01 Jul 2013 The Retail Industry Leaders Association (RILA): A Cartel that Threatens Innovation and Competitiveness, by Bonner R. Cohen, Ph.D.
The rise of the administrative regulatory state over the past several decades has prompted George Washington University law professor Jonathan Turley to speak of a de facto fourth branch of government, characterized by “sprawling departments and agencies that govern with increasing autonomy and decreasing transparency.” Administered by an army of unaccountable and unreachable bureaucrats, who issue new rules and regulations at a staggering pace, the fourth branch, according to Turley, “now has a larger practical impact on the lives of citizens than all other branches combined.”1
Every bit as intrusive, though less well understood, is the administrative regulatory state’s counterpart in the private sector. Here, under the guise of promoting “sustainable” products and technologies, a growing number of trade associations are imposing their particular view of the world on their member companies and, by extension, on the nation’s consumers. While the standards and practices dictated by “sustainable” trade associations do not have the force of law behind them, their effect on businesses and consumers can be as far-reaching as the most sweeping edicts from Washington regulators.
The Retail Industry Leaders Association (RILA) includes, in its own words “more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs, and more than 100,000 stores, manufacturing facilities, and distribution centers domestically and abroad.”2 RILA’s membership is made up of such household names as Wal-Mart, Best Buy, Home Depot, CARMAX, and Gap, Inc. as well as successful but lesser-known companies such as ULTA, REI, JO-ANN, Meijer, and Giant Eagle.3 What these companies have in common is their adherence to RILA’s increasingly restrictive code of conduct, which is based on dubious underlying assumptions that reveal a clear political agenda.
“As the retail sustainability field evolves,” RILA’S 2013 sustainability report tells us, “a class of top performers has emerged – those companies that have defined the development curve for the industry by embracing the full breadth of sustainability activities, thereby achieving an equally wide breadth of benefits.”4 In its “support of a healthier planet,” RILA’s Retail Sustainability Initiative (RSI) focuses on five topics said to be “key to successful retail programs.” They are:
- Energy and greenhouse gas emissions
- Waste and recycling
- Products and supply chains
- Environmental compliance
- Communicating, reporting, and engaging5
By covering everything from products and supply chains to energy and communications, RILA’s initiative is deadly serious about embracing “the full breadth of sustainability activities.” Yet as ambitious as the program is, RILA, like other organizations promoting sustainability, is remarkably reticent about what the term really means. The term’s elusive character dates to 1987, when then-Norwegian Prime Minister Gro Harlem Brundtland defined sustainable development as meaning that “humanity must ensure that meeting present needs does not compromise the ability of future generations to meet their own needs.”6
RILA’s Roadmap to the World of Sustainability
A concept as amorphous as sustainability lends itself to whatever interpretation a politically astute and commercially powerful advocacy group chooses to give it. RILA, together with like-minded organizations such as the American Sustainability Business Council, the Sustainability Consortium and the Security and Sustainability Forum, seek to use the private sector as a means of changing public policy.7 In its 2012 sustainability report, for example, RILA claimed that, “the traditional methods of competition – namely price, quality, service, and convenience – are now being supplanted by environmental and social considerations. These changing marketplace dynamics reinforce retailers’ efforts to act on environmental and social concerns in their direct operations and product supply chains.”8
Redirecting retailers’ behavior so as to achieve these environmental and social goals will often require “expertise not yet available within an organization.” Forging a path forward will have retailers reach out to “nonprofits, academics, and governments, as well as to their suppliers, consumers, investors, vendors, and communities.” RILA assures us that these “stakeholders” will provide “diverse perspectives that will accelerate sustainable innovation.”9 Note that RILA puts nonprofits (shorthand for environmental and other approved pressure groups), academics, and governments ahead of consumers, investors, and suppliers as sources of the “expertise” it believes retailers need. RILA also slips in the term “stakeholder” (no definition provided) to label those groups deemed worthy of bestowing their wisdom on presumably grateful retailers.
In the name of fostering “transparency,” RILA further notes that reporting on financial information alone “can no longer articulate the complexities and intricacies of retail operations and global supply chains.” Instead, retailers should disclose “their activities, strategies, goals, challenges, data, and more.”10 RILA proclaims that sustainability “will be integrated into the business,” and to that end, company-wide “sustainability teams” will coordinate their activities in the areas of facilities management, real estate, supply chain, merchandizing and marketing. The goal is to implant all aspects of sustainability into retailers’ daily practices and decisions.11
By managing product lifecycle impacts, human rights concerns in the supply chain, and the safety of products, RILA argues, “industry and stakeholder collaboration will help retailers identify and address the root causes of deeply embedded social and environmental challenges.”12 While RILA remains vague about what is meant by the “root causes of deeply embedded social and environmental challenges,” scratch beneath the surface of the high-minded sounding phrases, and the organization’s political agenda is revealed. The elevation of greenhouse-gas emissions to a place of prominence, for example, puts RILA squarely on the side of alarmists who, in the absence of any compelling data, blame human activities, i.e., the burning of fossil fuels, for climate change. Similarly, RILA calls for “reducing toxic chemical use,” but makes no mention of the levels of toxicity – the dose makes the poison – used in chemicals during the manufacturing process. Retailers also are exhorted to adopt “proper labor standards,” but no explanation is provided for what the word “proper” means.
Taking Away Choices
In the name of sustainability, RILA has created a green straightjacket that will limit the choices of consumers to those products and technologies that meet the preconceived notions of RILA’s self-appointed stewards of sustainability. Similarly, retailers, manufacturers and suppliers who have their own ways of conducting their businesses, and who let the success or failure of their products and technologies be determined by the marketplace, will find themselves effectively barred from entry into a game RILA and its cronies have rigged.
In “Democracy in America,” published in 1833, Frenchman Alexis de Tocqueville marveled that Americans preferred voluntary associations to government regulation. “In the United States, they associate for the goals of public security, of commerce and industry, of morality and religion,” he wrote. “There is nothing the human will despairs of obtaining by the free action of collective power of individuals.”13
RILA is the very antithesis of the free associations de Tocqueville so admired. Its sustainability initiative creates another level of bureaucracy, overseen by the same kind of “unaccountable and unreachable bureaucrats” Jonathan Turley identified as presiding over the administrative regulatory state. RILA – a cartel masquerading as a trade association – has nothing in common with free markets and poses a threat to a free society.
Bonner R. Cohen, Ph. D., is a senior fellow at the National Center for Public Policy Research.
1 Jonathan Turley, “The Rise of the Fourth Branch,” Washington Post, May 26, 2013, p. B4.
2 2013 Retail Sustainability Report: Fueling Continuous Development, Retail Industry Leaders Association, p. 6. Available at http://www.rila.org/sustainability/sustreport/sustainability-report-landing-page/Documents/RetailSustainabilityReport.pdf
4 2013 Retail Sustainability Report, p. 3.
5 Ibid. p. 6.
6 Quoted in Bonner R. Cohen, The Green Wave: Environmentalism and its Consequences, (Washington, D.C., Capital Research Center, 2006), p. 9.
7 See Jarol B. Manheim, Biz-War and the Out-of-Power Elite: The Progressive Left Attack on the Corporation, (Mahwah, New jersey, Lawrence Erlbaum Associates, 2004), p. 86.
8 2012 Retail Sustainability Report: Successes, Challenges, and a Vision for the Future, Retail Industry Leaders Association, 2012, p. 6. Available at http://www.rila.org/sustainability/sustreport2013/sustainability-report-landing-page/Documents/2012RetailSustainabilityReport.pdf.
9 Ibid. p. 8.
10 Ibid. p. 8.
11 Ibid. p. 9.
12 Ibid. p. 10.
13 Quoted in Niall Ferguson, “The Regulated States of America,” Wall Street Journal, June 19, 2013, p. A15.