The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

To sign-up to receive the CSR Newsletters regularly during the fall and spring academic semesters, e-mail author David Chandler at david.chandler@ucdenver.edu


Thursday, February 21, 2019

Strategic CSR - Palladium (II)

The article in the url below contains a follow-up to the Palladium Newsletter of a couple of weeks ago (Strategic CSR – Palladium), which reported that the metal, palladium, is now worth more than gold. As a result, the criminal world is adapting:
 
"Soaring palladium prices are inspiring an unusual band of criminals: catalytic converter thieves."
 
The article reports that an epidemic is striking parked cars across Chicago. And when thieves strike, they are only interested in the catalytic converters, nothing else on the cars:
 
"Police in Chicago say perpetrators, who harvest the devices and sell the scrap metal, have converter theft down to a fine art. 'What tends to happen is that in the middle of the night, a group of guys come by with a truck and a reciprocating saw. They cut out the converter, throw it in the truck and drive away,' said Howard Ludwig, public information officer at the Chicago Police Department."
 
Sigh. Such is human nature.
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 
 
Thieves Target Palladium in Cars
By David Hodari
February 11, 2019
The Wall Street Journal
Late Edition – Final
B1
 

Tuesday, February 19, 2019

Strategic CSR - Green New Deal

The recently announced Green New Deal (GND), fronted most publicly by Alexandria Ocasio-Cortez (the new congresswoman from New York), is receiving a lot of attention in the media. As The Economist puts it in the article in the first url below, the proposal is both popular and controversial, having "been met with surprising enthusiasm in Washington." In more substantive (i.e., non-political) circles, however, the GND has been received less enthusiastically. The theme that seems to unite the skeptical commentaries I have read is the accusation that the proponents of the GND misunderstand the fundamental nature of the problem and, as such, have responded with an ineffective solution. In short, if the goal is to tackle climate change, then the GND is unlikely to be successful. Rather than seeing climate change as a "straightforward … market failure" that can be fixed through pricing (i.e., including the externalized costs of carbon into the price we pay to consume it), the GND instead sees climate change as a social problem that must be fixed through government intervention. Given the nature of the proposed intervention (in particular, the scale), skeptics expect numerous unintended consequences:
 
"… the Green New Deal largely dispenses with analysis of the costs and benefits of climate policy. It would create large opportunities for rent-seeking and protectionism, with no guarantee that the promised climate benefits will follow. It might chuck growth-throttling tax rises and dangerously high deficits into the bargain as well."
 
You can read about the GND here. Suffice it to say, it proposes a substantial increase in government involvement in the economy, at the expense of market forces. David Brooks tackles the topic in the article in the second url below, highlighting the massive reorganization of government responsibility:
 
"[The GND] would definitely represent the greatest centralization of power in the hands of the Washington elite in our history. … Under the Green New Deal, the government would provide a job to any person who wanted one. The government would oversee the renovation of every building in America. The government would put sector after sector under partial or complete federal control: the energy sector, the transportation system, the farm economy, capital markets, the health care system."
 
Unfortunately, as he notes, the proposal is both lacking in detail ("Exactly which agency would inspect and oversee the renovation of every building in America? Exactly which agency would hire every worker?") and is highly implausible. After all, "This is from people who couldn't even organize the successful release of their own background document":
 
"The authors of this fantasy are right that we need to do something about global warming and inequality. But simple attempts to realign incentives, like the carbon tax, would be more effective and more realistic than government efforts to reorganize vast industries."
 
Ultimately, Brooks concludes that the consequence of greatly expanding the role of government in society is that it just replaces one elite (capitalists) with another elite (politicians). And it is not clear that a political elite would generate better outcomes than a capitalist elite:
 
"But the underlying faith of the Green New Deal is a faith in the guiding wisdom of the political elite. The authors of the Green New Deal assume that technocratic planners can master the movements of 328 million Americans. … They assume that congressional leaders have the ability to direct what in effect would be gigantic energy firms and gigantic investment houses without giving sweetheart deals to vested interests, without getting corrupted by this newfound power, without letting the whole thing get swallowed up by incompetence. (This is a Congress that can't pass a budget.)"
 
Unfortunately, if we are looking for the efficient (and, for that matter, fair and ethical) allocation of resources, the empirics side with the market. Recent corruptions have produced the distorted outcomes that many are justifiably angry about. But, the solution is to eradicate the corruptions; not to get rid of the whole system and replace it with something that has been proven to be less effective. Any proposed solutions have to grapple with this complexity, rather than resort to unrealistic ideals. This brings me to the article in the third url below, which reviews a recently published book on climate change and brings a little more realism to the debate. In short, it relates how complicated it is for a society to shift from one dominant energy source to another:
 
"Some years ago, while studying how societies transitioned from one energy source to another over the past 200 years, the Italian physicist Cesare Marchetti and his colleagues discovered a hard truth: It takes almost a century for a new source of primary energy — coal, petroleum, natural gas, nuclear power — to command half the world market. Just to grow to 10 percent from 1 percent takes almost 50 years."
 
Rather than technology, the main barrier to progress is usually related logistics and infrastructure:
 
"You would expect suppliers to switch quickly to a better (more abundant, cheaper, cleaner) source. But infrastructure has to catch up: In America, natural gas needed long-distance pipelines to go national; electric cars need still-scarce charging stations. People have to adapt: Elizabethan preachers condemned coal as literally the Devil's excrement; some Victorian homeowners comfortable with gaslight thought Edison's light bulbs too bright. Competition from heavily invested older sources has to be overcome, as with fossil fuels today. These and other changes take time."
 
As the article continues, we do not have that much time to switch to a non-carbon-based energy. While the GND is important in terms of raising awareness, therefore, it does little to demonstrate an appreciation of the scale of the problem we face. It also fails to grapple with the realities of any necessary changes, such as which energy sources can possibly provide the supply we need in the available time-frame. To the authors of the book being reviewed, there is only one answer (logically and technically)—one that many environmentalists will find unacceptable:
 
"… worldwide energy consumption 30 years from now is projected to be about 50 percent higher than it is today. If that number sounds exaggerated, think of four billion Asians installing air-conditioning. For [the authors], the only possible solution to this double dilemma is a rapid, worldwide expansion of nuclear power. No other source or collection of sources of energy, they argue, is positioned to meet these challenges in time."
 
I am not sure how that would be possible (since nuclear power stations take time to build, largely because they are subject to political oversight) but, from everything I have read, there is no escaping the fact that nuclear has to be a big part of the solution. However, you won't find this sort of nuance in the GND.
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Brave new deal
February 9, 2019
The Economist
How the Left Embraced Elitism
By David Brooks
February 12, 2019
The New York Times

Nuclear Option
By Richard Rhodes
February 10, 2019
The New York Times Book Review
 

Thursday, February 14, 2019

Strategic CSR - The amoral market

How do you best incentivize people in order to optimize societal outcomes? I often struggle with this; the argument presented by David Brooks in the article in the url below warns against a pure economic answer to the problem:
 
"We turned off the moral lens. You probably know the example of the Israeli day care centers. Parents kept showing up late to pick up their kids. To address the problem, the centers experimented with fining the late parents. But the number of late pickups doubled. Before, coming to pick up your kid on time was a moral obligation — to be fair to the day care workers. After, it was seen as an economic transaction. Parents were happy to pay to be late. We more or less did this as an entire society — we switched to a purely economic lens."
 
In essence, Brooks suggests that we somehow chose to emphasize the economic and remove the moral—as he puts it:
 
"… economic priorities took the top spot and obliterated everything else. … We ripped the market out of its moral and social context and let it operate purely by its own rules. We made the market its own priest and confessor."
 
I think this is the wrong conclusion. There are two problems, in particular, with Brooks' logic: First, I do not think it is possible to separate the moral from the economic. When we buy something (whether it is a product, or service, or stock, or whatever), we are expressing our values. Disposable income, for most of us, is a scarce resource. As such, we reveal our priorities when we use it. Second, the accusation that we removed the moral assumes that our morals remained the same and that we just took them out of the equation. Apart from being an overly-agentic description of human decision-making (a completely separate issue), my take is that the morals and values are there, just as they have always been (it is impossible to remove them from any decision we make), it is more likely to me that they changed. Why they changed is difficult to answer – whenever I think through issues at the societal level, the explanation often seems to come back to education. What does a High School education mean today? For that matter, what does an undergraduate degree mean, or a master's degree? If those things mean the same that they used to, then it is possible that not much has changed (unlikely, but possible). But, if they mean something different, then something has definitely changed. The outcomes that Brooks is highlighting, to me, suggest they have changed in a way that has made our society more individualistic and less collective (among many other changes). This shift makes it more acceptable to replace moral responsibilities with economic payment—as in the above quote and subsequent examples Brooks includes:
 
"Anything you could legally do to make money was deemed O.K. A billion-dollar salary for a hedge fund manager? Perfectly acceptable. The Apple corporation exists because of American institutions. But, as Pearlstein notes, Apple parked its intellectual property in an Irish subsidiary so it could avoid paying taxes in America and support those institutions. It saved $9 billion in 2012 alone. This is clearly sleazy behavior. Apple employees should be humiliated and ashamed."
 
It is not that the morals have been removed, therefore, but that we have changed our morals to allow certain kinds of behavior that would have been frowned upon in earlier times:
 
"Human beings are moral animals, and suddenly American moral animals found themselves in an amoral economic system, which felt increasingly alienating and gross."
 
No, it is not that our economic system is "amoral," but that the morals today are different than they used to be. This distinction matters, I think, because suggesting morals have been removed gives us all a pass on some level. Reiterating that morals and values are still very much there, but have changed, keeps the burden on us to do something about it, … if we want to.
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Remoralizing the market
By David Brooks
January 11, 2019
The New York Times
Late Edition – Final
A23
 

Tuesday, February 12, 2019

Strategic CSR - Chickens

As noted in the article in the first url below, and in previous Newsletters (see Strategic CSR – Anthropocene, Strategic CSR – Extinction, and Strategic CSR - Plastic), scientists have determined that we are now in a new geological epoch – the Anthropocene:
 
"The 11,700 or so years following the last major ice age are collectively called the Holocene, a geological chapter in earth's biography that includes the development of all human civilization. Some experts argue that humans have fundamentally altered the earth's biosphere to the point where we now live in a new age called the Anthropocene, an amalgamation of the Greek words for 'new' and 'human'. Copernicus was wrong: the earth doesn't revolve around the sun anymore. It revolves around us."
 
Previously, it was reported that the start of this period was pegged to the 1950s, and the main indicators were the layers of atomic dust (from the open-air nuclear weapons tests that took place at the time) and plastic (from the development and widespread use of that wonderfully adaptable, but environmentally problematic, material). The article also mentions the spread of concrete as an indicator of human domination of the planet. Now, however, another indicator that began around the same time has been identified – the factory-farmed chicken:
 
"In 2016, the world consumed almost 66 billion chickens. To put that number in perspective, we slaughtered 1.5 billion pigs, 550 million sheep, 460 million goats, and 300 million cattle that same year. About nine out of every 10 terrestrial animals slaughtered for food globally are chickens. And that looks like it may only increase as chicken consumption is growing – especially in developing countries – faster than the consumption of any other land animal."
 
In particular, it is the bones that are left behind after we eat these chickens that will leave a marker for future beings to know we were here. And we eat so many of them:
 
"In the wild, bird carcasses either decay or are scavenged by predators. Chicken bones, on the other hand, are discarded in landfills where anaerobic activity tends to mummify more than decay. We may see our appetite for 66 billion chickens a year crystalized in the fossil record long into the future."
 
To repeat, that is 66 billion chickens a year! The domesticated chicken just might be one of the most successful animal ever in terms of its overwhelming dominance:
 
"Our planet is covered with chickens. If you took a snapshot of all the birds alive on the planet at this very moment, domesticated poultry – mostly chickens – would have a total biomass about three times greater than all wild bird species combined."
 
This bird is definitely not natural, but is very much the product of modern science:
 
"The modern chicken has been bred into an entirely new animal that looks very little like its wild counterpart. Through breeding techniques and feed manipulation, farmed chickens quadrupled in size between the mid-1950s to the mid-2000s. In order to keep them from getting deathly ill and to accelerate growth, chickens are fed antibiotics prophylactically to the tune of half a million pounds a year in America. About 80% of all antibiotics sold in the US and over half sold around the world are fed to farmed animals, accelerating antibiotic-resistance in bacteria – a public health crisis already killing at least 700,000 people across the globe annually."
 
For an indication of the extent to which chickens are, today, manufactured (rather than natural), see this graphic taken from the article in the second url below, showing the size of a 56 day old chicken in 1957, 1978, and 2005:
 
 
For additional commentary on the domestic chicken, see the great segment John Oliver did on this wonder of modern science: https://youtu.be/X9wHzt6gBgI
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 
 
Why your chicken wings means we've entered a new epoch
By Max Elder
January 10, 2019
The Guardian
 
Ruling the roost
January 19, 2019
The Economist
Late Edition – Final
59-60
 

Thursday, February 7, 2019

Strategic CSR - Palladium

The article in the url below reports that gold is no longer the world's most precious metal:
 
"Last week, an obscure and far less sexy rival called palladium swung ahead, for the first time in 16 years. Gold briefly retook the lead, but spot palladium prices have beaten out gold prices for the past three days. Palladium hit a record high on Wednesday before settling in at $1,255.12 an ounce at the market close in London on Thursday. … Gold was $1,243.02 an ounce."
 
Both gold and palladium are relevant to the CSR debate. Gold is used in electronic consumer devices, due to its properties as an efficient conductor of electricity (it is also malleable and does not tarnish). But, gold is dirty to mine and becomes part of the massive amounts of e-waste that our societies currently generate. Palladium is similarly useful for consumer electronics, but is mostly used in catalytic convertors to scrub the exhaust fumes generated in fuel-based combustion engines:
 
"Until recently, palladium was perhaps best known for sharing a name with several popular entertainment venues and for powering the fictional arc reactor mechanism hooked up to Iron Man's heart. Its primary purpose is far less glamorous: More than 80 percent of the world's palladium is used in the catalytic converters that help vehicles manage their pollutant output."
 
Of course, these uses are what propel the prices of these different metals; it is also what will determine their 'efficient' allocation. What is interesting, though, is the sudden nature of the rise in interest in palladium:
 
"Palladium is one of the best-performing commodities of 2018. Its price has surged more than 50 percent in the past four months."
 
The article contains a brief history of the metal and hints (but is not particularly clear) as to why the price has surged suddenly – it seems to be a mix of greater demand (higher sales of gasoline cars, which use catalytic converters, and lower sales of diesel cars, which don't) and tighter supply (from dodgy places like Russia), even in the face of greater efforts to recycle. As a result:
 
"Demand for palladium has steadily increased for eight years and is expected to outstrip supply by 1.2 million ounces in 2018, and Metals Focus has forecast 'further, sizable deficits to come.' As supply tightens, palladium's price has climbed. … Experts expect it to stay elevated for at least a few months."
 
Either way, I'm guessing the market for palladium jewelry will take a little more time to develop.
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 
 
Pricier Than Gold, and in Your Engine
By Tiffany Hsu
December 14, 2018
The New York Times
Late Edition – Final
B4
 

Monday, February 4, 2019

Strategic CSR - Google

The article in the first url below shows how employees with leverage are asking increasingly more of their employers. The article focuses on the recent activism of Google's employees:
 
"It was a busy fall for Google workers speaking out against their employer. On Nov. 27, a group of full-time employees and contractors were campaigning to extend new policy changes for handling sexual harassment allegations to temporary and contract workers. … The same day, workers made public a petition protesting exploratory plans to build a search engine that complies with China's online censorship regime. Earlier in the month, 20,000 Google workers walked off the job worldwide in a widely watched protest over how the company handles sexual misconduct claims, following a bombshell New York Times story about Google's management of past allegations. "
 
The article presents such efforts as the new face of employee activism:
 
"The walkout was repeatedly called a 'watershed moment,' one that was said to represent a significant development in the labor-employer relationship and a new pressure point for tech giants facing a world increasingly distrusting of their businesses."
 
In particular:
 
"What's different about the efforts of these employees … is that they're not merely pushing for traditional labor issues, such as higher wages or better benefits. Instead, some are publicly questioning their employers' business decisions, opposing government contracts or bringing up broader moral questions about workplace policies, such as the inclusion of contract workers in an increasingly gig economy and the ethical implications of paying executives millions of dollars following allegations of sexual misconduct."
 
Although there is no reason why employees should not have the same leverage in any organization, it appears that employees in Silicon Valley feel more secure in their jobs (or more passionate about their beliefs) to risk alienating their employers. And, at companies like Salesforce.com, the demands are leading to structural changes:
 
"[Recently] Salesforce announced a 'chief ethical and humane use officer' whose job will be 'to develop a strategic framework for the ethical and humane use of technology across Salesforce,' according to a news release. Back in June, more than 650 Salesforce employees signed a petition over the software company's contracts with the U.S. Customers and Border Protection Agency, according to a Bloomberg report; Salesforce CEO Marc Benioff has also been critical of Facebook's addictive qualities, comparing the social media giant to cigarettes."
 
What I found particularly interesting, however, is that employees seem to be differentiating between societal problems that are related to the firm's expertize and those that are completely unrelated:
 
"A recent survey of 1,000 workers by MetLife, for instance, found that 52 percent expect employers to help solve societal issues even if they are not central to the company's business, up from 41 percent a year ago. Seventy percent said companies should work to address society's challenges, up from 63 percent last year."
 
There are two aspects of this phenomenon from a strategic CSR perspective. On the one hand, this is not very sensible from an allocation of resources perspective. It does not make much sense to ask a firm to solve a problem in which it has little or no expertize. Salesforce.com, for example, knows how to write software; it knows little about solving homelessness, yet its CEO, Marc Benioff, has taken a high profile stand on this issue, both in lobbying San Francisco to pass legislation and publicly arguing with other CEOs, such as Jack Dorsey of Twitter, who take a different position (e.g., see here).
 
On the other hand, however, if a key stakeholder group truly values action by a firm, then it is in the firm's interests to respond to these needs. The only question then is, do these stakeholders truly care about the cause (rather than merely saying they care)? For example, if the firm reduced wages in order to address the particular problem, would employees still support it? Or, perhaps more likely, if the firm took away some perks in order to do so, would that be OK? In order for any action to make sense for a firm, it has to be supported meaningfully by a subset of stakeholders. If no one is willing to support it, then clearly it is a waste of the firm's resources to address it. At Google, there is a limit to the activism, at least from the perspective of CEO, Sundar Pichai:
 
"On the same day as the walkout, Pichai spoke at a New York Times conference and said 'there's anger and frustration within the company. We all feel it. I feel it, too. At Google, we set a very, very high bar, and we clearly didn't live up to our expectations.' Yet while Google may be a company that has 'given employees a lot of voice,' he said, 'we don't run the company by referendum.'"
 
The article in the second url below reports what it says is "the first time that tech employees have led their own shareholder proposal":
 
"At Amazon, more than a dozen employees who had received stock grants recently exercised their rights as shareholders. In late November and early December, they filed identical shareholder petitions asking the e-commerce giant to release a comprehensive plan addressing climate change."
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 
 
How tech workers are fueling a new employee activism movement
By Jena McGregor
December 13, 2018
The Washington Post
 
Workers Got Stock. Then They Took Action
By Kate Conger
December 17, 2018
The New York Times
Late Edition – Final
B1
 

Wednesday, January 30, 2019

Strategic CSR - Super Bowl

The Super Bowl is taking place this weekend here in the US. In addition to the game itself, this event is known for the advertising that takes place during commercial breaks. Given the large potential captive audience, firms are willing to pay heavily for the chance to present to them and tradition dictates that they go all out. Often in previous years, the ads have been more eventful and entertaining than the game.
 
More recently, however, companies have begun to stray from product announcements and juvenile humor to tackle more difficult topics that the country is wrestling with at the time. One famous/infamous attempt (depending on your perspective) was Coca-Cola's ad for the 2014 Super Bowl, in which a very visibly diverse group of people (all of whom were US citizens) sang "America the Beautiful" in different languages (it still gives me goose bumps). See the 90 second version of the ad here, and some of the backlash/controversy it generated here.
 
Anyway, 2014 seems like a different age when we could be shocked by such 'controversial' acts. According to the article in the url below, we are now much more jaded and just want companies to stay away from such 'political' statements:
 
"More brands are capturing headlines by tangling with political and social issues in their advertising campaigns. A new poll suggests, however, that most Americans would rather they don't try the same thing during the Super Bowl. And viewers are likely to get what they want. Two-thirds of consumers call the Super Bowl an inappropriate place for advertisers to make political statements."
 
The graph in the article reports that, when asked if the Super Bowl is the "right platform for advertisers to make political statements," 2,200 respondents replied:
  • Very appropriate 7%
  • Somewhat appropriate 13%
  • Not too appropriate 17%
  • Not at all appropriate 49%
  • Don't know 14%

As might be expected, there are differences among generations, but even the youngest respondents were not keen on Super Bowl ads:
 
"Baby boomers in the poll disapproved of political Super Bowl advertisements more, at 77%, than younger cohorts such as millennials (55%) and Generation Z, defined as those 18-21 years old (43%). … Only 35% of Gen Z respondents to the poll called political Super Bowl ads "very" or "somewhat" appropriate."
 
This is a little strange, given that the mix of sport and politics was seeming to gain traction with Nike's support for Colin Kaepernick (see Strategic CSR – Patriotism and Strategic CSR - ESPN). The trouble is, I don't see how firms can avoid being 'political.' If they were to say we value our customers or our employees, I am guessing people would be OK with that, but it is no less of a political statement. I am sure there are issues that people would rather not be troubled with as they work their way through an unhealthy amount of chicken wings, but that is different from wanting firms to remove values from their advertising. Everything any firm does is grounded in ethics and values and morals—it is just that some firms judge the mood of the country better than other firms and get their ads 'right,' while others misjudge the mood and get their ads 'wrong.' What I like so much about the Coca-Cola ad is that the company knew it was putting something controversial out and it did it anyway. It felt the values were more important and they wanted to stand by them. It is why I love the ad so much. I wish more companies were as brave.
 
Enjoy the football for those of you in the US.
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 
 
Consumers Say Brands Shouldn't Bring Politics to the Super Bowl
By Nat Ives
January 16, 2019
The Wall Street Journal
Late Edition – Final
 

Monday, January 28, 2019

Strategic CSR - The Amazon

I had to read the opening sentence of the article in the url below twice to make sure my eyes weren't deceiving me:
 
"The Trump administration is considering an international challenge to Peru's deforestation of the Amazon, the first time the United States has prepared to act against a trading partner for violating environmental standards in a trade agreement, according to people with knowledge of the proposed action."
 
Then, I wondered why The New York Times had buried the story on p4 of the business supplement. Not only is this a pro-environment move by the current administration, but it is the first time the US has ever enforced a trade agreement to achieve that goal. The article explains it as an attempt to mollify Democrats about enforcement provisions in the new Canada/Mexico/US trade agreement to replace NAFTA:
 
"In a signal to Democrats that he is willing to act aggressively on issues they consider important, the United States trade representative … is considering challenging Peru's decision to dismantle an agency created to stop the illegal harvesting of trees in the Amazon rain forest under the 2007 United States-Peru Trade Promotion Agreement."
 
Either way, however, it seems a big step to take if mollifying the Democrats was the only goal. Maybe the president doesn't know about it, which is why The NYT was burying it. If he was alerted to it, he might change course quickly. As the article notes:
 
"The potential action … comes as President Trump systematically scales back protections of wilderness areas in the United States."
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 
 
In Overture to Democrats, Administration May Challenge Peru on Deforestation
By Glenn Thrush
December 20, 2018
The New York Times
Late Edition – Final
B4
 

Wednesday, January 23, 2019

Strategic CSR - Welcome back!

 
 
Welcome back to the Strategic CSR Newsletter!
The first newsletter of the Spring semester is below.
As always, your comments and ideas are welcome.
 
 
The article in the url below from the end of 2018 puts into perspective the astronomic wealth and earning power of Jeff Bezos:
 
"On his worst day of the year, Jeff Bezos made more in a minute than the average American household makes in a year and five months. He also made more than his lowest paid employees — full-time, part-time, temporary, or seasonal — make in two years and eleven months. At the start of 2018, the Amazon CEO's net worth crossed the 12-digit mark and as the year comes to a close, he's ending up with roughly $132 billion."
 
So, how does Bezos rank against other billionaires?
 
"Bezos is now one-and-a-half-times richer than the second-richest person on earth, Bill Gates, who he surpassed to claim the number one spot for the first time only a year and a half ago."
 
What is interesting is how modest (relatively speaking) his base pay is:
 
"Bezos' base salary is a modest $81,840, and his total compensation (which includes things like security and benefits) is $1,681,840. But his insane wealth is due to the 16% stake in Amazon he owns, which alone is worth about $125 billion today."
 
Even after Amazon's announcement that it will raise its minimum pay to $15 an hour, Bezos' relative earnings are impressive:
 
"If those employees work a 40-hour-week for 52 weeks, that salary comes out to about $30,000 a year — a little over last year's median. On September 4, when his net worth peaked at $168 billion and he had made $84 billion in the year prior, it took him a minute to make $160,000 — it would take his minimum wage employees almost five and a half years to earn the same. And on January 2, when his net worth was at its 2018 lowest, he made $67,790 in a minute; a sum that would take his lowest-paid employees more than two years to make."
 
Even on a bad day for Bezos, our society values his work day to be worth many multiples of his fellow Americans:
 
"Even on his worst day, when the market closed on October 26 and he had lost $11 billion (7.5% of his net worth), Bezos could go to sleep knowing that, on average, he made $87,500 in a minute. The median household income in the U.S. is $60,336 a year according to the U.S. Census Bureau, meaning it takes the typical U.S. household almost 1.5 years to make what Bezos made in one minute. By the end of that year leading up to his worst monetary loss of 2018, Bezos had made a total of $46 billion, which could pay the annual median income for 762,397 U.S. households."
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 
 
Jeff Bezos Got So Rich in 2018 That He Now Makes More Money Per Minute Than You Do in a Year
By Prachi Bhardwaj
December 15, 2018
Money
 

Tuesday, December 11, 2018

Strategic CSR - Microbes

 
This is the last CSR Newsletter of the Fall semester.
Happy Holidays and I will see you in the New Year!
 
 
The website in the url below offers some gift options for the upcoming holiday season. These gifts are for the people in your life who are more scientifically-minded—or, at least, who like the idea of stuffed toy replicas of giant microbes—"a million times actual size!"
 
 
There are microbes of the "cells and body" (e.g., brain cells, antibodies, and plasma), there is a section on "family health" (e.g., chicken pox, ear wax, and diarrhea), and "wildlife" (e.g., dust mites and "brain eating amoeba"). I think one of the best ranges is the "diseases," which includes a "nasty germs" list (e.g., listeria and Lyme's disease), as well as "exotics" (e.g., anthrax and gangrene), and "plagues" (e.g., cholera and Ebola). According to the "New & Popular" section, one of their best sellers is the kidney stone—here it is, in case you were wondering what it looks like:
 
 
 
They're great. I particularly like the flesh-eating diseases page:
 
 
Happy Holidays!
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 

Thursday, December 6, 2018

Strategic CSR - End of the world!

The article in the url below paints a dire picture of where we are, environmentally-speaking (just in case you hadn't noticed):
 
"At the end of 2016, before Puerto Rico's power grid collapsed, wildfires reached the Arctic, and a large swath of North Carolina was submerged under floodwaters, Jonathan Gosling published an academic paper asking what might have seemed like a shrill question: How should we prepare for the consequences of planetary climate catastrophe?"
 
As recent articles and UN reports attest, since then, things have not gotten any better. I am not sure if we should be comforted (or depressed) to learn that there are academics preparing for the worst:
 
"Almost two years later, as the U.S. stumbles through a second consecutive season of record hurricanes and fires, more academics are approaching questions once reserved for doomsday cults. Can modern society prepare for a world in which global warming threatens large-scale social, economic, and political upheaval? What are the policy and social implications of rapid, and mostly unpleasant, climate disruption?"
 
There are two aspects to any response. The first is adaptation – the idea that we will need to adjust our standard of living almost immediately. And, even at the most basic level, this will still constitute substantive change:
 
"In the language of climate change, 'adaptation' refers to ways to blunt the immediate effects of extreme weather, such as building seawalls, conserving drinking water, updating building codes, and helping more people get disaster insurance. The costs are enormous: The U.S. government is considering a 5-mile, $20 billion seawall to protect New York City against storm surges, while Louisiana wants to spend $50 billion to save parts of its shoreline from sinking. Poorer countries could require $500 billion a year to adapt, according to the United Nations."
 
But, the most pessimistic academics are thinking of the concept of adaptation in more radical terms – a "deep adaptation agenda":
 
"… that means not only rapid decarbonization and storm-resistant infrastructure, but also building water and communications systems that won't fail if the power grid collapses and searching for ways to safeguard the food supply by protecting pollinating insects."
 
What the article does not discuss, however, is the second aspect of any response to climate change, innovation – the idea that we will need to develop new technologies to stop things from getting any worse and, in terms of the most ideal outcome, start reversing the worst of the damage that has already been done. The danger, in terms of a worst case scenario, is that we will cross a tipping point that means the process becomes non-reversible:
 
"Propelling the movement are signs that the problem is worsening at an accelerating rate. In an article this summer in the Proceedings of the National Academy of Sciences, 16 climate scientists from around the world argued that the planet may be much closer than previously realized to locking in what they call a 'hothouse' trajectory—warming of 4C or 5C (7F or 9F), 'with serious challenges for the viability of human societies.'"
 
Either way, the outlook is pretty bleak:
 
"Jem Bendell, a professor at the University of Cumbria who popularized the term deep adaptation, calls it a mix of physical changes—pulling back from the coast, closing climate-exposed industrial facilities, planning for food rationing, letting landscapes return to their natural state—with cultural shifts, including 'giving up expectations for certain types of consumption' and learning to rely more on the people around us. 'The evidence before us suggests that we are set for disruptive and uncontrollable levels of climate change, bringing starvation, destruction, migration, disease and war. … 'We need to appreciate what kind of adaptation is possible.'"
 
While this might be a worst case scenario and, to be sure, there is significant disagreement about the extent of the impact of a changing climate, it seems worth at least having a discussion about what the worst scenario might look like. Better to be prepared and then have to do less, than thinking we will somehow muddle through and, instead, be caught by surprise.
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

 

New Climate Debate: How to Adapt to the End of the World

By Christopher Flavelle
September 26, 2018
Bloomberg Businessweek
 

Monday, December 3, 2018

Strategic CSR - Patagonia

Leave it to Patagonia to fight the good fight. I love the fact that this firm is run more like a social activist organization than a for-profit corporation:
 
"Outdoor clothing company Patagonia Inc. has committed the $10 million it saved from federal tax cuts championed by President Donald Trump to nonprofit groups who work on conservation and climate issues."
 
And the justification demonstrates the firm's commitment to the greater good. According to the firm's CEO, Rose Marcario:
 
"'Taxes protect the most vulnerable in our society, our public lands and other life-giving resources,' she wrote. 'In spite of this, the Trump administration initiated a corporate tax cut, threatening these services at the expense of our planet.'"
 
Patagonia is the ultimate anti-profit firm that seems to make money in spite of itself:
 
"Patagonia has linked its brand with conservation, such as its 2011 Black Friday advertisement telling consumers not to engage in empty consumption by purchasing its jackets. In 2017, it launched a program called 'Worn Wear,' which allows customers to pay for repairs to old items or trade them in for store credit."
 
Now, if we could just get more customers to invest in the Patagonia business model by shopping there, we might be working towards a more sustainable economy.
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 
 
Patagonia Donates $10 Million Trump Tax Savings to Green Groups
By Eric Roston
November 29, 2018
Bloomberg Businessweek
 

Thursday, November 29, 2018

Strategic CSR - Social credit

The radio segment in the url below details China's exploration of a "social credit score" for all of its citizens:
 
"China is testing a new plan. Its stated aim is to make it easier for citizens to do business and help them to trust each other more. It's similar to the American credit score, but much more sweeping. It tracks far more than financial transactions and is called the Social Credit score."
 
To suggest this idea is "similar to the American credit score" is to understate its implications. The article explores the background to the idea in some detail:
 
"… a lack of trust in people and businesses has held China's economy back. So when China decided to make a centralized score, the government turned to people's behaviors to extrapolate trustworthiness from them. And you know who has lots of data on how people behave? Companies, especially big companies like Alibaba. That is China's version of Amazon. Alibaba owns one of the largest online payment systems in the country and has its own credit scoring system called Sesame Credit. So the government has been working with Alibaba in the development of people's Social Credit score."
 
So, in essence, the government is planning to use the company's data to track everyone's online behavior (cross-referencing payment history with purchase patterns) and develop a proxy for how trustworthy a person is:
 
"The way people are scored, it's not simply whether they miss a bill. It could be what they buy online. I mean, I think the example that the head of Sesame Credit publicly gave the press was, you know, if you buy nappies, you're responsible. So your score will go up. But if you're buying video games, you're lazy, so your school will go down."
 
Aside from the assumptions that are being made in linking purchase patterns to personality, it is the detail of what is being proposed that is striking. This is particularly so in terms of the potential consequences:
 
"The Social Credit system is not scheduled to be rolled out nationally until 2020, but we got a glimpse into how it might work because China is testing out versions of it in pilot cities across the country. … everyone in the city starts with a score of 1,000. … And there's a whole letter grade system behind the points. So from 960 to 1,000-plus points is an A, 850 to 955 points is a B. Eight-forty-nine to 600 is a C. And this is considered a warning level. Below that, you are a D. You're labeled an untrustworthy citizen. You can gain or lose points for all kinds of reasons. Get a DUI? That is an automatic downgrade to a B."
 
Moreover:
 
"And if you spread rumors online – minus 50 points."
 
And, what are the consequences for being labelled "an untrustworthy citizen"?
 
"If your Social Credit score is low, or if you end up on something called the list of untrustworthy people, you can be banned from certain kinds of travel or even subjected to public shaming. Life gets hard."
 
In spite of the creepy nature of all of this, there are some broad societal benefits to coercive behavior modification:
 
"Before the pilot program, being a pedestrian in Rongcheng was just terrifying. You basically had to hurl yourself across the street when you saw a break in traffic. But now, after the changes have happened, the cars, they will wait for you."

Additional information on this topic can be found here and the idea even has its own Wikipedia page here. Failing that, you can just ask Facebook for a printout of all the data they have on you – it kind of works the same way! :-)
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 
 
China Tests a 'Social Credit Score'
October 31, 2018
National Public Radio
 

Monday, November 26, 2018

Strategic CSR - AC

The editorial in the url below poses an interesting question:
 
"What is the single most effective way to reduce greenhouse-gas emissions?"
 
As was no doubt intended by the nature of the question, the answer may well surprise you:
 
"Go vegetarian? Replant the Amazon? Cycle to work? None of the above. The answer is: make air-conditioners radically better."
 
It seems there is plenty of low-hanging fruit in terms of reducing the pollutants associated with air conditioning units:
 
"On one calculation, replacing refrigerants that damage the atmosphere would reduce total greenhouse gases by the equivalent of 90bn tonnes of CO₂ by 2050. Making the units more energy-efficient could double that. By contrast, if half the world's population were to give up meat, it would save 66bn tonnes of CO₂. Replanting two-thirds of degraded tropical forests would save 61bn tonnes. A one-third increase in global bicycle journeys would save just 2.3bn tonnes."
 
The reason for this low-hanging fruit seems to be mostly because the AC industry is largely ignored in most countries—neither regulated nor sufficiently profitable to attract much attention from firms. This means, of course, that the worst pollutants have not been controlled, while the competitive pressures to innovate have also been lacking. This becomes apparent when you compare the rate of progress with products in more heavily regulated and competitive industries:
 
"Air-conditioning is one of the world's great overlooked industries. Automobiles and air-conditioners were invented at roughly the same time, and both have had a huge impact on where people live and work. Unlike cars, though, air-conditioners have drawn little criticism for their social impact, emissions or energy efficiency. Most hot countries do not have rules to govern their energy use."
 
The danger lies not only with the air conditioners that we have, however, but those that are coming in the very near future:
 
"In the next ten years, as many air-conditioners will be installed around the world as were put in between 1902 (when air-conditioning was invented) and 2005."
 
Apart from obvious solutions, like continuing to make efficiency improvements and replacing old units, the biggest suggested change in the editorial requires legislation and, therefore, political action, particularly around the coolants used in these machines:
 
"One category of these, hydrofluorocarbons, is over 1,000 times worse than carbon dioxide when it comes to trapping heat in the atmosphere. An international deal to phase out these pollutants, called the Kigali amendment, will come into force in 2019. Foot-draggers should ratify and implement it; America is one country that has not done so."
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 
 
Rebirth of the cool
Editorial
August 25, 2018
The Economist
Late Edition – Final
10