of International Law. 立. website). In 1973, the European Union created the Environmental and Consumer Protection. ‧ 國. 學. Directorate and wrote the first Environmental Action Program. This undoubtedly led to agreements such as the Kyoto Protocol in 1992, or the Paris Agreement held in 2015, gathering. ‧. countries to agree on measures to reduce greenhouse gases emissions. The OECD (the. Nat. sit. y. Organization for Economic Co-Operation and Development) also drives change, by “giving. n. al. er. io. priority to R&D activities and incentives for the diffusion and adoption of green technologies”. i n U. v. (OECD website). For instance, the patent system in some countries has been accelerated to. Ch. engchi. encourage green investors, like it is the case in Brazil, Canada, Israel, Japan, the United Kingdom, Korea and the United States. Also, Germany undertook a Green Talent program that intends to “foster international exchanges among young researchers in the field of environmental and sustainability research" (OECD website). Another example is that Finland, Italy, Japan, Korea, the Netherlands, Norway, Poland and Spain adopted a green public procurement legislation: they use their purchasing power to buy environmentally friendly goods services and works, in order to make an important contribution to sustainable consumption and production (OECD website). The carbon tax is another incentive undertaken by governments: it is a fee paid by users of fossil 11.

(21) fuels for climate damage. This aims at encouraging people to reduce their consumption of fossil fuels and switch to renewable energies (World Bank website). As a last example, the “Prime Verte” put in place by the French Government is a subsidy distributed to individuals when they buy a car that does not consume diesel and that does not emit more than 60grams of CO2 per kilometer (Service-Public.fr). This incentive gives a competitive advantage to greener cars and hence helps indirectly their manufacturers. Through these numerous initiatives, governments give impulses to companies for them to see a clear advantage of becoming greener and allow. 政治大. them to be part of the change. In the USA, a corporation has the legal duty to maximize. 立. shareholder value and can be sued for undertaking actions that are environmentally-friendly. ‧ 國. 學. when they do not increase shareholder profits. That is why, in 2011, a new corporate entity form called the Benefit Corporation was created. This corporate entity form enables employees to. ‧. undertake initiatives that are socially and environmentally friendly, without necessarily. Nat. n. al. er. io. sit. y. maximizing shareholders’ value.. Ch. engchi. 12. i n U. v.

(22) 2. Using business as a source for good: the case of B Corporations. 2.1. What are B Corporations?. B Corporations are companies that use their power to solve social and environmental problems. B Corporations are certified by B Lab, created in 2006, with the aim of redefining success in business. The certification intents to gather companies willing to make a change and give them. 治政 a visibility in front of customers and investors. The companies 大 that undertake the questionnaire 立 are evaluated on three categories: their social and environmental standards, their transparency ‧ 國. 學. and their legal accountability. In parallel, B Lab looks at their supply chain, their employment. ‧. practices, their governance, and controls whether their actions are sustainable and based on sound ethics. The B Corp index is the world’s most widely used tool to assess a company’s. y. Nat. er. io. sit. overall positive social and environmental impact. It is free and confidential and helps companies measure, benchmark and improve their performance assessed over 20 areas of impact with more. n. al. Ch. i n U. v. than 200 metrics appropriate to the company’s industry, size and location. The minimum score. engchi. for a company to be certified as a B Corporation is 80 out of 200. The assessment criteria have matured since the very first draft. The first version started on an excel spreadsheet and synthetized the best practices of socially responsible businesses, mixed with some Global Reporting Initiative reporting standards. From then on, the criteria have kept evolving, especially thanks to the creation of the Independent Standards Advisory Council that took charge of the evolution of standards. Before this movement was created, companies who were trying to use their business as a source for good were limited in having an impact beyond their own business, as there was no collective voice.. 13.

(23) Moreover, the label acts as a standard that is very useful to the firm’s stakeholders. Indeed, nowadays, many companies claim to be green. Therefore, this characteristic becomes less and less meaningful. According to Jay Coen Gilbert, the co-founder of B Corporations, all the stakeholders need standards. Customers need them as a certification for good business, investors need them as ratings to make impact investment. Policymakers use them as tools to implement initiatives, such as the State of Philadelphia that implemented a tax break for Certified Sustainable Businesses, in 2009, and finally, companies need certifications to ensure. 政治大. their supply chain is sustainable. By acquiring the B-Corp certification, companies are legally. 立. obligated to consider the impact of their decision, not only on shareholders, but also on their. ‧ 國. 學. workforce, the surrounding community, suppliers, as well as the environment. Today, 2,048 companies (among which Ben & Jerry’s and Patagonia), from 130 industries, across 50. ‧. countries are certified B Corporations and work towards the common goal of doing business. y. Nat. n. al. Ch. engchi. 14. er. io. from $500 to $50,000 (B Corporation website).. sit. for good. In order to preserve their certifications, companies have to pay an annual fee ranging. i n U. v.

(24) 2.2. The advantages of becoming a B Corporation. On its website, B Lab states some reasons why a company would want to become a Bcorporation. First, it could be to lead a movement: Rose Marcario, the CEO of Patagonia, said “The B Corp movement is one of the most important of our lifetime, built on the simple fact that business impacts and serves more than just shareholders – it has an equal responsibility to the community and to the planet”. It could also be to pass legislation. Moreover, the B Corp. 政治大. assessment that companies undertake helps them benchmark their performance. Indeed, the. 立. index they receive can be compared to the index of other companies, as well as compared to. ‧ 國. 學. the index the company itself received before, and hence evaluate its improvement and the areas it can still enhance. The B Corporation movement also provides services to their member. ‧. companies, such as a free ERP software from NetSuite, or a free GIIRS (Global Impact. y. Nat. sit. Investing Rating System) rating and helps them save money. For instance, the company. n. al. er. io. BetterWorldBooks, an online for-profit bookseller that sells both new and used books, saved. i n U. v. $300,000 thanks to a discount on yearly CRM licenses, a discount on all credit card processing,. Ch. engchi. a promotional campaign held by the B Corp movement that generated about 500,000 new leads, as well as free ads in national B Corp magazines reaching 5 million readers. Another advantage of becoming a B Corporation, according to the website, is to protect the mission of the company. Indeed, once a company has been certified, sustainability is integrated into the DNA of the firm. Therefore, the mission can better survive new management, new investors and even new ownership. What is more, belonging to the B Corporation family enable companies to partner with peers. Furthermore, the B Corp certification helps companies differentiate from their competitors: according to a survey undertaken by BBMG, and available on the company’s website, 73% of 15.

(25) customers care about the company and not only about the product. Also, customers expect companies to prove they are sustainable, not only to assert it (B Corporation website). Additionally, the certification attracts investors. As Kevin Jones, the founder of Good Capital, a social venture capital firm, said “There is so little commonality among social ventures that we have to evaluate investments on an individual basis. But if we know it is a B Corporation, we already know a lot about the company and its values”. Entering the movement of B Corporations also generates press: B Lab advocates for B Corporations so that they get articles. 政治大. featured in the world’s top journals, such as Bloomberg Business week’s most promising Social. 立. Entrepreneurs, Inc 500/5000, and Good Magazine’s Good Co. Project. Likewise, B. ‧ 國. 學. Corporations attract and engage talents. Indeed, according to a study conducted by Harvard Business Review, Millennials (that is to say 50% of the global workforce), want a job that. ‧. connects with a higher purpose. What is more, Hewitt Associates found that companies with. y. Nat. sit. higher levels of employee commitment outperformed the stock market by almost 20% (B. n. al. er. io. Corporation website). Finally, B Corporations have the possibility to participate in ad. i n U. v. campaigns launched by the B Lab, such as the B The Change ad campaign, and hence get visibility.. Ch. engchi. 16.

(26) 3. Methodology. In order to demonstrate that every company whatever its size, its industry, or its country of origin, can and should be environmentally and socially friendly, I studied four different companies that integrate the environment and the well-being of people in their core business. Three of these companies are Taiwanese (Ming Yung, DA.AI and O’Right), and one is French (Pocheco). I deliberately chose two companies that have the B Corporation label and two that. 治政 do not have it, so as to compare their impacts and see their大 differences in terms of actions. While 立 in Taiwan for a double degree, I interviewed the three Taiwanese companies in person at their ‧ 國. 學. headquarters in Taipei, and contacted the French company by email. The interviews lasted. ‧. between 1 and 2 hours, and two of them (Ming Yung and O’Right) required me to bring a translator, as the interview was conducted in Chinese. I had the chance to visit the green. y. Nat. er. io. sit. buildings of O’Right for one hour, where the Strategic Director of the company showed me the different green initiatives they implemented to save energy (wind turbines, solar panels, water. n. al. Ch. i n U. v. recovery basin etc…), in addition to the one-hour-interview I conducted afterwards. Before. engchi. conducting the interviews, I created a chart with criteria coming from the B-Corporation questionnaire, as well as other criteria I deemed relevant for the research. These criteria belonged to various categories, such as demographics (turnover, number of employees, growth rate…), the values of the company, its social contribution as well as other integrated initiatives, whether it had green buildings, its strategy for the future, its awards and certifications, whether it communicates about its green and social performance, its salaries, whether it had economic benefits of being green and social, and a last part dedicated to the B Corporation label (if they heard about the label, if they have it or not, and why or why not).. 17.

(27) So as to fill in the chart I searched for information online. Then, with the information lacking, I created the questions for the interviews: the interviews were mostly the same, but some questions were differing depending on whether I had found the information online or not. However, more than just filling in quantitative boxes, the reason behind my will of conducting the interviews and meeting the creators of such businesses was to understand where they had gotten the idea of creating a social and green business, and the path leading to their success. After the interviews, I thought about organizing the answers in a way that would enable me to. 政治大. compare them. That is why I decided to use the 7S model from McKinsey, which provides a. 立. basis of comparison between the four companies, in addition to my other criteria that I deemed. ‧ 國. 學. useful to keep. Hence, as you will see below, I provide a detailed analysis of each company based on recurring criteria.. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. 18. i n U. v.

(28) 4. Case-study/Comparison. 4.1. Ming Yung. 4.1.1. Description of the company and key demographics. Founded in 2008, Ming Yung is a chain of Japanese food restaurants belonging to the family of. 治政 B Corporations. The company finds its foundations on the 大values of serving the underprivileged 立 and helping the community. Through its 18 stores, 80% of the 200 employees come from ‧ 國. 學. underprivileged families. Bo Yung, the CEO, wants to help them become financially. ‧. independent with a stable job and hence bring their families out of poverty (Lin, 2017). Bo Yung encountered many misadventures to create his business but he finally succeeded thanks. y. Nat. er. io. sit. to the generosity of a few people he met; that is the reason why he wants to help people back and share the benevolence he received gracefully. The company is doing well: it multiplied its. n. al. Ch. i n U. v. turnover by 5 in two years, reaching 4 million US dollars in 2015. The company is considered. engchi. as a real help to society thanks to the free meals it provides, as well as the 200 charity programs it participates in. The company received the B-score of 162, the highest score in the Asia Pacific Region of B Lab applications.. 19.

(29) 4.1.2. Green Buildings. As an architect in the first place, Bo Yung wanted to bring an environmental dimension to his social business and built his restaurants with green building materials. The company makes great economies with the energy it saves thanks to the network of the CEO in the field of green urbanism: they got cheaper-than-the-market green materials and saved money in architect fees. Moreover, Ming Yung is a group comprising the chain of restaurants but also an architecture. 政治大. business. This latter helped the creation of buildings for the restaurants, enabling the company. 立. to benefit from complementary skills and competences of both businesses.. ‧ 國. 學. 4.1.3. 7S Model. ‧ y. Nat. sit. The aim of Ming Yung is to take care of the underserved and to serve the community. They also. n. al. er. io. engage in talent cultivation by hiring unskilled workers and training them for the job. The key. i n U. v. values of the company are benevolence and sharing the good around. Ming Yung provides. Ch. engchi. healthy food at a reasonable price. They aim at serving social good by hiring under privileged people and offering free meals to those in need. In addition, they create a handicap friendly environment by adapting the layout of their kitchen to the needs of their disabled employees, with a wheelchair-friendly store design and kitchen seats equipped with auto-motion. The Japanese food chain counts 18 restaurants that are mostly located in shopping malls. Ming Yung is a group comprising the restaurant chain, the architecture firm Bo Yung created, as well as the Happy Food Company, an online bakery selling pineapple cake ran by Bo Yung’s sister. The structure of Ming Yung is rather flat, with 3 layers: one is the management (i.e. the head of the company), the second one comprises the restaurant managers, and the last layer is the workers 20.

(30) (the cooks and waiters). The firm regularly donates small amount of money to the Taiwan Fund for Children and Families, as a way to thank them for helping him when he needed. As mentioned above, 80% of the workers are unskilled, that is why the company put in place a elearning platform that is available to all the employees. The staff can find on it how to perform some important tasks, such as how to prepare a fish for instance. The management aimed at finding a creative and interactive way to train their employees. Watching videos is part of their daily life and combining fun and work is the solution they selected. Moreover, a high share of. 政治大. employees working at Ming Yung have been referred to the company by non-profit. 立. organizations or social agencies. Ming Yung wants to favor local hiring as much as possible.. ‧ 國. 學. Furthermore, the CEO trains his employees and suppliers to save energy and food in their daily working activities, supports local purchases and suppliers labelled with ISO 14001, 14064-1. ‧. and 14067 certificates. Finally, the company implemented a performant MIS system, including. y. Nat. sit. ERP and POS systems so as to facilitate information exchange, recording, management and. n. al. er. io. governance, and that enables the company to be paperless. Most of Ming Yung’s workers come. i n U. v. from under privileged and poor families and have been referred to the company by non-profit. Ch. engchi. organizations and social agencies. Some of the employees are physically and mentally disabled and Ming Yung has now expanded its hiring process by employing silver age people. 80% of the workers at Ming Yung have not been hired for their cooking nor service skills, but demonstrated a potential that could make them become valuable workers with undeniable competences. The company ensures this switch thanks to the platform they put in place, that I mentioned above. Moreover, Ming Yung encourages employee enrichment through the job rotation it suggests: employees can then work for the restaurant and then switch to the architecture firm, and gain additional competencies. Furthermore, the staff is trained to recognize people who need assistance (further than just a free meal), and are responsible for 21.

(31) contacting a social agency that will provide complementary assistance to the person in need. By increasing their staff’s social responsibility, the company encourages them to increase their awareness of people surrounding them and giving them the chance to change their standpoint: from people who need help, to people helping. The management of Ming Yung engages in an effort to create a home atmosphere for its employees: the restaurant managers are asked to pay attention to the less privileged employees to compensate their missing family love. Also, employee performance is not the most important goal for the company. Instead, close. 政治大. collaboration among employees is more valued, as well as the acceptation of the others who are. 立. seen as different than the majority. Moreover, Ming Yung’s management respects their. ‧ 國. 學. employees in that they do not communicate about their disabilities. They want to ensure customers do not label them but consider them as any other restaurant employees.. ‧ y. Nat. io. n. al. sit. Social Contribution. er. 4.1.4.. i n U. v. First of all, Ming Yung enables job opportunity creation especially for the deprived people.. Ch. engchi. They provide a job for unskilled and under privileged people with the aim of pulling them out of poverty by giving them the chance to be trained, while enjoying a social life. The company also gives free meals to people who consider themselves as poor. Indeed, a person can come and order a meal “ready to be consumed”. The staff will not check whether the customers have the financial means to pay for the meal as they do not want to betray customer privacy. However, so as to have an idea of how many free meals they provide, customers have the possibility to sign their name when benefiting from a free meal but that is not mandatory. Ming Yung believes the number of them adds up to 20,000 every month. The firm also works in collaboration with Jia Fu Zhong Xin, a non-profit organization that assists the under privileged. Whenever the 22.

(32) NPO finds someone who needs a free meal, they send them to Ming Yung, and whenever Ming Yung receives a customer who seems to need further assistance, they contact Jia Fu Zhong Xin. Furthermore, the company provides two free meals per day to its employees coming from Ming Yung’s kitchen, or sometimes from another restaurant to enable employees to enjoy a different kind of food.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 23. i n U. v.

(33) 4.1.5.. Economic benefits of being green and social. Ming Yung saves money by being eco-friendly. Indeed, thanks to the green architecture background of the CEO, the implementation of the green buildings has been cheaper for the firm, as mentioned in the section 4.1.2. Hence, the company benefits from being green thanks to the money they save by saving energy. In social terms, the company does not make more money per se. Indeed, the salaries it pays are a little higher than the Taiwanese market, even. 政治大. though the employees are disabled or unskilled. Also, the company does not benefit from a. 立. regular base of customers who come to support Ming Yung’s values. Why? Simply because the. ‧ 國. 學. firm does not advertise on the fact that they are green nor social. In fact, they do not want to label their employees as underprivileged so that they do not feel downplayed or inferior, but. ‧. they also do not want to get the pity from their customers. The CEO and his wife, contrary to. y. Nat. sit. some NPO in Taiwan that sell hand-craft products made and sold by disabled people and that. n. al. er. io. have the clear image of being social, want to have a modern image for their restaurants. That is. i n U. v. also the reason why Ming Yung does not get any advantages when concurring to a tender: the. Ch. engchi. firm mostly opens new restaurants in shopping centers where competition is fierce with wellknown restaurants that are already settled and that are famous for their good service of their good cuisine. Ming Yung must climb its way as any other food business. The firm only talks about the real core of their business when attending B-Corporation meetings. Knowing this, we can say that Ming Yung is genuinely and intrinsically good.. 24.

(34) 4.1.6.. Other integrated initiatives. Ming Yung undertakes social initiatives that make the business even more valuable. First of all, the CEO created an emergency fund in case his employees encounter a family crisis. This ensures he will be able to help his employees in case they have a problem. Also, in addition to their salaries, employees receive 30% of the firm’s net income. Moreover, Ming Yung has been part of over 200 charity programs between 2009 and 2016, each of them having an educational. 政治大. purpose (such as table manner or cultural activities). Half of them have been initiated by Ming. 立. Yung’s employees during their office hours, while the other half is supported by the firm’s. ‧ 國. 學. donation to outside programs. Through these charity programs, the CEO engages his employees in the core business by making them actors and not mere followers. He believes that they will. ‧. flourish by taking the lead of projects and that the business will eventually benefit, with. y. Nat. sit. employees being more committed to their job. Ming Yung also supports local orphanages and. n. al. er. io. nursing homes by sending them rice (directly from the vendor) when they run out of it, and. i n U. v. ensures stable vegetable prices by ordering from local and small farmers and absorb their production surplus.. 4.1.7.. Ch. engchi. Strategy for the future. The company plans to stop opening new restaurants for one or two years and rather focus on improving the service in store. Afterwards, the management would like to open a chain of restaurants in Cambodia so as to fight child prostitution with the same business model practiced in Taiwan. This is still a project that is not yet concrete as the firm first wants to focus on their Taiwanese businesses, but we might hear about such a project soon. 25.

(35) 4.1.8.. B Corporation. Ming Yung has been certified B Corporation in March 2016. The CEO and his wife first heard about the label when participating in a conference by FoodCloud (a company that helps businesses source the food they use so as to ensure food traceability). Whereas the CEO did not know about it, his wife had already heard such a label existed when she was studying sociology. Consequently, they decided to go to an event organized by B Corporation: they got along with. 政治大. the other members and realized they shared similar values. Therefore, they decided to fill in the. 立. questionnaire and apply for the B Corporation label. The process lasted 2 months and 10 days,. ‧ 國. 學. which is very fast. As all the questions were in English and that they are not familiar with the language, they were helped by a Taiwanese they met at a B Corporation conference. On the 11th. ‧. of January 2016, they filled in the questionnaire in a few hours. On the next day, they received. y. Nat. sit. the confirmation from the B-Lab that they did receive their application. The company received. n. al. er. io. a call from the B-Lab on the 28th of January so as to understand the process and for a month,. i n U. v. the company kept sending documents attesting their social programs, the rules of the company,. Ch. engchi. how they use their profits, who their suppliers are, some information about their employees, their balance sheet and income statement and many, many more. On the 22nd of March 2016, Ming Yung received the label. As a coincidence, two days later, there was the first B Corporation conference in Asia. After receiving the label, a member of the B-Lab visited one of the restaurants, but the management did not know who, when or where that person went to. Ming Yung feels a real sense of belonging to the B Corporation family and realized it can have more impact on society than what it currently has. The firm enjoys participating in B Corporation meetings once a month where they get more ideas about how they could improve and what they can do and share their experience to the other members. They now want to raise 26.

(36) awareness about the label and about ecology to their employees and to their suppliers. Thanks to the label, Bo Yang was invited to the Global Entrepreneurship Summit by President Obama, in Silicon Valley, USA. This increased the company’s awareness and prestige, and rewarded the CEO and his wife for their efforts and encouraged them to follow the same track.. 4.2. DA.AI. 政治大. 4.2.1. Description of the company and key demographics. 立. ‧ 國. 學. DA.AI is a non-profit organization certified B Corporation, and launched in 2008. It is the first non-profit company dedicated to the production of eco-products and one the world’s first non-. ‧. profit companies to donate 100% of its profits to charity. It was created by 5 entrepreneurs who. y. Nat. sit. were volunteering at the Tzu Chi Foundation and who had the idea of making products out of. n. al. er. io. the plastic bottles they were collecting. As one of them was working in the textile industry, they. i n U. v. thought about creating eco-friendly textile products. Today, the company employs 100 people. Ch. engchi. and has a revenue of $9 million annually. The company recycles PET bottles and transforms them into eco-products such as clothing, beddings and other everyday textile products. It aims at lowering the amount of trash per year (Taiwan produces 5.86 million tons of trash per year), as well as reducing the consumption of natural resources. The organization works hand in hand with the Tzu Chi Foundation, which is a worldwide network organization that has non-profit businesses in many industries (cafés, hospitals, schools…). Tzu Chi environmental volunteers collect the PET bottles and break them down into the cleanest raw materials, certified with Green Mark by quality control. These are then sent to the Tzu Chi recycling stations located all over in Taiwan (more than 8500), where volunteers tear down caps and neck rings of every 27.

(37) bottle, stump the bottles flat, and send them to mills to be cut into flakes, granulated into chips and snagged into fibers. These raw materials coming from recycled plastic bottles make up half of the raw materials for the final eco-products. The project collects about 2,000 tons of trash per year. DA.AI gives all its profits coming from the sale of the eco-friendly products and from its investments to the Tzu Chi Foundation to help the underprivileged.. 4.2.2. Green buildings. 立. 政治大. DA.AI, despite engaging in a recycling business, does not have green buildings. In fact, their. ‧ 國. 學. only building is their headquarters. They do not own the factories that recycle PET bottles but subcontract the job to other companies. However, dealing with bottles that are being recycled. ‧. releases less CO2 than conventional manufacturing, and hence can be considered as a green. sit. n. al. er. io 4.2.3. 7S Model. y. Nat. benefit.. Ch. engchi. i n U. v. DA.AI follows the Tzu Chi spirit and humanitarianism, as well as the concept of Master Cheng Yen that aims at: “Turning waste into gold, gold into love, love into a purifying force and surround the globe with it”, or in other words, at coexisting with the Earth. According to their website, their target is “To achieve a sustainable zero-waste Cradle to Cradle (C2C) manufacturing closed-loop process” with an ultimate goal of “encouraging and inspiring more businesses, organizations, industry leaders and the general public to join our efforts in cherishing and protecting our Mother Earth and giving back to society”. DA.AI’s strategy is to appeal to eco-friendly and socially concerned people, who are willing to buy eco-textile 28.

(38) products at a price higher than the market. They target Tzu Chi volunteers all around the world by creating products that will match their needs, as well as environmentally and socially friendly people who would like to contribute in making the world a better place. DA.AI is quite creative is terms of structure: the general managers are volunteers, so they do not earn any money from their job in the company. Then, next to the employees working on the support activities as in most companies, DA.AI works with around 60 partners may they be designers, photographers etc… who help the company advertise its products properly and increase its. 政治大. brand awareness. DA.AI calls this structure a platform, where everyone who wants to help the. 立. Earth can. Furthermore, as mentioned previously, the company does not own any factory but. ‧ 國. 學. deals with subcontractors who transform the PET bottles into raw materials and then into textile. Hence, DA.AI buys the PET bottles at the various environmental stations owned by Tzu Chi. ‧. Foundation and subcontracts their transformation into eco-products to independent companies.. y. Nat. sit. DA.AI uses a system that calculates the CO2 the company saved by using recycled bottles as. n. al. er. io. raw materials. DA.AI’s production process is certified by the Global Recycling Standard given. i n U. v. by the Netherland’s Peterson Control Union. Also, the eco-friendly fleece blanket it. Ch. engchi. manufactures, made with 100% recycled polyester, has been certified by the Carbon Footprint Certifications from both Germany’s TUV Rheinland and the EPA (Environmental Protection Agency). Finally, DA.AI assesses the companies with whom it works: it was accredited both ISO9001 and ISO14001 for quality management and environmental management systems. The firm is surrounded by skilled workers who all share the same values of protecting the environment. They are all experts in their own fields: DA.AI works with photographers, designers, business developers etc… Moreover, DA.AI is supported by Tzu Chi volunteers: they are 86,000 in Taiwan and many more are helping the association all around the world.. 29.

(39) Furthermore, innovation is a major skill of the firm. Indeed, they create ingenious materials that aim at improving local people’s lives, such as the eco-emergency backpack that helps people evacuate when they encounter a man-made or natural disaster (the bag can contain up to 3 days of basic food and water for one person as well as some necessary products such as cash, blankets, flashlight and so on), and the eco-puncture proof shoes. The fact that the general managers are volunteers attests the benevolent spirit of the company.. 4.2.4.. Social contribution. 立. 政治大. ‧ 國. 學. DA.AI distributes 100% of its profits to the Tzu Chi Foundation that helps the under privileged in various countries in the world. Since the foundation of the Tzu Chi Foundation in 1990, it. ‧. has helped 90 countries. As an indicator, the foundation provided 36 countries with 960,000. y. Nat. sit. blankets for victims of flood or dramatic events. By selling their eco-products to Tzu Chi. n. al. er. io. volunteers present in various countries, DA.AI contributes to the social improvement of these.. i n U. v. For instance, the companies manufactured and sold shoes surrounded by a waterproof cover,. Ch. engchi. that enables people to walk around in their countries during floods. DA.AI also created a flashlight cap which is both useful in Nepal to enable doctors to look deep into their patient’s throat, and in North Korea to enable people to have light after 10pm, when the government shuts electricity off.. 30.

(40) 4.2.5.. Economic benefits of being green and social. As DA.AI managers told me during the interview, it is more expensive to use recycled plastic bottles as raw materials than normal raw materials. Hence, so as to compensate these higher costs, the company charges higher prices. Moreover, according to Mr. Yang, the Business Developer of DA.AI, “being green is only valuable to people who are green”. Therefore, their green and social business only constitutes a competitive advantage to people to whom that. 政治大. matters (but this is true for every other businesses). Consequently, being green does not. 立. constitute a real competitive advantage for DA.AI over its industry competitors. Furthermore,. ‧ 國. 學. the difficulty encountered by DA.AI is the fact that they have no matching competitors in Taiwan, so it is not easy for them to market and price their products. Also, the culture in Taiwan. ‧. is to buy cheap clothes at the night markets and even though some customers feel concerned. y. Nat. sit. about saving the planet, most of them are not willing to change their consumption habits.. n. al. er. io. Despite these concerns and the economic disadvantage of being green for the company, the non-. i n U. v. financial advantages are so great that they overcome the rest, like opening the mind of people. Ch. engchi. to save the planet and encouraging people to do the good around them.. 4.2.6.. Strategy for the future. When asked about their possible expansion into other markets, Mr. Yang, the person in charge of Business Development at DA.AI answered that “there is still a lot to do in Taiwan”. Indeed, despite the fact that Taiwan is the 3rd largest recycling country (after Austria and Germany), with 65% of its plastic bottles being recycled, The Tzu Chi Foundation recycles 3% of Taiwan’s plastic bottles and DA.AI only uses 1/3 of them to manufacture their eco-products. Furthermore, 31.

(41) Taiwan has expertise in the textile industry which constitutes a competitive advantage for the country. It is therefore meaningless to ask other countries to create their own clothes when they do not have the expertise in doing so. That is why DA.AI, instead of telling people to elaborate such a business abroad, tells foreigners to “encourage their community and their country to recycle more”. Tzu Chi volunteers who pick up plastic bottles all over the world not only educate their own community in being more eco-friendly but act as a model for Australia, Malaysia, Philippines, Thailand…. B Corporation. 立. 學. ‧ 國. 4.2.7.. 政治大. DA.AI has been certified B Corporation in May 2016, thanks to one of the employees who. ‧. accidentally saw online what B Corporation was about. The process lasted 6 months. One of. y. Nat. sit. the reasons why they wanted to be part of this association was to learn about their weaknesses. n. al. er. io. and improve themselves. However, they do not find any concrete advantage of being a B. i n U. v. Corporation, and are not aware of the monthly meetings where B Corporation-labelled. Ch. engchi. companies meet to share their experience and come-up with new ideas to make the world a better place. Contrary to the contentment of Viola Chen (Ming Yung) for the effort of B Lab to create a community of firms that use business as a source for good, DA.AI is clear missing out. Hence, I suggested them to contact Chloe Huang formerly working at the IMBA office of the National Chengchi University, and now Secretary of B Lab in Taiwan. Through this contact, they can be aware of the meetings and other conferences that would enable them to get the best out of the B Corporation certification.. 32.

(42) 4.3. O’Right. 4.3.1. Description of the company and key demographics. Steven Ko launched O’Right in 2002, a Taiwanese company that produces and sells healthy and eco-friendly haircare products. Because of his allergic constitution, Stephen Ko looked for natural ingredients that would improve his daily life as well as the one of many others, while. 政治大. taking care of the planet. The mission statement of the company is “It’s O’right”, with the letter. 立. O representing the Earth, and the will to do things that are “all right” for the environment.. ‧ 國. 學. The company produces the world’s greenest shampoo and do not resort to animal testing to create new formulas. According to them “a product is truly green only when it respects all kinds. ‧. of nature”. O’Right sells 90 products across markets such Asia, America, Europe and Oceania. y. Nat. sit. (30% of the products are sold abroad), and launched a green hair care e-commerce brand, Shan,. n. al. er. io. that sells 24 natural products (shampoo, conditioner, styling, body wash). The company. i n U. v. employs 235 people, has a revenue of $10million USD and enjoys a growth rate of 20% per year.. Ch. engchi. 4.3.2. Green buildings. The company believes in producing eco-friendly products in an eco-friendly environment: it built the first GMP (Good Manufacturing Practice) certified green cosmetics plant in Asia, aiming at “creating a healthy and comfortable environment where humans, architecture and nature can coexist” (CSR Report, 2015). The building is equipped with a solar and wind power generation system that generates clean power for the manufacturing of products; it has a Process 33.

(43) Cooling Water System that makes the whole manufacturing process more energy-saving, low carbon and hence eco-friendly; and benefits from three water recycling systems that use rainwater, water from pre-production filtration process as well as post-production water for daily water consumption, air-conditioning, irrigation etc… Thanks to these implementations, the building achieves 7 out of 9 major green building indicators set up by the Taiwanese Ministry of Interior. The building is also equipped with eco-friendly installations to encourage green practices, such as a mechanical foot pedal faucets, full-length windows and LED light. 政治大. fixtures. The company won many awards and has been labelled with various certifications, such. 立. as the Taiwan EEWH Green Building Gold Certificate, or the ISO 14001 Environmental. ‧ 國. 學. Management Systems.. ‧. 4.3.3. 7S Model. sit. y. Nat. n. al. er. io. In this part, I will not mention O’Right’s structure as I was asked by the managers to keep it. i n U. v. confidential. O’Right promotes a green lifestyle that intents to create a harmonious relationship. Ch. engchi. among Heaven, the Earth and Humans. The company’s mission is “love and care, now and forever” (according to their website). O’Right positions itself as the world’s greenest shampoo that is “healthy for the human body, healthy for the society and healthy for the environment” (O’Right website). Through this image, the company strives to create deep and profound values for its products and hence encourage people to adopt a green lifestyle. One of their main invention is the tree in the bottle: it is a bottle made from biodegradable materials such as fruit and vegetable starch that can be naturally degraded when buried in the soil. Taiwanese acacia seeds are placed at the bottom of the bottle (acacia trees species are the most efficient at sequestering and storing carbon from the atmosphere in Taiwan). This constitutes a clear 34.

(44) competitive advantage for the company that positions itself as the leader in innovation in terms of packaging and product content. The firm has three independent research laboratories: Natural Formula Development Lab, Taiwan Agricultural Product Extraction Lab and Natural Extract Assessment Lab. These research laboratories enable the company to be competitive in terms of innovation and ensure the firm delivers eco-friendly and healthy products to its customers. For their green packaging, the firm follows the 5R’s of O’Right that are the five essential components of their green brand: Reduce, Reuse, Recycle, Replace, Responsibility This helps. 政治大. them develop recyclable, reusable and biodegradable green packaging materials. Moreover, all. 立. the products during the development process undergo 15 tests, such as stability, heat resistance,. ‧ 國. 學. packaging compatibility etc. Furthermore, semi-finished products must meet the requirements of Cosmetics GMP and undergo six tests, such as physical and chemical analysis, total plate. ‧. count and pure water quality. The company does not call on animal testing to develop their. y. Nat. sit. products. They believe in the respect of all kinds of lives and quote Gandhi on their website:. n. al. er. io. “The greatness of a nation and its moral progress can be judged by the way its animals are. i n U. v. treated”. In addition to their green products and green headquarters, O’Right has adopted green. Ch. engchi. logistics: they use a carbon-free centralized delivery system since 2010 and raised the cost of minimum orders to NT$3,970 (US$131) in 2015 (so as to avoid delivery trucks that are not entirely full). They also deal with delivery companies that use hybrid electric delivery trucks equipped with GPS navigation to optimize the route by time or distance, which is energy-saving. Finally, the firm makes green investments: they have invested NT$140 million (US$4.6 million) in energy-saving facilities, waste treatment facilities, advanced extraction devices etc., since the establishment of their green headquarters. Since 2014, the company spent over NT$30 million (US$1 million) on product research and development, laboratory renovations, environmental activities, environmental maintenance and CSR report verifications. The firm 35.

(45) believes that even though these are costly, they are “worth every penny”. The staff of O’Right comprises 70% female. The company explains this number by the fact that the hair care products they sell mostly targets a female audience. Moreover, the company saw its number of employees increase tremendously: the 167 employees in 2012 went up to 235 in 2017. O’Right’s employees have diverse skills: as the company sells products, employees are required to have skills in marketing, design, finance, accounting… However, what makes O’Right so successful are the laboratory technologists who develop the products and their packaging.. 政治大. Research and Development is also a tremendous advantage for the firm that uses cutting-edge. 立. technology. The company enjoys a democratic leadership style. All the employees work in the. ‧ 國. 學. same open space. Only the top management benefits from cubicles, that are also inside the open area. The management aims at bringing the employees together, and provide free local fruits. ‧. and vegetables for lunch that employees prepare alternatively. Employees hence gather and. Nat. al Social contribution n. 4.3.4.. er. io. sit. y. share the same meal which contributes to the enrichment of the company’s culture.. Ch. engchi. i n U. v. O’Right engages in three main activities in terms of social contribution: first of all, they contribute to the awareness of people about the environmental protection: for 5 years, the firm has co-organized the Earth Hour event in Taiwan with the Society of Wilderness (SOW). About 4,000 hair salons and 10,000 hairstylists took part in the event, which saved 300,000 kW/h, meaning a reduction of 184,000 kg of carbon emissions, from 2011 to 2014. Secondly, the company supports associations for the forest conservation and reforestation: since 2011, O’Right takes part in the 20-year Forestation Project with National Taiwan University Experimental Forest. In 2015, the company helped reduce 12,760kg of carbon emissions by 36.