Dr. Bronner’s Magic Lawsuit
Erik Assadourian explores how Dr. Bronner’s Magic Soaps company sued cosmetic companies to clean up its competition.
|Erik Assadourian is a Senior Fellow and Co-Director of State of the World 2013: Is Sustainability Still Possible?|
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|ERIK ASSADOURIAN | NOVEMBER 4, 2013|
The environmental and health communities are no strangers to suing for social change. Look at Earthjustice, whose tag line is “Because the Earth needs a good lawyer,” or the Center for Science in the Public Interest, which regularly sues food companies to improve the nutritional quality of their products and to minimize confusing labeling.
But more powerful than these efforts are ones coming from progressive companies like Dr. Bronner’s Magic Soaps. Unlike many nonprofits, companies generally have regular sources of revenue and can finance litigation more easily (and more naturally) as part of an effort to sustain their competitive niche.
I write more about this in The Guardian’s Sustainable Business blog, so read there about how Dr. Bronner’s used litigation not only to strengthen its niche as a leading seller of organic soaps, but also to clean up the cosmetics industry, forcing many competitors to either actually use organic ingredients in their “organic” products, or to remove inaccurate claims on their packaging. As company president David Bronner notes, “About 80 percent of these companies simply dropped their claims; the others reformulated.”
Dr. Bronner's company president David Bronner. Source: Wikicommons user Carol M. Highsmith
It’s not surprising that this innovative strategy comes from Dr. Bronner’s, a company that already includes organic and fair-trade ingredients in most of its products; caps the earnings of managers at just five times what the lowest-paid employee earns (compared to an average of 204 times for CEOs of Standard & Poor’s 500 companies); has directed an average of 54 percent of its annual profits to charity or advocacy campaigns over the past decade; is actively engaged in social campaigns, including pushing for the labeling of genetically modified organisms (GMOs) in Washington state; and continues to promote on its product labels the founder’s passionate calls for an all-inclusive religion that could bind humanity together rather than drive it apart.
But it is surprising that more green companies aren’t using a relatively small amount of resources necessary to sue their competitors and fuel a “race to the top.” Maybe they just needed a good model to follow? Perhaps Dr. Bronner’s is it. For about $1.5 million, spent over 5 years, the company drove a lot of its competitors out of its niche (at least partially) and made others start paying more for organic ingredients, not to mention increasing its own marketing power while embarrassing its competitors. Overall, it’s a pretty smart strategy that I look forward to seeing more of in years to come!