Mallen Baker, always a good read, has another thought provoking piece on his blog  about “ethical” business.  He makes a sound point about the inclusion of companies in industries like oil, gambling and tobacco being included in ethical investment indices – essentially that it’s better to have a “bad” company doing good things than to have the same company decide that, since it’s bad anyway, it needn’t bother.

I’ll agree to a point, but there is a degree of hypocrisy about tobacco companies on the one hand trumpeting their efforts to reduce smoking in the U.S. while, here in Indonesia for example, glamorising smoking through pop sponsorships (even failed ones), extreme sports and so on.  Tobacco advertising here is a lot more overt than in many other countires I’ve visited and, it has to be said, underage smoking seems a lot more visible also.

Should tobacco producers, oil companies, weapons manufacturers and other ethically dubious industries be demonized simply because of how they make their money?  No, so long as the business is legal.

I do think, though, that companies today need to be careful that their commitment to social responsibility is seen to apply across the entire global organization.  If it’s wrong to glamorize smoking in the U.S. or in Korea then it’s wrong for the same company to do the same thing in Indonesia.  You can’t hide behind what the law allows and still expect to be seen as a responsible company.

I agree with Mallen that demonising companies that you don’t like (even if you are in a majority) is an exercise in self indulgence. However, I also believe that the same self indulgence is behind the apparent idea that you can pay the cost of doing good in one market by continuing to do bad in another.