South-Western - Management  
Home Depot Reviews Timber Policy
Topic Ethics and Social Responsibility
Key Words social responsibility, conservation
News Story

Environmental groups have been pressuring retailers that sell wood to help conserve forests. Home Depot, the largest wood retailer, vowed in 1999 that it would quit selling wood from environmentally sensitive forests by the start of this year. In order to do this, Home Depot first had to ask vendors where they got their wood, who in turn had to ask their suppliers. Home Depot has reduced its wood purchases from rainforests and from wood gotten through nonsustainable methods (without replanting or in large tracts of clear-cutting). Environmentalists feel the changes Home Depot is making may prompt others to modify their approach to harvesting timber.

Staples, Inc. is another company that has made changes in reaction to pressure from environmentalists. It is aiming to more than triple the recycled material in paper products sold in its stores. Lowes Cos., a competitor to Home Depot, released its own wood procurement policy in mid-2000, which seeks to aggressively phase out the purchase of wood from endangered forests.

Questions
1.

If Home Depot's decisions to buy wood more responsibly resulted in increased costs and less profitability, it would eventually show up in the stock price and effect shareholders. To whom is Home Depot more socially responsible - shareholders or society in general? If they conflict, how does an organization choose between fiscal responsibility and social responsibility?

2.

Not buying wood from environmentally sensitive forests is a discretionary responsibility. What does this mean?

Source Dan Morse, "Home Depot Reviews Timber Policy," Wall Street Journal January 2, 2003, p. A13.
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