Tim Cook Is Right: Why Profits-First Policies Are Bad for the Planet (And Business)

The internet has been buzzing this weekend over Apple CEO Tim Cook's passionate take-down of a representative from the National Center for Public Policy Research or NCPPR at the company's annual shareholder meeting. When the NCPPR rep asked Cook to disclose the costs of Apple's sustainability initiatives, and to commit to only pursuing initiatives which offer a decent and explicit return on investment (ROI), Cook broke his usually calm demeanor to respond.

Here's how the MacObserver reported the incident:

What ensued was the only time I can recall seeing Tim Cook angry, and he categorically rejected the worldview behind the NCPPR's advocacy. He said that there are many things Apple does because they are right and just, and that a return on investment (ROI) was not the primary consideration on such issues.
"When we work on making our devices accessible by the blind," he said, "I don't consider the bloody ROI." He said that the same thing about environmental issues, worker safety, and other areas where Apple is a leader.
As evidenced by the use of "bloody" in his response—the closest thing to public profanity I've ever seen from Mr. Cook–it was clear that he was quite angry. His body language changed, his face contracted, and he spoke in rapid fire sentences compared to the usual metered and controlled way he speaks. He didn't stop there, however, as he looked directly at the NCPPR representative and said, "If you want me to do things only for ROI reasons, you should get out of this stock."

Now two things came to mind when I read about Cook's response:

1) I was delighted to hear him frame this issue in terms of morality, not economics. For too long, we've pretended that business and ethics are mutually exclusive, or at least barely related realms—dealing with ethical boundaries in business in terms of laws and regulations, and then expecting businesses to do whatever they can to make a profit within the confines of those regulations.

And that's nonsense.

Imagine if we, as individuals, simply surrendered the concept of ethics to the law, allowing ourselves to do whatever we wanted in pursuit of pleasure or success, so long as it is legal. It would be a disaster for us as a civilization, and I suspect it wouldn't make us very happy either. Why should we expect business to behave that way? If business really can shape the world for the better—and conservatives are usually those at the forefront claiming that it can—then we have to reunite business, ethics and economics so that we can pursue a broader concept of what it means to be successful.

Whether it's B Corps or Gross National Happiness, there are countless smart ideas out there for how to do that. I consider Tim Cook's response to be an implicit endorsement of those efforts.

2) I can't help wishing he had also responded to the economic case for moving beyond a myopic focus on specific ROI. From Apple's massive solar farm in Charlotte to plans for the largest rooftop solar array in the US, Apple's commitments to clean energy are undoubtedly a smart business move.

Whether they are seen as a hedge against future energy costs; an investment in a new energy paradigm which Apple may become a major player in; or simply a powerful symbol of corporate responsibility which serves to build brand loyalty and win favorable press coverage, Apple's sustainability commitments can not be compared in an apples-to-apples (sorry!) way to conventional energy purchases.

Even if buying coal or tar sands oil is artificially cheap right now (price on carbon anyone?), these purchases have no benefits to Apple's brand as a corporate leader. Worse than that, with activists increasingly targeting brands for their exposure to dirty energy, and investors backing off from companies who do not take climate change seriously, buying dirty energy is becoming a corporate liability.

And that's something that's hard to calculate on a spread sheet.