Proving the Free Market has Room for Responsibility

adam smith honest tea bottle photo

What would Adam Smith think about the triple bottom line? Image credit: Wikimedia Commons, Honest Tea

Many free market thinkers have used Smith's theory to argue that business has no obligation to think about what's best for society—that merely by pursuing the bottom line, companies are promoting the public interest. But why shouldn't a company seek to prosper based on market forces and also try to intentionally promote the public interest?Since Honest Tea is enjoying its thirteenth straight year of double-digit growth, it's fair to claim we've created a business that successfully operates within the marketplace. And though a follower of Adam Smith might claim our obligation to society ends there, we would argue that this is where our mission starts.

We've always believed offering beverages that are healthier for consumers and the planet is a positive thing. On the other hand, we operate within the contradiction of being a company committed to sustainability, (sustain = uphold and nourish) within a consumer economy (consume = to devour and destroy). So we do our best to stay honest about what we can and what we can't do within this paradox. As part of that commitment, this week we are announcing several important steps.

First, conversion of all 28 of our tea varieties to Fair Trade certification—Since 2003, when Honest Tea was the first to put Fair Trade certified tea in a bottle (Peach Oo-La-Long), we have supported tea suppliers around the world as they work toward Fair Trade certification so we can expand our offerings.

Though there isn't enough demand (yet) for all of their teas to be sold with the Fair Trade premium, the expansion of Fair Trade helps insure that more gardens are meeting the higher labor standards required for certification.

Over the coming year we will be working with our suppliers and Fair Trade USA to help deepen the impact of the Fair Trade premiums we will be giving back to these communities, all of which are in the developing world. We're excited to be making this announcement during Fair Trade Month, and have adopted this Friday, October 15, 2010 as our Fair Trade day.

Second, release of our first annual Mission Report, "Keeping It Honest." Though annual reports and even corporate social responsibility reports aren't new, we are committing ourselves to an annual cycle of sharing our strides and setbacks on the journey toward realizing our mission.

We recognize that part of our impact comes not just from what we do, but the extent to which we influence others, and this report seeks to evaluate our progress on all fronts, including our Products, Packaging, the Planet, its People and our Partners.

Finally, we have focused more of our team on the ongoing challenge of living up to our mission. We have just appointed Cheryl Newman as Honest Tea's first Deputy Chief of Mission. You might recognize this title as a post given to the second-in-command at an Embassy.

Though Cheryl isn't second in command for all of Honest Tea's activities, she has been tasked with looking at all aspects of our company's activities and identifying ways to better align them with our mission. And she will report to the person ultimately accountable for our mission, which has to remain the CEO, or in this case the TeaEO. We're happy to let the invisible hand of the market continue to drive our growth, but are committed to being hands-on about the role Honest Tea plays in society.

Read more about corporate responsibility:
The Sustainability Institute Makes the Case for Corporate Responsibility
Hélio Mattar on Consume and Corporate Responsibility
Corporate Social Responsibility and Globalisation: An Action Plan for Business

Proving the Free Market has Room for Responsibility
Many free market thinkers have used Smith's theory to argue that business has no obligation to think about what's best for society—that merely

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