And it is not only these two tech giants who report top revenues and profits. Another one, Microsoft, report very strong financial results too for this same period: revenues of $36.9 billion (up 14%) and net income of $11.6 billion (up 38%). No all-time records, but nevertheless significantly above expectations.
Shareholders will like this. Earnings per share were $4.99 (Apple), $6.47 (Amazon) and $1.32 (Microsoft). And such great financial results are generally seen as positive. Stock markets go up, company values rise (all above $1 trillion) and news items about such results usually celebrate them as evidence of great performance.
However, taking a broader perspective, we can ask whether this really is positive news. Especially in the light of the significant social and environmental issues that our world currently has to deal with, we can ask whether earning large amounts of profits is still a sign of good business in 2020. Or it is a sign of greed that companies should start feeling embarrassed or ashamed about?
The “shaming” trend
Over the past few years, we witness an increasing trend of public “shaming” of organizations and individuals for behaviors that are no longer considered acceptable or appropriate. Popular examples are flight shaming and food shaming, but we also see tax shaming, eco shaming and other forms popping up.
Of course, people have always had different viewpoints and whatever the behavior, there are always people who think you should be ashamed about it. Furthermore, specific companies have longer publicly been held responsible for what is seen as inappropriate behavior. In 2016, for example, activists from over 40 countries have protested against unsafe H&M factories. And as recent as last week, climate change activists have blocked Shell’s head quarters. In that light, shaming is not exactly new.
But things are changing. Gradually, shaming is not something done by only activists anymore. Increasingly it are “ordinary people” who join the shaming. And gradually, it is not targeted at specific companies only, but more generally at entire industries or types of behavior. This means it is starting to make an impact
A good example is flight shaming. It started in 2018 in Sweden as flygskam. Originally championed by Olympic athlete Bjorn Ferry, it gained momentum mostly through teenage activist Greta Thunberg. Already a good year later, as reported by CNBC in October 2019, Citi observes that flight shaming is getting traction and could cost airlines billions of dollars because consumers are exploring alternative modes of transportation and look for ways to offset their carbon emissions. Along those same lines, according to Trend-Monitor, with the climate problem becoming increasingly pressing, the more general “eco shaming” is getting traction too.
Profit shaming as next shaming trend?
There are cases of tax shaming (shaming companies for paying no or too low taxes) and money shaming (shaming people for how they spend their money), but I am not aware yet of clear cases of profit shaming. And a quick search on the Internet tells me the term isn’t used yet. So let’s coin it here: profit shaming, and define it as the shaming of companies for earning extraordinary large amounts of profits.
While not adopted yet, it is not hard to imagine that it will be in the near future. During the Davos 2020 meeting of the World Economic Forum, a group over 169 millionaires, calling themselves “Millionaires against Pitchforks” spread a letter to governments in which they ask for more taxes. Mainly driven by the poverty and inequality we witness both within and between countries, they see paying more taxes as the best mechanism for a fairer distribution of wealth.
With such initiative coming from those at the top of the money pyramid, it is not hard to imagine that others will join in asking companies to take responsibility for the money they earn. From there it is just a small step to profit shaming. After all, large profits—before or after tax—are a sign of inequality too. In the large majority of cases, profits flow to those with money, including the richest persons on this planet.
Instead of being used as profits and shareholder earnings, that same money could be used for other purposes too. Of course, commercial companies are commercial companies and not philanthropic institutes. So, they are expected to generate some profits. But increasingly, and along the line of the “Triple Bottomline” (3Ps) they are expected to not only care about Profits but also about People and our Planet. With just the fourth-quarter profits of $22.3 billion (Apple), $3.3 billion (Amazon) and $11.6 billion (Microsoft), a lot can be done to make this world a better place.
This post was published earlier here on my forbes.com page.
Image credit: Getty