Do Ethics Matter in Social Enterprise?

What is your definition of social entrepreneur? I've asked that question before but feel compelled to revisit in light of an article in the July 11 The New York Times.

I want to add the questions: Do you have to be ethical in order to be socially responsible? Is it enough to be aware of the planet without being aware of fair practices?

A little background: A few weeks ago, The Times wrote about an entrepreneur – Rick Siegel – who "invented" and sold a product called the Green Garmento, a reusable bag for dry cleaning. It is environmentally friendly in that it eliminates the plastic bags associated with that task.

Siegel was described as an inventor who had an "aha" moment dealing with his own dry cleaning. After describing the permutations and troubles of developing his final product, Siegel admitted that there is another reusable dry cleaning bag out there, the Converta Bag, but says he didn’t know about it until he was already committed to his product.

No mention was made of a third similar product, the Clothesnik.

What he failed to mention, as came out in the second article, was that he had tried to enter into a partnership with Clothesnik producer, Jane Wyler. Wyler had the email to prove that the idea for Green Gramento came not from Siegel's "aha" moment but from a trade show at which he saw her product.

No mention in his interview with The Times that he tried to invest in her company. No mention of emails in which he pointed out how easy it would be for someone to "undermine your uniqueness and reap the available rewards."

Which he did.

Siegel's product is different in price and material from the Clothesnik so it isn't a straight-across copy. It is absolutely good business to see something and make it better or cheaper. Legally and from a business point of view, Siegel is just a good competitor.

The question is: Is he ethical? When interviewed withThe New York Times as a super-green, eco-conscious business person, should he have acknowledged inspiration from a product he saw at a trade show rather than creating the story of wrangling hangars and plastic in his closet? Should he have credited the inspiration to its true source? Is it ethical to lie? Is it socially responsible to lie?

For that matter, is it even good business? From a marketing standpoint, he'd have boosted his product even more by acknowledging the inspiration and then detailing why his product is better.

Which brings us back to the question: Do you have to be ethical to be classified as a social entrepreneur?