Shopping for the 'Right' Reasons

Indebted, their credit cards nearly maxed out, Patrick and Darleen Clements felt they were staring at financial ruin seven years ago.

Today, they've cleaned up their financial mess by transforming the way they spend.

They've become ethical consumers, people who buy only products from companies they believe in.

The Clements push the idea to extremes.

They shop at organic food stores, never purchase anything from China (because of its poor human rights record), and their furniture greenbacks go to companies they believe engage in sustainable forest practices.

Last fall, they gave up their car and now rely exclusively on Seattle's public transportation.

"We have this feeling that we can buy anything we want," Ms. Clements says. "The difference is that instead of going for more, more, more, we're buying only things that we love, things that we really want to be part of our lives."

Ethical shopping - whether in extremes or moderation - has become part of a larger cultural shift, demographers say.

"People are changing their values and their lifestyles and their world view all at once," says Paul Ray, executive vice president of American LIVES, a San Francisco-based market research and opinion polling company.

The newest group of consumers - which he calls "cultural creatives" - is idealistic, altruistic, and interested in spirituality, global affairs, and preserving the environment.

They include conservatives as well as liberals, men, and, predominantly, women.

Too small to measure in the 1960s, "cultural creatives" now number some 44 million adult Americans and are growing rapidly.

These Americans put their values into practice at the checkout line, using their dollars to back their causes.

"How you spend your money really is a statement of what you believe in," says Jennifer Schuster, a Minneapolis public-health worker who supports neighborhoods by patronizing locally owned stores rather than national chains.

And companies are listening, sort of.

"Companies are increasingly paying attention to the needs and concerns of all of their stakeholders," says Elissa Sheridan of Business for Social Responsibility in San Francisco. Many of them now make public their environmental, hiring, and contracting practices in the United States and abroad.

"Corporations over the last 10 years have become aware that a substantial portion of the consumer market does want this information," says Steven Lydenberg, a pioneer in ethical shopping and research director at KLD, a Cambridge, Mass., firm that researches socially conscious investing.

The group best known for spotlighting ethical companies is the Council on Economic Priorities. The New York-based group has, for nine years, published shopping guides that rate companies' ethical performance.

Its latest "Corporate Report Card," rates 250 companies in eight categories, giving them a letter grade for each category.

McDonald's, for one, rates a "B" for environmental policies but an "F" for women's advancement because in 1996 (the data used in the report), only one woman sat on the company's 19-member board. Phone calls to the company were not returned.

On the other hand, PepsiCo (which owns Taco Bell) was one of two-dozen companies that made the council's honor roll.

It got a "B" for environment but an "A" in women's advancement. A woman sits on its 13-member board and women figure prominently among top corporate officers and highest-paid employees. The soft-drink maker pulled an "A" or "B" in all the other categories as well.

"Companies that really strive to be good in a couple of areas tend to be good across the board," says Tom Knowlton, the group's chief operating officer. "It's really a corporate culture that permeates the company."

Of course, rating a company's "goodness" depends on whose yardstick you use.

For example, several human-rights groups oppose China's occupation of Tibet and its human-rights violations.

To support the effort, ethical-consumer group Co-op America urges consumers to boycott Chinese toys. It lists non-Chinese toy manufacturers on its Web site (www.coopamerica.org).

But some economists argue that such third world boycotts aren't ethical at all. "Thinking that you're doing a lot of good by washing your hands of the world is pretty short-sighted," says Brink Lindsey, senior fellow at the conservative Cato Institute in Washington, D.C. Boycotts simply make the common people worse off, he says.

Trade, however, creates a middle class in third world countries, and its citizens usually demand political reforms, he argues. Economic growth helped bring reform to Indonesia, for example, but not China.

Even proponents of ethical shopping can disagree on who's good and who isn't.

For example, the Council on Economic Priorities gives honor-roll status to Colgate-Palmolive (makers of Colgate toothpaste, Ajax, and other cleaning products).

But the National Anti-Vivisection Society in Chicago rates the same company a holdout, because it tests some of its products on animals.

The company says it has spent millions of dollars on alternatives during the past decade, and has sharply reduced animal testing. It says it uses animals only when required by law or if "absolutely necessary to ensure safe use by humans."

Nonetheless, the Anti-Vivisection Society recommends consumers brush their teeth with Tom's of Maine, a natural personal-care-products maker in Kennebunk, Maine.

In 1995, the company became the first toothpaste-maker to win the seal of acceptance from the American Dental Association without animal testing. (Typically, companies test their toothpaste on laboratory rats, then kill the animals so scientists can examine their teeth under a microscope.)

So before choosing to shop ethically, you have to decide what your ethics are. Several organizations create lists of companies they do or don't support.

"It's important to recognize that people exercise their values in a wide array of different ways," says Dylan Reinhardt, spokesman for Tom's of Maine. "I'm sure there are Colgate brushers who are involved in their community and concerned about the environment."

Then there's the issue of cost.

Ethical products often carry higher prices. A six-ounce tube of Tom's toothpaste recently sold for $3.17 at a St. Louis-area pharmacy, 160 percent higher than $1.99 for a 6.4-ounce tube of Colgate.

And consumers appear more willing to pay that premium.

According to a Roper Starch Worldwide poll last year, a growing number of consumers said they were willing to pay the biggest premium for "green" goods. But their numbers are still small.

"If it turns out the 'green' movement is important to your life ... then you may be prepared to pay a premium," says Elliott Ettenberg, chairman and chief executive officer of Bozell Retail, a new unit of Bozell Worldwide that specializes in retail advertising. "But I don't know of any leading detergent that got there by being 'green.' "

Companies getting top honors from The Council on Economic Priorities for their ethical behavior:

Adolph Coors

Avon Products

BankAmerica

BankBoston

Baxter International

Ben & Jerry's Homemade

Bristol-Myers Squibb

Brooklyn Union

Chevron

Citicorp

Coca-Cola

Colgate-Palmolive

Dole Food

General Electric

Hewlett-Packard

IBM

Johnson & Johnson

Kellogg

Merck

PepsiCo

Pfizer

Polaroid

Sun

Xerox