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Should Music Companies Ensure Investors Are Ethical?

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It was with shock that I read that Spotify had received $10 million dollars investment from global soft-drink brand Coke in its latest fundraising round. Why the shock you ask? Firstly, Coke drinks are not healthy and numerous studies have shown the correlation between obesity and drinking fizzy sugary drinks. Secondly the company has an appalling human rights record, with strong links to killing union activists in South American countries.

Or course there are many other corporate peers out there. But as the Coke investment into Spotify was just reported by numerous sources last week TMV thought it apt to discuss the issues at hand – in relation to investment from unethical companies that participate in torture, murder and illegal dumping of waste.

In India it has been reported that Coca Cola has caused severe water shortages, polluted groundwater and soil around its bottling plant, distributed its toxic waste as “fertilizer” to local farmers and sold drinks with extremely high levels of pesticides (Source: www.indiaresource.org/campaigns/coke).

Going further an international boycott has been in place since July 2003, calling for accountability for human rights abuses including the murdering of trade union workers in Columbia (Source: www.killercoke.org). If you just dig the surface a little the level of abuse Coke has colluded in is astronomical.

According to the Killercoke website, in China an undercover investigation at numerous Coke plants uncovered the fact that Coke employees are “involved in the most dangerous, intense and tiresome labor, work the longest hours, but receive the lowest wages and face arrears and even cutbacks in their pay”.

Global Exchange also lists Coke on their “Most Wanted” Corporate Human Rights Violators “Alums” for violent killings, kidnap and torture, water privatization, health violations, and discriminatory practices (Source: Shop Ethical App 2012). The list goes on and it is not pretty at all.

Why is this important in respect of Spotify and the investment it accepted from Coke? Quite simply TMV would suggest that to take money from such a corporate prier it is akin to accepting money from terrorists. First and foremost, as an artist, label or publisher, do you want your band or business associated with such a brand as Coke? Do you want to have advertisements and promotions associated with Coke playing in between your artist’s music?

Does Spotify offer artists on its service the option to ensure they can opt out of receiving Coke advertisements prior to or immediately after their music is played by users? If not why not? TMV suggests this is a feature that Spotify should offer if it is currently not doing so. Why should artists have to have their music compromised by being associated with such corporate priers as Coke? Especially, if they would like their music on the Spotify service?

In TMV’s view any music company that associates itself with Coke is morally repugnant – as you are supporting human rights violations, environmental violations and worse including torture and murder, just by your association with such a company.

Just to reinforce this at a conference attended by London mayor Boris Johnson, the CBI’s president, Sir Roger Carr stated that we “must demonstrate that we are a generation that is focused not just on how much money we make – but how we make money. We must salvage the reputation of business”.  Carr is also the Chairman of Centrica, which owns British Gas.

Going further the CEO of multination consumer goods company Unilever, Paul Polman stated that the UK should “set the standard” for ethical economic growth.

Please note this article is not just aimed at Spotify – they were used as an example due to it being relevant to recent news in terms of their recent fundraising round. There are plenty of other music start-ups that have investors with questionable ethical records as well. Please do feel free to inform us of any you know of in the comments section below.

A Spotify spokesperson had the following to say; “Spotify is satisfied that Coca-Cola is a highly ethical company and respects human and workplace rights.” Spotify also managed to get Coca Cola to provide the following response to this post, from their spokeswomen Judith Snyder.

Coca Cola stated the following: “The proposed article forwarded to me contains several old allegations that have repeatedly been refuted by local and international authorities, as well as by our Company.  In fact, Company officials have personally provided accurate information about these allegations to many of those cited, who nevertheless continue to spread these unfounded rumors.

The Coca-Cola Company is committed to contributing in a positive way to local communities in many ways, including respecting workplace rights and human rights; protecting our natural resources; supporting economic development; and promoting active, healthy lifestyles.  Information about these efforts can be found in our most recent Sustainability Report Link is: http://www.coca-colacompany.com/sustainabilityreport/ “

Whilst it is good to get these responses from both respective company’s TMV does still ask if all is well and good then why do Global Exchange still list Coke as “Most Wanted” for the crimes already outlined earlier in this post. It is all well and good to have an internal sustainability report – but what about some independent reports. For TMV that is what will settle the issues raised once and for all.

TMV also respect that Coke do undertake numerous worthy charitable projects and should be applauded for doing so. However, lets see some transparency in terms of some very REAL independent reports on Coca Cola’s corporate citizenship.

We suggest you download the iOS or the Android ‘Shop Ethical’ app and educate yourself on your commute to work and back. The app provides an in-depth analysis of all reported abuses for many household name brands.

On a final note, it is time to start looking beyond the cash in hand up front from investors and seek out the truth behind their corporate facades. To not do so carries serious reputational risks for your brand. Accepting investment from companies with dubious records when it comes to conducting business ethically is quite simply bad business.

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