Surveys indicate that people are increasingly concerned about business practices leading to environmental problems and unsafe and unfair working conditions, and express a general preference for working for, as well as buying products from, firms that maintain higher environmental and ethical standards. Activist campaigns, and media and political attention focusing on critical environmental and humanitarian issues have placed growing pressure on firms to take action to address problems. Some firms have developed their own programs to address problems in communities in which they do business; some have adopted new codes of conduct or industry standards for responsible behavior; some have allied with certification and labeling programs – such as Fair Trade, Rainforest Alliance, and the Forest Stewardship Council – that can monitor environmental and labor practices in supply chains. Our research aims to assess the long-term viability and impact of these types of programs and initiatives. The key research questions include:
Producers: Do these initiatives improve social and environmental outcomes, and how do they affect costs and quality?
Employees: Do the initiatives improve employee performance and retention, and how do they affect costs of hiring?
Consumers: Do the initiatives improve sales, and are consumers willing to pay a premium for ethically certified products?
We have conducted (or are presently conducting) studies addressing these key questions in partnership with several large firms and non-governmental organizations operating in a variety of industries and countries.
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RELATED RESEARCH GROUP: Harvard-MIT Private Governance Research Group