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

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Monday, May 11, 2020

Strategic CSR - Sustainable Value Creation

This is the last CSR Newsletter of the Spring semester.
Have a great summer and I will see you in the Fall!
Over the summer, I am happy to announce I will have a new book published by Routledge, titled Sustainable Value Creation. The book's website was recently launched:
This is the second edition of a book that I had previously published as part of the UN PRME book series at Business Expert Press. It is much shorter than my Sage book and not a traditional textbook format. I use it in my Executive MBA course and find the shorter format works well. The cover is below and the TOC is below that, FYI. If anyone has any questions, please let me know.
Hope you all have a great summer.
Take care
David Chandler
© Sage Publications, 2020
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Sustainable Value Creation: ToC
Introduction:  Corporate Social Responsibility
  • Defining CSR
  • Measuring CSR
  • Profiting from CSR
  • Sustainable Value Creation

Principle I:  Business is social progress
  • For-profit firms
  • Business is ethical and moral
  • Self-interest and public interest

Principle 2:  Shareholders do not own the firm
  • Limited liability
  • A legal person
  • The business judgment rule
  • Stakeholders, not shareholder

Principle 3:  Prioritizing competing stakeholder interests is difficult
  • Stakeholder theory
  • Prioritizing stakeholders
  • A decision-making model

Principle 4:  CSR is a stakeholder responsibility
  • Corporate social responsibility
  • Corporate stakeholder responsibility
  • Stakeholder democracy 

Principle 5:  Market-based solutions are optimal
  • Imperfect markets
  • Unintended consequences
  • Behavioral economics

Principle 6:  Profit = total value
  • Economic value + social value
  • Profit optimization
  • Production value and consumption value

Principle 7:  The free market is not free
  • Free markets
  • Externalities
  • Lifecycle pricing

Principle 8:  Only business can save the planet
  • Sustainability
  • Waste
  • Materialism
  • Scale

Principle 9:  Value creation is not a choice
  • Not philanthropy, but core operations
  • Not caring capitalism, but market capitalism
  • Not sharing value, but creating value

Principle I0:  The business of business is business
  • Milton Friedman
  • The purpose of the firm

Conclusion:  Sustainable Value Creation
  • Defining SVC
  • Enlightened management
  • Final thoughts

Thursday, May 7, 2020

Strategic CSR - COVID-19 (II)

As Governor of the Bank of England, from 2013-2020, Mark Carney did much to focus attention on the growing financial implications of climate change for businesses (and, by extension, governments). The article in the url below shows how he continues to use his platform (post-BofE) to advance related issues—in this case, discussing the potential economic implications of COVID-19. In particular, he touches on a debate I have long struggled with—determining where 'value' ends and 'values' begin:
"Value will change in the post-covid world. On one level, that's obvious: valuations in global financial markets have imploded, with many suffering their sharpest declines in decades. More fundamentally, the traditional drivers of value have been shaken, new ones will gain prominence, and there's a possibility that the gulf between what markets value and what people value will close."
Carney was invited to write this column by The Economist and uses the opportunity to advance an idea originally put forward by the philosopher, Michael Sandel:
"This points to a final, deeper issue. … in recent decades, subtly but relentlessly, we have been moving from a market economy to a market society. Increasingly, to be valued, an asset or activity has to be in a market. For example, Amazon is one of the world's most valuable companies, yet the Amazon region appears on no ledger until it is stripped of its foliage, and converted to farmland. The price of everything is becoming the value of everything."
Carney sees the shared commitment and sacrifice that characterized the overwhelming public response to COVID-19 as an indication that this imbalance may be shifting:
"This crisis could help reverse that relationship, so that public values help shape private value. When pushed, societies have prioritised health first and foremost, and then looked to deal with the economic consequences. In this crisis, we know we need to act as an interdependent community not independent individuals, so the values of economic dynamism and efficiency have been joined by those of solidarity, fairness, responsibility and compassion."
At a more fundamental level:
"All this amounts to a test of stakeholder capitalism. When it's over, companies will be judged by … how they treated their employees, suppliers and customers, by who shared and who hoarded. After the covid crisis, it's reasonable to expect people to demand improvements in the quality and coverage of social support and medical care, greater attention to be paid to managing tail risks, and more heed to be given to the advice of scientific experts."
Hmmm. I hope so, but we'll see. The key, of course, is the extent to which we will remember and will reward those "who shared" and punish those "who hoarded." The ultimate test, as Carney argues, is and will continue to be climate change:
"The great test of whether this new hierarchy of values will prevail is climate change. After all, climate change is an issue that (i) involves the entire world, from which no one will be able to self-isolate; (ii) is predicted by science to be the central risk tomorrow; and (iii) we can only address if we act in advance and in solidarity."
Take care
David Chandler
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Putting values above valuations
By Mark Carney
April 18, 2020
The Economist
Late Edition – Final

Monday, May 4, 2020

Strategic CSR - Disney

The article in the url below says something interesting about our society. At least, it says something about Disney, the company, and the place it holds in people's minds (and hearts):
"At 7:30 in the morning on a recent Saturday, 14 people gathered on the 10th floor of Disney's Riviera Resort in Orlando, Fla. … These 14 adults — a mix of stay-at-home moms, young professionals without children and middle-aged parents from across the country — aren't just Disney fans. They are now considered experts."
They are experts because they had been selected and trained for part-time jobs helping holidayers plan their vacations with Disney. But, they are not only experts – these people are serious fans. Given the current shut-down of, essentially, the whole vacation industry, Disney will need fans like this when everything starts back up again:
"During breakfast, Mickey Mouse walked into the restaurant and most members of the group rushed to give him a hug and take photos. When Minnie Mouse arrived, others got up, complimented her dress, hugged her and asked for pictures. Group shots, selfies and posed photos were all taken. By 8:15 a.m., when Donald and Daisy Duck arrived, the panelists were too excited to contain themselves — they clapped and danced to the music as the characters put on a performance."
And, because there are so many fans out there, this was not an easy job to get. First, there was the training:
"The group had been together in Orlando since Wednesday, receiving training about how to be panelists. They learned how to ask each other for help, how to answer a question politely, how to urge someone to try something new."
But before that, there was the application process:
"They beat out more than 10,000 other applicants to become members of the 2020 Disney Parks Moms Panel, a website where people planning to go on a Disney cruise, or visit a Disney park or Disney Vacation Club in the United States, can ask questions and get responses from these experts. The company will announce the panelists on Wednesday morning. Eleven of this year's new panelists are women, three are men and two are not parents. The panel also has an additional 28 panelists returning from previous years."
OK, that's a little weird but, so far, so good, right? Or, maybe it gets weirder. What is interesting about this particular job is not so much what is expected of each employee, but their compensation package:
"The panelist position, while a Disney contractor role with an intensive application process, is not paid. In exchange for answering these questions every week, the panelists get a free stay at a Disney park or vacation club of their choice for five nights and can bring three people along. For this group, the trip is more than enough payment."
The idea that avid 'fans' would work for Disney for free reminded me of a Southwest case that I teach in my strategy class where the firm's passengers routinely take paid holidays from their jobs to help Southwest recruit new flight attendants. When asked why in the case, one respondent says, "Well, this is my airline, too." I am always left amazed that you just can't buy an endorsement like that. Who would do that for United, American, or Delta? And, what does it say about Southwest (and Disney for that matter) that that is the case? At some level, it has to speak to the culture the organization has created, combined with the meaningfulness that we crave in our lives. Those firms that can create significant overlap between the way we work and the way we live are doing something special:
"For [the] panelists, who like Dr. Chlon work full-time, working for Disney in this capacity is something of an honor. It's also an opportunity to contribute to a company that has sentimental and nostalgic meaning."
And that enthusiasm is conveyed through these volunteers:
"This is why the panelists aren't paid, according to [Leanne O'Regan, director of public relations for Disney Parks, Experiences and Products]. There is an 'authenticity of getting advice from someone who isn't being paid to give you advice,' she said. 'We want them to be honest when they answer questions.'"
On the other hand, however, this story also reminded me of the AoM meeting that was held a few years ago in Orlando at Disney World, and what an unmitigated disaster it was. Disney is, if nothing else, a company created by management consultants. And their attempts to get us to part with more money than we would otherwise voluntarily do was so transparent as to be insulting. Maybe it is the cynic in me, but every time someone at Disney told me to have "a wonderful Disney day," my heart sank. Clearly, however, many people out there are not management professors and simply love what it is that Disney does:
"This year, Disney put out the call for applications in August and kept the application portal open for one week in September. Many people apply for years before becoming panelists. Tamela Hansen, 45, finally made it onto the panel after 12 years of applying. Ms. Hansen said that she feels like she has been preparing to be a panelist for her whole life; she knew her time would eventually come. After all, she has been to Disney World from Alabama, where she grew up and currently lives, at least 100 times."
My question, therefore: Is Disney different from Southwest, or are they both tapping into something similar and fundamental? If so, why do I (largely) enjoy interacting with Southwest (apart from some of those annoying safety videos on YouTube), while Disney makes me feel weird?
Take care
David Chandler
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Work for Disney without Pay? 10,000 Applied
By Tariro Mzezewa
January 19, 2020
The New York Times
Late Edition – Final
TR1, TR8

Wednesday, April 29, 2020

Strategic CSR - Meat

The article in the url below raises the possibility of extending the idea of a Pigovian tax (a tax on an activity that causes a negative consequence – i.e., a sin tax) to eating meat. In other words, meat would be taxed as a 'sin' in the same way that cities and states are beginning to tax a range of products, from plastic bags (e.g., Strategic CSR - Kenya) to sugar (e.g., Strategic CSR – CSR Threshold):
"Meat could be a target for higher taxes given criticism of the industry's role in climate change, deforestation and animal cruelty. … The idea is still its infancy and faces a lot of opposition from farming groups, but it's emerging as a trend in Western Europe. … If taxes gain traction, it could encourage more people to switch to poultry or plant-based protein and help drive the popularity of meat substitutes."
Such a tax has been advanced as a way to address animal welfare, as well as reduce meat consumption:
"In Germany, some politicians have proposed raising the sales tax on meat products to fund better livestock living conditions. A poll … showed a majority of Germans, or 56.4%, backed the measure, with more than a third calling it 'very positive' and some 82% of voters for the environmentalist Greens in favor."
This article coincides with another report from the IPCC recently on climate change and the land (, documenting the waste and damage associated with our current farming/land-use methods:
"The loudest argument against meat at the moment is not based on health but climate change. In a report this month, the United Nations said agriculture, forestry and other land use contributes about a quarter of greenhouse emissions."
In the face of the scale of the problem, a tax on red meat seems as though it will not get us all the way to there from here. The principle is important, however. If you believe that the market is the most effective means of allocating scarce and valuable resources (which I do), then sin taxes are the way to account for negative externalities in the pricing of products. Get the pricing right, and demand/supply will balance at the 'appropriate' level. In my opinion, this lifecycle pricing (together with technological innovation) is the only way we will combat climate change and have some hope of preserving a planet on which we can live.
Take care
David Chandler
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Red Meat Could Be the Next Sin Tax After Sugar, Fitch Says
By Olivia Konotey-Ahulu
August 13, 2019
Bloomberg Businessweek

Monday, April 27, 2020

Strategic CSR - Trees

The article in the url below demonstrates the danger of relying on carbon offsets to work our way towards carbon neutrality:
"Up to 90% of [11 million] saplings planted in Turkey as part of a record-breaking mass planting project may have died after just a few months, according to the country's agriculture and forestry trade union."
The problem comes when the people driving such projects bring their good intentions, but lack the necessary expertise:
"The government-backed programme broke the world record for the most trees planted in one hour in a single location, with 303,150 saplings planted in the northern Anatolian city of Çorum. The head of the union claimed, however, that 90% of the saplings his teams have inspected so far have died because of insufficient water. [A spokesperson] attributed the deaths to the saplings being planted at 'the wrong time' and 'not by experts,' as well as a lack of rainfall."
What would be interesting is to see how this tree planting project was accounted for at the time it was initiated. If, for example, 11m trees are expected to absorb a certain amount of carbon over their lifetimes, that amount of carbon can either be offset in one lump today or it can be amortized over the expected life of the trees. The latter method is more accurate (and honest) and should be weighted toward the end of the time period, because older, bigger trees absorb more CO2 than younger, smaller trees. Adopting this approach avoids falsely accounting for carbon that has yet to be removed from the atmosphere; it also allows for eventualities such as the trees dying and, therefore, never being able to reach their full, carbon-absorbing potential:
"The dispute adds to the global debate about mass tree-planting, with critics pointing out the sometimes poor survival rate of mass-planted saplings, and the use of such projects to 'greenwash' states and companies with otherwise poor environmental records."
If firms continue producing carbon at their current rates, then falsely accounting for carbon absorption will not make much difference. But, by planting trees that die before they get to absorb the carbon that has been 'allocated' to them, not only are we doing nothing to reduce the future damage of climate change, we are also kidding ourselves that we are making any kind of meaningful progress.
Take care
David Chandler
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Most of 11m trees planted in Turkish project 'may be dead'
By Sami Kent
January 30, 2020
The Guardian

Thursday, April 23, 2020

Strategic CSR - Jeremy Grantham

Following-on from Tuesday's newsletter, the article in the url below challenges the idea that an investment fund that excludes certain industries cannot be as productive as one that has no such restriction. In particular, the article reports on research by Jeremy Grantham looking at the effect on returns of excluding specific industries from funds he created:
"Mr Grantham checked the data to find out whether, and how much, omitting the stocks of any industry over three decades would have hurt a hypothetical investor. He created synthetic portfolios that left out each of the ten broad stockmarket sectors and compared their returns with the market as a whole."
The results were surprising, to say the least:
"[Excluding specific industries] made hardly any difference. The S&P index returned an average of 9.71% annually between 1989 and 2017; the index excluding energy stocks returned 9.74%. The range of returns, from the worst portfolio to the best, was just 0.5 percentage points."
So surprising, that he double-checked his results:
"This finding seemed like it might be a fluke. But a further check, going back to 1925, had a similar outcome. The spread between the best and worst portfolios was 0.54 percentage points; there was hardly any gap between the portfolio with energy stocks and without them. … The market, it seems, has done rather a good job over time of pricing stocks so that no broad industry group yields abnormal returns."
Grantham's conclusion is that, since there is no effective difference in excluding specific industries, there is no (financial) reason not to exclude oil stocks from any fund, or divest any funds of existing investments in oil stocks. On the contrary, given the risks facing the oil and gas industry in the (near) future, Grantham recommends that there might be very good reason to exclude them:
"Oil demand has already peaked in rich countries and, as climate fears grow and green technologies become cost-effective, it will eventually peak worldwide. But not everyone is keenly focused on this prospect. Scepticism regarding climate science is common in America. To the extent that sceptics are investors, and are betting on business as usual, at least some of the risks facing Big Oil may not be in the price. Investors might, for instance, miscalculate the speed of transition to greener energy. Advances in materials science and battery technology are making electric vehicles a cost-effective alternative to petrol-fuelled cars, Mr Grantham reckons. Other potential hazards face oil companies, including increased regulation and costly lawsuits. In other industries, such as tobacco, firms have been forced to pay up when found to have knowingly sold harmful products. He thinks the oil industry faces a similar reckoning."
He goes further:
"Is there also a moral case for disinvestment? … Bill Gates, a software mogul and philanthropist, has argued that people should not waste idealism and energy on a policy that will not cause any reduction in the use of fossil fuels. What matters are incentives set by governments: tax breaks to fund research in green energy; tax rises to discourage carbon use. But this misses the point, says Mr Grantham: 'You have to make the oil industry a pariah for bad behaviour.' Only then will politicians feel the need to act."
Take care
David Chandler
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Inessential oils
By Buttonwood
January 11, 2020
The Economist
Late Edition – Final

Tuesday, April 21, 2020

Strategic CSR - 50th Earth Day

With a nod to tomorrow's 50th anniversary of Earth Day, the newsletters this week focus on the field of ESG/SRI investing. Today, the article in the url below offers a broad critique by the WSJ columnist (James Mackintosh) who occasionally returns to this issue. Whenever he does, I find his perspective insightful because he tends to cut through a lot of the fluff that surrounds ESG/SRI (created largely by the investing companies trying to jump on the bandwagon). This column is no exception – I find the central conundrum that he presents fascinating:
"Much of ESG is about what economists call externalities: things such as carbon emissions that are free to the emitter but costly to wider society. Making money from pricing externalities is a matter of identifying which ones will lead to government, consumer or worker action and which ones won't."
The comment may seem cynical, but I think reflects how many investors (whether professional or layperson) think and act. If so, it captures an economic reality that is missing from most CSR commentary around ESG/SRI investing. It also takes into account the inconsistent approach from politicians (and all stakeholders, broadly speaking) to public policy:
"Treating your workers badly might help your profits, but it is likely to backfire in the long run as they leave for other employers. Using cheap ingredients that poison your customers, even if it seems to be legal, leads to lawsuits or government crackdowns."
The challenge, of course, is to identify when the backlash will come (and how strong it will be):
"It took decades for government to act on evidence that tobacco was killing people but just a few years to move against vaping. Alcohol, meanwhile, remains a great business despite the damage it does."
The result is that, although the amount of capital flowing into SRI/ESG funds is increasing rapidly (even more so in the current political environment), it is not clear it is achieving the goals that are intended for it. If so, then the investment companies are arguably deceiving many who are trying to channel their investments in ways that reflect their values. As Mackintosh notes at the beginning of this column:
"It is hard to move in the world of investment without being bombarded by sales pitches for running money based on 'ESG,' or environmental, social and governance criteria. The trouble is that few involved seem to agree on how it works (or, more to the point, doesn't)."
Take care
David Chandler
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A Socially Responsible Strategy Can be Tricky
By James Mackintosh
November 13, 2019
The Wall Street Journal
Late Edition – Final

Friday, April 17, 2020

Strategic CSR - Business Roundtable (III)

Here is an extra newsletter for this week due to the article in the url below, which is a follow-up to last Fall's Business Roundtable statement on stakeholder democracy (see Strategic CSR – Business Roundtable and Strategic CSR – Business Roundtable (II)). The purpose here is to check-in with how some of the statement's signatories are doing in light of the COVID-19 pandemic. In short, not good:
"Last August, the chief executives of 181 of America's largest corporations signed a document pledging their commitment to run their companies for the benefit of workers and communities, and not just for shareholders. … Today, with the planet under assault from a pandemic that has delivered the most profound economic pain since the Great Depression, key signatories are furloughing employees, paying dividends to shareholders and provoking complaints from workers that they aren't adequately protected from danger."
Some would argue this is not the best time to measure any shifts in the priorities of the firms that signed-up to the statement. Others would no doubt note that the responses of firms has varied (the article features Marriott prominently), with some signatories taking a broader stakeholder perspective. The article, however, is firm in its conclusions:
"Their actions expose the reality that the rhetoric of the Business Roundtable did not alter the decisive question of American capitalism — where the money goes. In the run-up to the crisis, many companies used cash to buy back their shares and pay out dividends, rewarding shareholders, while leaving themselves with fewer resources to aid workers when disaster struck."
Interestingly, the article calls out the main barrier to substantive change:
"So long as executive pay remained tied to stock prices, shareholder interest would remain supreme."
Have a good weekend.
David Chandler
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A Vow by Big Business Proves Too Hard to Keep
By Peter S. Goodman
April 14, 2020
The New York Times
Late Edition – Final
B1, B4

Wednesday, April 15, 2020

Strategic CSR - Buses

Following on from Monday's newsletter, the article in the url below presents the results of some data analysis that I found surprising:
"Sometime around 2013, bus ridership across much of the country began to decline. It dropped in Washington, in Chicago, in Los Angeles, in Miami. It dropped in large cities and smaller ones. It dropped in places that cut service, and in some that invested in it. It dropped in Sun Belt cities where transit has always struggled to compete with the car, and it dropped in older Eastern cities with a long history of transit use. By late 2019, through nearly seven straight years of decline, national bus ridership in America was at its lowest level since the mid-1970s, a trend that has left service already weakened as transit agencies brace for a public health crisis."
A graphic in the article reveals the extent of the decline in specific cities:
As always, attempting to work out what caused such a decline is challenging:
"The answer probably lies deep in a number of trends: the rise of on-demand technology, the changing nature of work, the evolution of e-commerce, the redevelopment of city centers, the influx of young professionals, and the suburbanization of the poor. Many seismic shifts in urban life are reflected in this one data point — the broad decline of bus ridership. … That's worrisome both for the remaining riders and for cities that will need strong mass transit to meet their climate goals."
One variable that needs to be controlled for is overall traffic – commuting traffic, in particular. The article suggests that, throughout the period under study, the economy was strengthening, which means there should have been more workers with more jobs requiring them to commute. But, if commuting traffic was declining at a faster rate than public transportation (perhaps, as younger workers move downtown instead of living in the suburbs) then, relatively, public transportation is capturing a higher percentage of the commuting population, even though overall numbers are declining. If commuting traffic has been flat or increasing, however, that is a more worrying situation:
"In Minneapolis, bus ridership began declining in 2014 and has fallen by 26 percent. Some bus trips appear to have shifted to a newly opened light rail line. But Uber and Lyft have expanded in the city over this same time. Bike commuting has increased. The transit agency has also detected an uptick in car ownership in neighborhoods historically well served by buses. And in a strong economy, Metro Transit struggled to replace a generation of retiring bus operators, hampering service. Workers have simply had more options, as agencies around the country have found."
One shift over this period that was not accounted for in the analysis is the influence of ride-hailing apps, like Uber or Lyft. As I have noted previously, many suspect that part of the business model of these companies is to slowly under-price public transportation (or over-convenience passengers) and, then, after all the buses have been removed from our streets, they will be able to increase prices and riders will have no other choice (see Strategic CSR – Uber):
"Studies have been less conclusive on the effect of ride-hailing companies, in part because their user data hasn't been accessible to researchers. But preliminary findings from a continuing project through the Transportation Research Board show that the largest declines in transit ridership at the metro level can be attributed to the introduction of ride-hailing services. And in the largest cities, ride-hailing has affected buses more than rail."
In spite of this, I found these results surprising because my idiosyncratic perception is that public transport is increasing. But, I live in the middle of a city, and the fact that the numbers are down across most metro areas in the U.S. is compelling (and concerning). And, if we end up working more at home after this pandemic, we should expect these declines to increase.
Take care
David Chandler
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The Mystery of the Missing Bus Rider
By Emily Badger and Quoctrung Bui
March 13, 2020
The New York Times

Monday, April 13, 2020

Strategic CSR - Uber

The CSR Newsletters this week are on the topic of transportation, public and private, in and around our cities.
One of the many advantages Uber was supposed to bring was the reduction in traffic around our cities. If we all didn't need to buy cars, the argument went, congestion would drop, we could find something more useful to do with all the space taken up by parking spots, we would arrive for appointments on time (because we would not need to search for parking), and, of course, the air would get cleaner as emissions dropped. As noted in the article in the url below:
"Five years ago, Travis Kalanick was so confident that Uber Technologies Inc.'s rides would prompt people to leave their cars at home that he told a tech conference: 'If every car in San Francisco was Ubered there would be no traffic.'"
Well, file this under the bulging folder of unintended consequences, but you may not be too surprised to find out that it has not worked out quite like that:
"Today, a mounting collection of studies shows the opposite: Far from easing traffic, Uber and its main rival Lyft Inc. are adding to congestion in numerous U.S. downtowns."
The article begins to quantify the effect of ride-hailing cars on our city streets and it is not good. For example:
"In New York, for-hire vehicle trips more than doubled from 2010 to 2018, while travel speed in lower Manhattan slowed 23%."
Here are some more select statistics quoted:
  • 2.5 miles an hour: "Average downtown San Francisco traffic speed slowdown due to ride-hailing apps between 2010 and 2016."
  • About 40%: "The share of time ride-hailing cars in California and New York City cruise without passengers."
  • 77%: "Share of ride-hailing trips that are requested for one party only, rather than pooled, in Chicago's downtown."
  • 309%: "The rise in ride-hailing trips starting or ending in downtown Chicago between 2015 and 2018."
Of course, none of this includes the effect Uber has had on the people who drive these cars for us, the conditions they work under, and whether the rise of contract workers simply exacerbates inequality (e.g., see Strategic CSR – Uber). Now, how do we put that genie back in its bottle?
Take care
David Chandler
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The Ride-hail Utopia That Got Stuck in Traffic
By Eliot Brown
February 15-16, 2020
The Wall Street Journal
Late Edition – Final
B1, B6

Thursday, April 9, 2020

Strategic CSR - Farming subsidies

The article in the url below summarizes a report by the Food and Land Use Coalition (, which demonstrates the scale of the market distortions currently being distributed by governments in the agricultural sector:
"The public [worldwide] is providing more than $1m per minute in global farm subsidies."
What is worse is that almost none of these subsidies are promoting sustainable production processes. On the contrary, they are encouraging extremely damaging practices:

"Just 1% of the $700bn (£560bn) a year given to farmers is used to benefit the environment, the analysis found. Much of the total instead promotes high-emission cattle production, forest destruction and pollution from the overuse of fertiliser."
The best way to do this, the report argues, is to redirect these subsidies to more sustainable farming practices:
"The security of humanity is at risk without reform to these subsidies, a big reduction in meat eating in rich nations and other damaging uses of land, the report says. But redirecting the subsidies to storing carbon in soil, producing healthier food, cutting waste and growing trees is a huge opportunity, it says."
"A series of major recent reports have concluded the world's food system is broken. It is driving the planet towards climate catastrophe while leaving billions of people either underfed or overweight, 130 national academies of science and medicine concluded in November. Another report found that avoiding meat and dairy was the single biggest way to reduce your environmental impact on the planet, with livestock using 83% of farmland to produce just 18% of calories. The 'planetary health diet' published by scientists in January requires an 80% cut in the red meat eaten by Europeans and North Americans. Adopting this diet in coming decades would mean 60% of today's pasture could be used for wildlife or other purposes, an area similar to the size of Brazil."
In spite of these warning signs, the report:
"… couldn't find any examples of governments using their fiscal instruments to directly support the expansion of supply of healthier and more nutritious food. Overall, [the report] said the damaging way the world currently produces food and uses land causes $12tn a year in hidden costs to the environment, human health and development."
The report looked at agricultural subsidies worldwide, but also covered food production and the R&D that goes into improving the food supply chain:
"The subsidy analysis in the report was done by the International Food Policy Research Institute, using OECD data. It found three-quarters of the $700bn annual subsidy is paid directly to farmers and that 15% supports measures such as research on higher yielding crops and road building in rural areas. It analysed subsidies in 51 nations and includes most, but not all, of global subsidies."
While the report is highly critical of existing government support for big-ag, it finishes on a high note by mentioning some examples of the (rare) good practices that it found:
"Benefits from reforming subsidies has been seen in some places. Farmers in the European Union have reduced greenhouse gas emissions from fertiliser by 17% while yields rose, and China is phasing out support for fertilisers."
Take care
David Chandler
© Sage Publications, 2020
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$1mn a minute: The farming subsidies destroying the world
By Damian Carrington
September 16, 2019
The Guardian

Monday, April 6, 2020

Strategic CSR - Democracy

The article in the url below reports on an interesting experiment in France aimed at a limited form of direct democracy:
"A nurse, a roofer, an electrician, a former fireman, a lycée pupil, a photographer, a teacher, a marketing manager, an entrepreneur and a civil servant. Sitting on red velvet benches in a domed art-deco amphitheatre in Paris, they and 140 colleagues are part of an unusual democratic experiment in a famously centralised country."
The group was formed as part of Emmanuel Macron's response to the Yellow Jackets movement, a citizen's uprising protesting against increased gasoline taxes, specifically, but growing income and wealth inequality, in general:
"Their mission: to draw up measures to reduce French greenhouse-gas emissions by at least 40% by 2030, in line with an EU target that is otherwise in danger of being missed. … Six months ago, none of them had met. Now, they have just one month left to show that they can reinvent the French democratic process—and help save the planet."
The "citizen's climate convention," as it is known, does not appear to have its own webpage, but it does have a Wikipedia page. The convention consists of a randomly-selected group of citizens who have been tasked with finding alternatives to the gas tax rise, which was so soundly rejected by French citizens last year:
"On March 6th the 'citizens' climate convention' was due to begin its penultimate three-day sitting, the sixth since it began work last October. The convention is made up of a representative sample of the French population, selected by randomly generated telephone numbers. … In response to the demand for less top-down decision-making, [Macron] first launched what he grandly called a 'great national debate,' which took place a year ago. He also pledged the creation of a citizens' assembly. It is designed to focus on precisely the conundrum that provoked the original protests against a rise in the carbon tax on motor fuel: how to make green policy palatable, efficient and fair."
By all accounts, it is a serious exercise:
"Divided into five working groups—to discuss such topics as transport, housing or food—they then began working on proposals that could actually be put into practice. Scientists, farmers, businessmen, urban planners and over 100 other witnesses were summoned. In January they invited Mr Macron, who spent over two hours answering questions and urged them to be 'precise' and 'bold.' In an over-lit basement meeting room on a recent Friday evening, small groups could be found poring over documents, discussing the feedback given by legal experts on their initial ideas. Five lawyers are on hand to help shape proposals into legally enforceable text."
It will be interesting to see whether the convention can generate some practical and meaningful policy recommendations. Due to the fact that the group was randomly-selected, it consists of people across the ideological spectrum and, as such, includes a representation of climate sceptics. While the ideological differences remain, perhaps the absence of special interests or lobbying groups can help cut through the inertia that has paralyzed the conventional political process on this issue:
"Despite such differences, over 90% of the original delegates are still taking part. … the gravity of the subject, along with Mr Macron's backing, have been crucial in persuading delegates to invest long hours and weekends away from home in the exercise. It is a gamble nonetheless. Next month, the assembly will send its final list of measures to Mr Macron. He has promised delegates that he would put the bulk of them either to parliament, or to a referendum."
Take care
David Chandler
© Sage Publications, 2020
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Aux powerpoints, citoyens!
March 7, 2020
The Economist
Late Edition – Final

Wednesday, April 1, 2020

Strategic CSR - Revolution

The article in the url below states the case very well, I think, for the completely inadequate societal/governmental response to climate change so far. The current mass response to COVID-19 clearly shows we are capable of rapid mobilization when we want to (even while recognizing that many political leaders dragged their feet and continue to do so). It is a matter of desire rather than resources or any other possible explanation we have so far offered for not having done more, sooner:
"Had we put as much effort into preventing environmental catastrophe as we've spent on making excuses for inaction, we would have solved it by now. Everywhere I look, I see people engaged in furious attempts to fend off the moral challenge it presents."
The cause, according to the author, is a decoupling of individual action and societal benefit – first, the idea that the problem is too big for any single person can make a difference and/or, second, the idea that burying our heads in the sand is easier than facing up to reality:
"As the environmental crisis accelerates, and as protest movements like YouthStrike4Climate and Extinction Rebellion make it harder not to see what we face, people discover more inventive means of shutting their eyes and shedding responsibility. Underlying these excuses is a deep-rooted belief that if we really are in trouble, someone somewhere will come to our rescue: 'they' won't let it happen. But there is no they, just us."
I am in two minds about the proposed response, however:
"The political class, as anyone who has followed its progress over the past three years can surely now see, is chaotic, unwilling and, in isolation, strategically incapable of addressing even short-term crises, let alone a vast existential predicament. Yet a widespread and wilful naivety prevails: the belief that voting is the only political action required to change a system. Unless it is accompanied by the concentrated power of protest – articulating precise demands and creating space in which new political factions can grow – voting, while essential, remains a blunt and feeble instrument."
In short, and as revealed in the title of the article, the author is calling for revolution:
"Those who govern the nation and shape public discourse cannot be trusted with the preservation of life on Earth. There is no benign authority preserving us from harm. No one is coming to save us. None of us can justifiably avoid the call to come together to save ourselves."
I see the logic in the argument (incremental change is not going to get us there), but am troubled (somewhat) by the implications of the line of thought that is being advanced:
"Every nonlinear transformation in history has taken people by surprise. As Alexei Yurchak explains in his book about the collapse of the Soviet Union … systems look immutable until they suddenly disintegrate. As soon as they do, the disintegration retrospectively looks inevitable. Our system – characterised by perpetual economic growth on a planet that is not growing – will inevitably implode. The only question is whether the transformation is planned or unplanned. Our task is to ensure it is planned, and fast. We need to conceive and build a new system based on the principle that every generation, everywhere has an equal right to enjoy natural wealth."
What I find fascinating about the author's argument, however, is the quantification of revolution – what it would actually take for such a rebellion to occur. What is surprising about it is that the research he quotes suggests that it takes much less than you might think:
"As Erica Chenoweth's historical research reveals, for a peaceful mass movement to succeed, a maximum of 3.5% of the population needs to mobilise. Humans are ultra-social mammals, constantly if subliminally aware of shifting social currents. Once we perceive that the status quo has changed, we flip suddenly from support for one state of being to support for another. When a committed and vocal 3.5% unites behind the demand for a new system, the social avalanche that follows becomes irresistible. Giving up before we have reached this threshold is worse than despair: it is defeatism."
The author takes solace in the recent protests in London by Extinction Rebellion. But, he argues, they cannot be an end in themselves, but must be the beginning of some much bigger:
"The success of this mobilisation depends on us. It will reach the critical threshold only if enough of us cast aside denial and despair, and join this exuberant, proliferating movement. The time for excuses is over. The struggle to overthrow our life-denying system has begun."
Take care
David Chandler
© Sage Publications, 2020
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Only rebellion will prevent an ecological apocalypse
By George Monbiot
April 15, 2019
The Guardian