Ethical Business – The Co-Operative Model

If you met me on the street and asked me what Ethics Girls is all about I would normally say Ethics Girls is an ethical company. That seems fairly obvious as we sell & promote ethical fashion. But after reading The Observer’s Good Company Guide last week, I have decided to go for a new label. I think we should call ourselves a Good Company.

The Observer headline: “Good Companies Guide: easing the planet’s growing pains will help business to profit In the face of a looming environmental and demographic crisis, weak companies will go to the wall. Only those that address the needs of a rapidly changing world will prosper.” Being a good peak oil, green and ethical champion / obsessive, of course I believe that our company is certainly aiming to be a company that is preparing for a new future. It might not be so obvious to the reader exactly how clothes and the future challenges to business are connected, but in my head they are!

Ethical fashion has been around for a while. It gets plenty of good press coverage but as of yet, this sector hasn’t seen this fully convert properly into cash at the till. So in many respects it’s still in it’s infancy.

Like any other industries, fashion has it’s own periods of madness and, like every other industry, unless it changes it ways it’s difficult to see how it will be sustainable in the future. The last 20 years or so have seen development at such a pace and now we have this thing called fast fashion. So now, it’s not out of place to pop to the shops for a new top just for a single night out. Think back to our grannies making their own clothes and getting things darned so they could still use them once they were slightly worn. You don’t have to go back too far in history to find a time when we had a different kind of relationship to our clothes. When we saved up, bought and then cared for that best dress or suit.

The fashion industry has a lot of issues to address. On the bad side, it’s known for sweatshops, mini seasons and the bad treatment of the stitchers. Now, ever more so, its totally absorbed in offering new, new and yet more new styles and trends.

To avoid the pitfalls of the future, it really will need to start refocusing on how we use our natural resources. We won’t always have a guaranteed water supply to grow endless crops of thirsty cotton and at some point we have to tackle the reuse issue. We cant carry on stock-piling unwanted or unworn clothes and then sending them off to the charity shop, ebay or landfill.

The big fashion retailers and brands are currently cherry picking their way through ethical fashion. Listing some lines alongside the more conventional methods of a profit driven supply chain. What we need is a fresh approach and in many ways that applies to any business.

Ethics Girls is a cooperative. Yes we have decided to focus on selling ethical fashion. That is our mission. But equally being tied into a cooperative business model gives our business the checks and balances needed in order not to fall head first into the race to make profits at any cost.

Cooperatives in their essence are good businesses. They are tied into the little known cooperative values and principals. This means we conduct our business using the values of openness, honesty, social responsibility and caring for others. Similarly the principals of the coop movement demand that we are democratic in our ownership structure – one member, one vote. Profits must be controlled through equal say of its members; we must have a community benefit aspect; there has to be a concern for the environment; we trade with other coops where possible; we honour the principals of education and we are independent.

For me, with these values and principals behind us, we have little choice other than to sell products that are ONLY made in an ethically, honest and responsible way. This gives us our guide to choosing our product inventory and selecting brands that we can work with. The thing that we at Ethics Girls adds to this, as one of our own binding principals, is that everything in our shop has to be beautiful, stylish and of great quality.

In some ways I think that is helpful that I don’t come from a conventional business background, one that is profit driven, in the context of having to tackle the questions asked of business post our recent financial collapse. A focus solely on profit all the time hasn’t given us the answers that we thought we were going to get.

Having a considered approach to the business’s balance sheet seems a much more sensible and sustainable approach. To my mind, knowing that there are hidden costs to a business that land on another company’s balance sheet does seem a bit crazy. We should be accounting for every aspect of our business, wherever that cost may fall.

For me, the fundamental flaw in company law, is that it makes it legally binding for a business to maximise the shareholders profit on their behalf. The cooperative business model rejects this idea to some extent and gives all shareholders the joint responsibility for the profit earned. I think it’s this common approach that is the touch of magic that is found in the cooperative model. It stands strong on the solid foundations of its entire membership.

I would like to think that if Lehmans Brothers had been a co-op, it would have been more than likely that at least one interested and inquisitive ( and quite possibly annoying) member of the group would have been quizzing the board well before the house of cards started tumbling.

Imagine if a shareholder had stood up at an AGM several years ago and asked “can you explain exactly on what assumptions you have made these derivative calculations on sub prime property” the world may have not seen the traumas of the last years. But certainly you can assume it would have made for an interesting agenda item!

Sam Roger
Ethics Girls

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1 Comment on Ethical Business – The Co-Operative Model

  1. I totally agree. The day that investors assess a potential investment opportunity on the basis of stakeholder (staff, partners, community, environment, suppliers AND shareholders) will be a huge step forward. There are signs of this but the traditional purely financial model still massively dominates thinking. Let’s hope that we can change that for the benefit of all. Good luck.

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