Is planned obsolescence socially responsible investing

In a recent article , Apple has been accused of mandating a policy of planned obsolescence, which brings into question the concept of business ethics, and the social responsibilities of a company. By doing so, thousands of consumer headphones have been rendered obsolete, giving us the notion that Apple deliberately wants us to spend more on their newest product.

The colossal backlash from the consumer community can be used to demonstrate the consequences of a company that does not conform to all stakeholders, in this case, consumers. This ethical question can be analysed through a comparison of shareholder and stakeholder theory, explored by Milton Freidman and Edward Freeman. According to Freidman, the only social responsibility of a business is to maximize profits to its shareholders, whilst abiding by the law.

Other products may also contain design features meant to frustrate repairs, such as Apple's " tamper-resistant " pentalobe screws that cannot easily be removed with common personal-use tools, overuse of glue, as well as denying operation if any third-party component such as a replacement home button has been detected. The cost of this repair may exceed the residual value of the appliance, forcing it to be scrapped. All the elements shown in the photo motor, switch, speed control microprocessor, power cord, etc.

In , Toshiba was criticized for issuing cease-and-desist letters to the owner of a website that hosted its copyrighted repair manuals, to the detriment of the independent and home repair market. Some devices are even built so that the battery terminals are covered by the main board, requiring it to be riskily removed entirely before disconnecting the terminals. In the latter case, this could void the warranty on the device. Many products are primarily desirable for aesthetic rather than functional reasons.

An example of such a product is clothing. Such products experience a cycle of desirability referred to as a "fashion cycle". By continually introducing new aesthetics, and retargeting or discontinuing older designs, a manufacturer can "ride the fashion cycle", allowing for constant sales despite the original products remaining fully functional.

Sneakers are a popular fashion industry where this is prevalent— Nike 's Air Max line of running shoes is a prime example where a single model of shoe is often produced for years, but the color and material combination "colorway" is changed every few months, or different colorways are offered in different markets. Motor vehicle platforms typically undergo a midlife "facelift"—a cosmetic rather than an engineering change for the purpose of cost effectively increasing customer appeal by making previously manufactured versions of the same fundamental product less desirable.

The most simplistic way to achieve this outcome is to offer new paint colors. To a more limited extent this is also true of some personal-use electronic products, where manufacturers will release slightly updated products at regular intervals and emphasize their value as status symbols.

The most notable example among technology products are Apple products. Some smartphone manufacturers release a marginally updated model every 5 or 6 months compared to the typical yearly cycle, leading to the perception that a one-year-old handset can be up to two generations old. A notable example is OnePlus , known for releasing T-series devices with upgraded specifications roughly 6 months after a major release device.

Sony Mobile utilised a similar tactic with its Xperia Z-series smartphones. Common examples of planned systemic obsolescence include changing the design of screws or fasteners so that they cannot easily be operated on with existing tools, thereby frustrating maintenance.

This may be intentionally designed obsolescence, a withdrawal of investment or standards being updated or superseded. For example, inkjet printer manufacturers employ smart chips in their ink cartridges to prevent them from being used after a certain threshold number of pages, time, etc. In the Jackie Blennis v. HP class action suit, it was claimed that Hewlett Packard designed certain inkjet printers and cartridges to shut down on an undisclosed expiration date, and at this point customers were prevented from using the ink that remained in the expired cartridge.

There are some workarounds for users, for instance, that will more than double the life of the printer that has stopped with a message to replace the imaging drum. A class action lawsuit was filed. Adobe Flash Player or YouTube's Android application [35] unserviceable deliberately, even though they would technically, albeit not economically, be able to keep working as intended.

Where older versions of software contain unpatched security vulnerabilities, such as banking and payment apps, deliberate lock out may be a risk-based response to prevent the proliferation of malware in those older versions. If the original vendor of the software is no longer in business, then disabling may occur by another software author as in the case of a web browser disabling a plugin. Otherwise, the vendor who owns a software ecosystem may disable an app that does not comply with a key policy or regulation, such as the processing of personal data to protect user privacy, though in other cases, this does not exclude the possibility of "security reasons" being used for fearmongering.

This could be a problem for the user, because some devices, despite being equipped with appropriate hardware, might not be able to support the newest update without modifications such as custom firmware. Additionally, updates to newer versions might have introduced undesirable side effects, such as removed features [35] or compulsory changes, [36] or backwards compatibility shortcomings which might be unsolicited and undesired by users.

Software companies sometimes deliberately drop support for older technologies as a calculated attempt to force users to purchase new products to replace those made obsolete. As free software and open source software can usually be updated and maintained at lower cost, the end of life date can be later.

Legal obsolescence[ edit ] Legal obsolescence refers to the undermining of product usability through legislation, as well as facilitate purchasing a new product by offering benefits. For example, governments wanting to increase electric vehicle ownership could increase the replacement rate of cars by subsidising them. People using such cars in these zones must replace them.

Please help update this article to reflect recent events or newly available information. It said replacing products that are designed to stop working within two or three years of their purchase was a waste of energy and resources and generated pollution. From , appliance manufacturers are required to repair or replace, free of charge, any defective product within two years from its original purchase date.

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Sloan wanted those who already owned a GM car to exchange it for the latest model. Source: Wikimedia The history of planned obsolescence dates back to the s, when General Motors president Alfred P. Sloan devised a strategy to compete with the rival auto giant, Ford. In , a meeting of the main manufacturers of light bulbs in Geneva gave birth to the Phoebus cartel, whose objective was to divide up the world market. This organisation also established a standard for the useful life expectancy of light bulbs: 1, hours, as opposed to the 1, or 2, hours that had been common until then.

The cartel fined those who manufactured products with a longer life. But while Phoebus has commonly been accused of being driven solely by the purpose of increasing light bulb sales, engineers believed that after 1, hours, efficiency dropped and energy waste increased, and certain accusations against the cartel of reducing bulb lifespans for profit were dismissed.

Today, the idea has spread among consumers that the large technology multinationals have widely adopted the strategy of manufacturing low-durability devices to force us to buy new models. But Baddeley teaches us a lesson from his own experience.

As an engineer, he participated in the development of a product that had a non-replaceable button battery, a frequent cause of obsolescence. Credit: Martouf Even Canadian author Giles Slade, whose book Made to Break: Technology and Obsolescence in America helped fuel the popular outcry against planned obsolescence, has recognised that the current consumer model has raised the quality of life like never before in history.

How SRI Investing Works Socially responsible investors often seek to avoid companies that have a negative impact on the environment or society. This could include those involved in the production of alcohol, tobacco, gambling, weapons manufacturing, or adult entertainment. Instead, socially responsible investments can include companies that make a positive impact or provide a strong environmental return.

One common way to invest in a socially responsible manner is through impact investing. Impact investing is a type of investment that seeks to generate positive social or environmental impact along with a financial return. Impact investors typically invest in companies or projects that are working to solve social or environmental problems.

Second, you need to decide what type of SRI strategy is right for you. Many investors decide to consider the ESG reports that companies produce each year to see if the company is living up to any ESG claims or expectations. Third parties also create ESG rankings that investors can choose to make decisions from.

Investors may not have to give up on large returns in order to create an SRI strategy. Many of the largest and most successful companies are considered to be strong SRI investments. Ultimately, the decision of what investment aligns with the personal ethics and values of any particular investor is completely up to the investor. For instance, some investors may want to steer clear of companies that have been known to exploit international employment standards, which they may consider unethical.

Socially Responsible Funds List Another investing option for those looking into an SRI strategy is to invest in mutual funds or ETF that has an eco-friendly or socially responsible investing focus. These investments are typically chosen based on the third-party ESG ratings, or the funds will have a specific purpose that they invest based on. There are many different SRI funds to choose from, and each has its own unique set of criteria.

Some SRI funds only invest in companies that meet specific environmental standards while others only invest in companies that have good social and governance practices. The short answer is that yes, some SRI strategies have been proven to be profitable and render decent returns, but no investment is guaranteed to have a strong return.

Additionally, choosing a full SRI-only investment strategy is likely to eliminate some potential big wins in your investment portfolio because part of the market is closed-off from being an option. Many ETFs and mutual funds have prospered as full SRI-only investment funds, providing large returns over a long period of time. This is proof enough that this type of investment can be profitable as long as you apply not just the ethical standards that you have but also a strong investment selection strategy to make a portfolio profitable.

ESG vs. Companies with a strong ESG rating are active in their focus on either limiting negative social and environmental impact or delivering benefits to society or the environment. An example of an ESG investment would be a company that converts its corporate fleet to all-electric vehicles or its corporate locations to use only renewable energy sources.

For example, ESG typically takes into account the environment first while SRI takes into account the ethical standards and how the potential investment impacts society with its business governance.