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, March 14, 2024

Strategic CSR - COP 28

I thought Bloomberg's summary of the agreement reached at COP 28, last December, was telling. First, the good news (with an essential qualification, right at the end, my emphasis):

"The latest UN climate summit ended with an announcement that nations have committed to transitioning away from all fossil fuels. … The deal calls for countries to quickly shift energy systems away from fossil fuels in a just and orderly fashion, albeit in a non-binding deal."

Then, quickly followed by the reality check:

"The history of adherence to such pledges is spotty at best. After a pledge to phase down coal in Glasgow, Scotland, two years ago, consumption has continued to rise and the world remains very unlikely to limit warming to the Paris Agreement's target of 1.5C."

Equally revealingly, the article in the second url below reports Bloomberg's overall score for the final (nonbinding) agreement in terms of "10 key areas" that optimists ahead of the conference were using to evaluate progress and secure gains made in previous conferences:

"Overall, COP28 scored a 3.8 out of 10. That was … 0.1 points higher than the score for last year's COP27 in Sharm el-Sheikh, Egypt, but 2.2 points below the score for COP26 in Glasgow in 2021."

The chart accompanying the article shows how dire COP 28's final agreement was in light of what is required (and was hoped for):
 

Oh well, I suppose there is always next year (as no-one I know has said).

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


COP28 Nations Reach First-Ever Deal to Move Away From Fossil Fuels
By John Ainger, Jess Shankleman, and Jennifer A Dlouhy
December 13, 2023
Bloomberg

COP28's Success Marks Just a Tiny Upgrade on COP27 Results
By Olivia Rudgard and Kira Bindrim
December 13, 2023
Bloomberg
 

Tuesday, March 12, 2024

Strategic CSR - Coal

With the newsletters, I am going to start mixing up the level of insight I provide, with some longer in-depth commentaries (as usual), and some shorter, harder-hitting points, like this quote that I read in the article in the url below about the inertial trajectory of coal consumption:

"While coal remains the world's biggest source of electricity, the increase in renewables installations is outpacing rising demand for power. Moving away from coal will be a critical part of the global fight to reduce carbon emissions."

To be clear, this is the point I wanted to highlight:

"… coal remains the world's biggest source of electricity."

I find it amazing that this statement remains true. Given how, collectively, we have known about climate change as a threat for 50+ years, yet we have in essence sat on our hands (see Strategic CSR – Carl Sagan). Obviously, there is great variance but, collectively, we have effectively done nothing since the 1970s, with carbon emissions continuing to rise (see Strategic CSR – 2022 (+ 2023)).

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Coal Financing Is Still Booming—Led by China
By Tim Quinson
December 20, 2023
Bloomberg Green
 

Thursday, March 7, 2024

Strategic CSR - EVs

Following on from Tuesday's newsletter, the data in the article in the url below represent an additional challenge to the wider adoption of EVs:

"Americans are keeping their cars longer than ever. The average age of a passenger vehicle on the road hit a record 12.5 years [in 2023], according to data gathered by S&P Global Mobility. Sedans like Holdsworth's are even older, on average – 13.6 years."

Why is this happening?

"Blame it mainly on the pandemic, which in 2020 triggered a global shortage of automotive computer chips, the vital component that runs everything from radios to gas pedals to transmissions. The shortage drastically slowed global assembly lines, making new vehicles scarce on dealer lots just when consumers were increasingly eager to buy."

The constrained supply, of course, also contributed to inflation, which is another factor:

"Since the pandemic struck three years ago, the average new vehicle has rocketed 24% to nearly $48,000 as of April, according to Edmunds.com. Typical loan rates on new-car purchases have ballooned to 7%, a consequence of the Federal Reserve's aggressive streak of interest rate hikes to fight inflation."

The result?

"It's all pushed the national average monthly auto loan payment to $729 – prohibitively high for many. Experts say a family earning the median U.S. household income can no longer afford the average new car payment and still cover such necessities as housing, food and utilities."

And, this is not just affecting sales of new cars:

"Used vehicle prices, on average, have surged even more since the pandemic hit – up 40%, to nearly $29,000. With an average loan rate having reached 11%, the typical monthly used-vehicle payment is now $563. Faced with deciding between making a jumbo payment and keeping their existing vehicles, more owners are choosing to stick with what they have, even if it means spending more on repairs and maintenance."

In order for EVs to be widely adopted, old cars need to be removed and, in order for this to make sense for the environment, the net effect needs to be carbon positive (i.e., replaced with EVs or hybrids). As with everything to do with climate change, it seems, we are doing too little, too late. Of course, the macro economic factors are not working in the planet's favor, but that has always been true. In order to divert from the pathway we are on, an intervention is required (and some leadership would be nice) – and most economists agree that the best intervention would be a revenue neutral carbon tax (see Strategic CSR – Carbon tax).

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Repelled by high car prices, Americans are holding on to their vehicles longer than ever
By Tom Krisher
May 15, 2023
Associated Press
 

Tuesday, March 5, 2024

Strategic CSR - Electricity

The article in the first url below argues that, for all the talk about the shift to electrification, and the focus on producing electrical versions of goods already in existence (e.g., EVs; see Strategic CSR – EVs), we are not nearly as prepared as we think to transition:

"It makes sense: Electrification is often the fastest and cheapest way to decarbonize our energy consumption. The technologies to decarbonize electricity already exist and are, for the most part, readily deployable at a large scale by the private sector. But here's a sobering fact about all the talk of the 'electrification of everything': It isn't likely to happen. At least, not soon. We can't go all the way down the electrification road for a host of reasons—nor should we want to. For one thing, it would place unnecessary limitations on other viable solutions to rising greenhouse-gas emissions. It also ignores existing technical, regulatory and strategic constraints on electrification."

More specifically, the author presents what she argues are the five major barriers to the electrification of everything:

1. Some things can't be electrified

2. Cheaper alternatives may be coming for the most difficult-to-electrify areas

3. Access to land, a surfeit of complaints

4. Difficulty getting the necessary permits

5. Electricity grids are highly interruptible 


I am not sure these are the only five, or even the most important five (I read a while ago that, if all the cars currently in California became EVs overnight, the electrical system would need to produce 50 percent more electricity than its current capacity – and this is a utility that already has trouble keeping the lights on), but they do convey the complexity of electrification. Perhaps most important, they highlight the extent to which these challenges are not part of the current conversation (and policy making) around electrification, which is proceeding based on false or misleading assumptions. Developing an EV does not mean that every car can be an EV – in short, there are very few easy answers out there.


For a related argument (favoring hybrid cars over EVs), see the article in the second url below.


Take care

David


David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


The Five Things Keeping Us From Going All-Electric
By Amy Myers Jaffe
July 24, 2023
The Wall Street Journal
Late Edition – Final
R1, R4-5

We May Not Be Ready for an All-E.V. World
By Peter Coy
July 17, 2023
The New York Times
Late Edition – Final
A19
 

Thursday, February 29, 2024

Strategic CSR - Allbirds

The article in the url below records the rapid rise and equally dramatic fall of Allbirds – the once trendy "eco-friendly wool sneakers worn by Silicon Valley tech bros." The story also highlights the obvious fact about business (life?), which has always been true – good intentions do not necessarily lead to good outcomes. And, in particular in the marketplace, good intentions do not replace the need to have a great product:

"It turns out that not everyone wants to dress head-to-toe in merino wool, which although better for the environment than nylon or polyester, isn't as durable. Customers complained of holes in their sneakers months after buying them. And the leggings, which were made from a blend of wool and other fibers, in addition to being see-through, didn't hold their shape, the people said. Allbirds said the sheerness was limited to one light color and that it was a minor issue caught at an early stage."

The case is an insightful story of how to attract a loyal following among customers, and then lose it just as quickly:

"[Co-founder] Zwillinger has a saying: Customers will accept one degree of weirdness, but not two. Iterations of existing styles are preferred over brands pushing too far into new categories. He said in an interview that shoppers who came to Allbirds for its original shoes weren't ready to buy technical gear such as running shoes or workout clothes from the brand. He acknowledged problems with the leggings and other workout clothes. 'You've got to get [the] fit right,' he said."

The ultimate takeaway has implications well beyond the lifespan of a marginal apparel company:

"Allbirds said it isn't changing its commitment to sustainability, even though it doesn't always drive shoppers to buy its products. Emails sent to customers touting the environmental benefits of Allbirds shoes and clothing produced fewer sales than messages that prioritized comfort among other attributes. Environmental concerns are among the least important attributes consumers look for when buying shoes and clothing, according to a survey in March of 750 U.S. consumers by Wedbush Securities. Comfort and price are among the most important."

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


How a Hot Allbirds Lost Its Way
By Suzanne Kapner
July 17, 2023
The Wall Street Journal
Late Edition – Final
A1, A10
 

Tuesday, February 27, 2024

Strategic CSR - Plastic bags

The article in the url below presents a great example of a well-intentioned market intervention that produced unintended consequences:

"Almost a decade ago, California became the first state in the United States to ban single-use plastic bags in an effort to tackle an intractable plastic waste problem."

Predictably, the market reacted:

"Then came the reusable, heavy-duty plastic bags, offered to shoppers for ten cents. Designed to withstand dozens of uses, and technically recyclable, many retailers treated them as exempt from the ban."

But, less predictably, the consequences generated by the adaptation produced the exact opposite of what was originally intended:

"But because they didn't look much different from the flimsy bags they replaced, lots of people didn't actually reuse them. And though they came emblazoned with a recycling symbol, it turned out that few, if any, actually were recycled."

Ultimately:

"Last year, Californians threw away more plastic bags, by weight, than when the law first passed, according to figures from CalRecycle, California's recycling agency."

In short, the mainstream CSR discussion in action.

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


California Hopes to Fix Flawed Plastic-Bag Ban
By Hiroko Tabuchi
February 18, 2024
The New York Times
Late Edition – Final
p20
 

Friday, February 23, 2024

Strategic CSR - Sea temperatures

The article in the url below hints at the extent to which climate change is accelerating:

"The exceptional warmth that first enveloped the planet last summer is continuing strong into 2024: Last month clocked in as the hottest January ever measured. … It was the hottest January on record for the oceans, too. … Sea surface temperatures were just slightly lower than in August 2023, the oceans' warmest month on the books. And sea temperatures kept on climbing in the first few days of February, surpassing the daily records set last August."

The graphic accompanying the article makes the difference from prior years explicit:
 

Tellingly, in terms of how much we now take such headlines for granted, the story was on the back page of the main NYT section (hard copy) – in essence, ensuring that few people see it.

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


2024 Begins With More Record Heat Worldwide
By Raymond Zhong and Elena Shao
February 9, 2024
The New York Times
Late Edition – Final
A24
 

Tuesday, February 20, 2024

Strategic CSR - LGBTQ+

The article in the url below frames one of the most challenging issues in implementing strategic CSR – how does a company know what their stakeholders truly care about? In other words, how can company leaders better understand the real interests and demands of the firm's stakeholders. There are certainly plenty of examples to demonstrate that what stakeholders say and what they do are different (and potentially diametrically opposed – see Strategic CSR – Uber, Strategic CSR – United, and Strategic CSR – Accountability):

"Most consumers want brands to support inclusion. But when they do, they face a potentially negative backlash. … Just ask Bud Light."

Social response bias tells us that, when asked, we will say what we think is the socially appropriate thing to say. What we do when the spotlight is off, however, could easily be something completely different. This makes it challenging for leaders to create value for those stakeholders, as noted by the author of the article, the CEO and president of "the LGBTQ advocacy group Glaad":

"Reading the headlines in 2023, it may have seemed as if consumer brands lost big when it came to LGBTQ issues. Dozens of companies faced social-media attacks—in some cases boycotts—over their support for Pride month, among other things. And some of those corporations took a sales hit during the furor."

When the reality is quite different:

"But that's just the headlines. The real picture shows that corporations are continuing their support for LGBTQ inclusion and representation in marketing—despite threats and boycotts. More than 60 companies from a variety of industries, for instance, signed Glaad's joint statement of support for LGBTQ people at the end of June."

In spite of broad support throughout the U.S. for LGBTQ+ rights, there remains a significant amount of institutional resistance:

"[In 2023], the ACLU reported that more than 500 bills targeting the LGBTQ community were introduced in 47 states. Most of those bills singled out transgender youth."

The other part of this that is so challenging is that, if a leader fails to respond to stakeholders who say they want to see a certain kind of behavior, they are criticized. Equally, if they implement behavior that stakeholders say they want (but really don't), then they get punished in the market. By resisting or parrying all social pressure, therefore, leaders can avoid some of the backlash, but no one was ever rewarded for avoiding a disaster. In our society, we reward people who clean up after a disaster, and we criticize those who don't do what we say – what we do not do is reward someone for preventing a crisis, since we can never be sure the crisis was guaranteed to happen. Much better to stand for something, therefore, rather than against that thing (or attempt to ignore the issue altogether). The danger for firms who misjudge their stakeholders' position on sensitive topics, of course, can be severe – just ask Anheuser-Busch and Target. Similarly, due directly to stakeholder criticism:

"Bud Light dropped from its position as top-selling beer in the U.S. by dollar sales. For the year, Bud Light says, it remains the No. 1 brand in the U.S. nationally by volume. Target removed some items from its Pride selection and in some cases moved the displays from the front of the store. The retailer's sales dropped due to the controversy."

The only answer that makes sense is to build strong, trust-based relationships with all stakeholders, based on genuine commitments by the firm. Doing so ensures that (a) the firm has a better idea about what stakeholders truly care about and (b) if a disaster happens, you have a well of trust for those stakeholders to draw from, so they are much more likely to give you the benefit of doubt. The problem with that, of course, is that building trust-based relationships with all stakeholders takes a huge amount of commitment and runs counter to the way that capitalism has been practiced in the West for so long.

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


The Challenge Facing Companies When Dealing With LGBTQ Issues
By Sarah Kate Ellis
December 10, 2023
The Wall Street Journal
Late Edition – Final
 

Thursday, February 15, 2024

Strategic CSR - Child labor (II)

The article in the url below provides an update on my recent newsletter about child labor in the U.S. (see Strategic CSR – Child labor (in the U.S.)). I think the report reveals a remarkably quick reaction from the companies that were named in The NYT's initial article:

"Now, McDonald's says it is requiring private inspectors to review overnight shifts at slaughterhouses that provide some of its meat, where children as young as 13 were cleaning heavy machinery. Suppliers for Ford Motor Company must now scrutinize the faces of employees when they arrive for work. Costco is commissioning more audits with Spanish-speaking inspectors."

The response illustrates the central concept within Strategic CSR of stakeholders holding firms to account for their actions. In this case, the key stakeholders (the media) exposed the offensive behavior, which generated additional backlash from other stakeholders, and a subsequent adjustment by the firms. In this sense, firms are merely the reflection of the aggregated interests of their collective set of stakeholders – they will do what their stakeholders (truly) want, which firms can identify when those stakeholders reward the behavior they support and punish the behavior they do not support:

"Along with McDonald's and Costco, Starbucks, Whole Foods and PepsiCo are revising the kinds of audits they require at their suppliers. The changes include enhancing reviews of night shifts and shifts run by outside contractors, such as cleaning companies, and moving away from announcing audits in advance."

Now, it is up to stakeholders to follow-up and ensure the announced response becomes actual behavior.

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Confronted With Child Labor in the U.S., Companies Move to Crack Down
By Hannah Dreier
February 8, 2024
The New York Times
Late Edition – Final
A22
 

Tuesday, February 13, 2024

Strategic CSR - ESG

The article in the url below updates a newsletter I sent in September about how executives, in the face of growing ideological polarization around ESG-related issues, are engaging in "green-hushing" by mentioning ESG less often on quarterly calls (see Strategic CSR – Green-hushing):

"Many companies no longer utter these three letters: E-S-G. Following years of simmering investor backlash, political pressure and legal threats over environmental, social and governance efforts, a number of business leaders are now making a conscious effort to avoid the once widely used acronym for such initiatives."

Instead:

"On earnings calls, many chief executives now employ new approaches. Some companies, including Coca-Cola, are rebranding corporate reports and committees, stripping ESG from titles. Advisers are coaching executives on alternative ways to describe their efforts, proposing new terms like 'responsible business.' On Wall Street, meanwhile, some firms are closing once-popular ESG funds as interest fades."

The chart accompanying the article, illustrating the number of S&P 500 firms that refer directly to "ESG" in their quarterly earnings calls, is instructive:


This pattern is replicated within firms, also, including some of the most high-profile advocates for ESG. For example, I saw this chart recently from Bloomberg about Larry Fink's BlackRock:
 

And, even more dire, in New Hampshire (and a few other U.S. states), the Republican-led legislature has tried to criminalize ESG investing:

"Republican lawmakers in New Hampshire are seeking to make using ESG criteria in state funds a crime in the latest attack on the beleaguered investing strategy."

My own reaction to this is that the pushback against the ESG 'industry' is justified, but is being motivated by the wrong reasons. Although the partisan rhetoric can be wildly misleading, the lack of consistent definitions and measurements, let alone agreement on what even should be measured, means the ESG industry only has itself to blame (see Strategic CSR – ESG). Moreover, the focus has been almost exclusively on the "E," with little discussion around the huge (and equally essential) areas of the "S" and the "G," which few people understand and even fewer know how to measure. The emergence (and advocacy) of ESG, although no doubt due to good intentions, has been a mess and has set-back the cause as a whole. Because it was so poorly thought-through, the opening was created for those with an ideological agenda (or even for those who just care to exploit the information asymmetry to make money) to wade in, and the result has been both ugly and extremely unhelpful.

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Companies Avoid Mentioning ESG, The Latest No-No
By Chip Cutter and Emily Glazer
January 10, 2024
The Wall Street Journal
Late Edition – Final
A1, A6

Thursday, February 8, 2024

Strategic CSR - Ends vs. means

The article in the url below wrestles with the proposition that the ends justify the means. Specifically, that when the danger is existential (which is how many understandably frame the climate crisis), then attempting to force change in order to avert the crisis can be justified with extreme action. In particular, the article is an interview with the author (and activist), Andreas Malm:

"With the 2021 publication of his unsettling book, 'How to Blow Up a Pipeline,' Andreas Malm established himself as a leading thinker of climate radicalism. The provocatively titled manifesto, which, to be clear, does not actually provide instructions for destroying anything, functioned both as a question – why has climate activism remained so steadfastly peaceful in the face of minimal results? – and as a call for the escalation of protest tactics like sabotage."

The interview is fascinating, and I have a lot of sympathy with the points being made. Here is an exchange that is illustrative:

"Is there not a risk that smashing things would cause a backlash that would actually impede progress on climate? I fundamentally disagree with the idea that there is progress happening and that we might ruin it by escalating. In 2022, we had the largest windfall of profits in the fossil-fuel industry ever. These profits are reinvested into expanded production of fossil fuels. The progress that people talk about is often cast in terms of investment in renewables and expansion in the capacity of solar and wind power around the world. However, that is not a transition. That is an addition of one kind of energy on top of another. It doesn't matter how many solar panels we build if we also keep building more coal power plants, more oil pipelines, and on that crucial metric there simply is no progress. I struggle to see how anyone could interpret the trends as pointing in the right direction."

Equally fascinating/challenging/depressing:

"Could you give me a reason to live? What do you mean?
Your work is crushing. But I have optimism about the human project. I'm not an optimist about the human project. …
I'm not joking. Yeah, I'm not sure that I have the qualifications to give people advice about reasons to live. My daily affective state is one of great despair about the incredible destructive forces at work in this world – not only at the level of climate. What has been going on in the Middle East just adds to this feeling of destructive forces completely out of control. The situation in the world, as far as I can tell, is incredibly bleak. So how do we live with what we know about the climate crisis? Sometimes I think that the meaning of life is to not give up, to keep the resistance going even though the forces stacked against you are overwhelmingly strong. This often requires some kind of religious conviction, because sometimes it seems irrational."

Tactics similar to this are becoming more 'acceptable' among environmental activists for some time now (see Strategic CSR – Eco-activism). Whether they will be any more effective is yet to be determined.

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


How This Climate Activist Justifies Violence
By David Marchese
January 21, 2024
The New York Times Magazine
Late Edition – Final
11-13
 

Tuesday, February 6, 2024

Strategic CSR - Zoom (II)

A quick follow-up on my recent newsletter highlighting that fully remote workers are more likely to miss out on promotions and mentoring (see Strategic CSR – Zoom). The article in the url below suggests they are also more likely to be fired:

"Workers logging on from home five days a week were 35% more likely to be laid off in 2023 than their peers who put in office time, according to an analysis of two million white-collar workers conducted by employment data provider Live Data Technologies. The analysis showed 10% of fully remote workers were laid off last year, compared with 7% of those working in an office full time or on a hybrid basis."

The argument is that, because managers have less close relationships with remote workers, it is psychologically easier to fire them:

"Much of the disparity, he says, is that it's simply harder to build attachments to people you don't see face to face."

And, it seems, leaders are becoming more explicit with their employees about the risk they run by not coming into the office, at least some of the time:

"Wayfair, the online home-goods retailer, recently told employees that remote workers would be more likely to be affected in company layoffs. Executives also told staff they believe most workers should be in an office most days."

All the commentary I have seen suggests that, while employees prefer to be remote (and have the agency to choose how often they come into the office), the longer term trends suggest the current set-up will not last, simply because of the consequences of remaining remote:

"Other managerial perceptions could be at play, too, he adds. A Gartner survey in 2021 found that 68% of executives and managers believed in-office workers were higher performers than remote employees."

I have seen reports that CEOs believe most employees will be back at work, five days a week, in about 5 years' time:

"'If you have a person working in finance who's not coming to the office, why wouldn't you hire that same person in India or in the Philippines?' said Christian Ulbrich, chief executive of real-estate company Jones Lang LaSalle, noting that in many cases overseas workers can do the same job for less money."

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Remote Workers Feel Brunt of Layoffs
By Te-Ping Chen
January 30, 2024
The Wall Street Journal
Late Edition – Final
A9
 

Thursday, February 1, 2024

Strategic CSR - Child labor (in the U.S.)

A common conclusion reached by students discussing the Nike (sweatshop) case that I teach in my strategy classes is that firms should be held responsible for the whole supply chain. When I point out that there is a cost to this that many Western consumers are unwilling to bear, the students find the dissonance challenging. But, a significant reason why strategic CSR is more valuable than the mainstream CSR discussion is precisely because it deals with empirical reality – incorporating models of human behavior in line with the decisions people actually make, rather than decisions we might wish they made.

In terms of whether companies are willing to audit their own operations (let alone whether external stakeholders are willing to pay), the article in the url below offers an extensive look at where we are, currently. There is an industry of private auditors that companies use to deflect the suspicion/accusation of transgressions in their supply chain. Companies hire these auditors to audit suppliers, largely because federal government agencies are too understaffed to enforce the legislation intended to protect exploited worker populations:

"In the past two decades, private audits have become the solution to a host of public relations headaches for corporations. When scandal erupts over labor practices, or shareholders worry about legal risks, or advocacy groups demand a boycott, companies point to these inspections as evidence that they have eliminated abuses in their supply chains. Known as social compliance audits, they have grown into an $80 billion global industry, with firms performing hundreds of thousands of inspections each year."

Unfortunately, child workers, who often staff the overnight and cleaning shifts (especially in labor- and machinery-intensive industries), often evade inspections given the limited (day) time inspectors actually stay on site. The article makes it clear that this convenient reality seems to be in the best interests of all involved (apart from, perhaps, the child workers who slip under the radar of every regulation intended to protect them):

"Children were overlooked by auditors who were moving quickly, leaving early or simply not sent to the part of the supply chain where minors were working, The Times found in audits performed at 20 production facilities used by some of the nation's most recognizable brands. Auditors did not catch instances in which children were working on Skittles and Starburst candies, Hefty brand party cups, the pork in McDonald's sandwiches, Gerber baby snacks, Oreos, Cheez-Its or the milk that comes with Happy Meals."

Why does this still happen?

"Children often use forged documents that slip by auditors who check paperwork but do not speak with most workers face-to-face. Corporations suggest that supply chains are reviewed from start to finish, but sub-suppliers such as industrial farms remain almost entirely unscrutinized."

So, what is the solution? How do we fund federal agencies to enforce the legislation that already exists? More specifically, how do we incentivize companies to realize that ensuring a clean supply chain is in their best business interests? The key, I think, is that when abuses like those revealed in articles like this appear, we need to act rather than look the other way. As long as there are no substantive consequences, then this greenwashing will continue until we decide, at some point, that it is no longer acceptable. Ultimately, though, it comes down to a willingness to bear the cost burden. Auditing an entire supply chain is expensive – who is going to pick up the tab?

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


An Industry Paid to Find Child Laborers, Doesn't
By Hannah Dreier
December 31, 2023
The New York Times
Late Edition – Final
p1, 14-15
 

Tuesday, January 30, 2024

Strategic CSR - Davos

In general, I find that content generated at Davos should be taken with a handful of skepticism – there is a lot of virtue signaling going on, along with the need to be seen in the right place at the right time. The article in the url below, suggesting that the leaders of the world are now suddenly serious about climate change, appears to be more of the same:

"Instead of just responding to the business effects of climate change, leaders at this year's World Economic Forum are discussing creating a proactive positive impact."

Apparently, the key to this sudden realization of the need to act is regeneration, "rethinking and reinventing everything from business models to supply chains, as opposed to tweaking around the edges to mitigate, instead of prevent, risk." The idea that "regeneration" is just now occurring to the global discussion on climate change is laughable, since it has been around for many years. But, beyond the superficiality of the article, there are two points that stood out to me.

First, is the Pew opinion poll showing that individual Americans are more than ready to blame others (corporations, in particular) for climate change, but only 27% see the solution in individual behavior. They don't understand that the two things are the same, since we are all stakeholders and companies merely reflect the collective interests of all stakeholders, as they interact within the boundaries of what we call the corporation.

Second, I have always disliked the concept of "resilience." It is dangerous because it assumes we need to take the status quo as a given, and work from there. While there is obviously an empirical reality to this, accepting resilience without question avoids diagnosing the core problem and identifying why we are in the mess we are in. And, if we do not understand the cause of the problem, we are highly unlikely to solve it. Linking what Patagonia has done with regeneration to the 'excuse' of resilience is a disservice to the pioneering innovation of Yvon Chouinard (and, again, only ensures we continue to bury our heads in the sand):

"Of course, even getting companies to the stage of resilience – never mind regeneration – is a challenge. … Still, the appetite for change is there – and seems to only be growing. That's not least of all, say some leaders, because there's no good alternative."

Key takeaway – expect nothing to change.

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Davos 2024: The future of sustainable business is 'regeneration'
By Amanda Ruggeri
January 19, 2024
BBC
 

Thursday, January 25, 2024

Strategic CSR - Zoom

As we know, firms are struggling with bringing their employees back to work in the office, full-time. It is obvious why employees might not want to come back (I always heard that it is not 'working in the office' that is the problem, but the 'commute to the office' they do not like), but what are the consequences?

For the organization, I have to believe at some level there is a reduction in productivity. I know there were reports, early in the lockdown, about how the productivity of teams actually increased when they went remote, but my sense is that this is research based on teams that formed their culture in-person, prior to the pandemic, and then moved online (thus reducing the inefficiency of commutes). Now that organizations are starting to form teams from scratch remotely, I have to think that is a more challenging task.

For the individuals, though, I also always thought that being away from the office would likely exclude them from much of the serendipity that characterizes human interaction and career success. The article in the url below confirms this thought by finding that people who work remotely full-time (5 days a week) are less likely to receive promotions and mentoring than those that come into the office, for at least for part of the week:

"For a while, remote workers seemed to have it all: elastic waistbands, no commute, better concentration and the ability to pop in laundry loads between calls. New data, though, shows fully remote workers are falling behind in one of the most-prized and important aspects of a career: getting promoted."

Specifically:

"Over the past year, remote workers were promoted 31% less frequently than people who worked in an office, either full-time or on a hybrid basis, according to an analysis of two million white-collar workers by employment-data provider Live Data Technologies. Remote workers also get less mentorship, a gap that's especially pronounced for women, research shows. Of employees working full time in an office or on a hybrid basis, 5.6% received promotions at their organization in 2023, according to Live Data Technologies, versus 3.9% of those who worked remotely."

And, although the article doesn't cover this directly, it is also likely true that the more someone is in person, the more of these 'benefits' they will likely experience. In terms of fully remote work, however, I was surprised by how prevalent that option appears to be:

"While many workplaces have adopted hybrid policies or reverted to a fully in-person approach, nearly 20% of all employees with college degrees or higher still work on a fully remote basis, according to December data from the Census Bureau and the Bureau of Labor Statistics."

What is ironic is that the same survey reports that remote workers feel more engaged and less burned-out than their in-person colleagues. But, this is either not translating into productivity (perceived or otherwise) or is something executives feel less concerned about, since they are increasingly become more assertive (and honest) in the reality of the workplace as they see it:

"Nearly 90% of chief executives who were surveyed said that when it comes to favorable assignments, raises or promotions, they are more likely to reward employees who make an effort to come to the office."

Perhaps unsurprisingly, there is a generational element to this discussion, as one of the accompanying charts in the article suggests: 


How to manage this issue is clearly going to be something that companies will wrestle with, for a while. Given this, the amount of apparent consensus there is on longer term projections is surprising:

"In the online survey of 1,325 CEOs of large companies in 11 countries, conducted last year by professional-services firm KPMG, almost two-thirds of respondents said they expect most employees will be working in offices full-time in another three years."

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Remote Workers Are Losing Out on Promotions
By Te-Ping Chen
January 13, 2024
The Wall Street Journal
Late Edition – Final
B1, B5
 

Tuesday, January 23, 2024

Strategic CSR - Diamonds

The article in the url below suggests that the producers of lab-grown diamonds are overcoming one of the main criticisms levelled at their products – that they consume large amounts of energy to manufacturer, so are not nearly as green as they are marketed:

"A decade ago, they were relatively unknown in the jewelry industry, but now make up a fifth of diamond sales by value. … Made largely in China and India, lab-grown diamonds are produced using heat and pressure but without any mining. The lab-growing process, however, does require huge amounts of energy, so stones' green credentials depend on where the power comes from."

Having solved the issue of having to dig these things out of the ground (often under appalling conditions), the next step was to remove the emissions associated with the vast amounts of energy required to produce lab-grown diamonds:

"Danish jeweler Pandora's diamonds are made using renewable energy and set in recycled gold and silver rings. It said a cut and polished one carat diamond has a carbon footprint of roughly 9.2 kilograms, less than a tenth of the carbon emissions for a natural diamond—106.9kg CO2 based on research from the Natural Diamond Council."

Similarly:

"In 2019, Laura Lambert launched Fenton, an ethical jewelry brand based in London. Three years later the former retail executive started selling lab-grown diamonds produced in a solar-powered factory in Gujarat, India. … She says her own market research indicates currently only about 5% of all lab-grown diamonds are made using renewable energy, but it has been something her customers have been asking for."

As a result of the growing market share of lab-grown diamonds:

"Miners' revenues have dropped sharply. De Beers, the world's largest diamond miner, sells its rough diamonds in ten selling cycles during the year. The volume and quality can vary but is a good barometer of appetite for natural diamonds, as well as prices. In the last cycle of 2023, De Beers sold $130 million worth of diamonds compared with $417 million a year prior."

In spite of this progress, lobbyists for real diamonds are still able to question the sustainability of lab-grown diamonds (see Strategic CSR – Diamonds):

"'Consumers are being told that lab-grown diamonds are sustainable and that couldn't be further from the truth,' says David Kellie, CEO of the Natural Diamond Council, a diamond mining trade group. The group began airing videos on social media in April as part of what it calls a 'myth-busting' campaign. According to a new report by the group, more than 60% of lab-grown diamonds are made in China and India, where climate-polluting coal is the major power source. The report also touts efforts by the mining industry to cut carbon emissions and boost the economies of countries with major diamond mines such as Botswana and Namibia."

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Lab-Grown Diamonds Go Green
By Yusuf Khan
January 11, 2024
The Wall Street Journal
Late Edition – Final
B6
 

Thursday, January 18, 2024

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.
 

In the aftermath of the consumption and materialistic fueled holiday season, the video in the url below reveals the extent of waste that is embedded in the growing economy of online retail:


The video features Amazon, but really applies to all online retail and fast fashion (e.g., see Strategic CSR – Fast fashion and Strategic CSR – Casper). While the video clearly identifies a problem, however, it also suggests Amazon is fully aware of the problem and, encouragingly, is trying to do something about it.

Have a great semester.
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Where Online Returns Really End Up and What Amazon Is Doing About It
January 27, 2022
CNBC
 

Thursday, December 7, 2023

Strategic CSR - Weather

 
This is the last CSR Newsletter of the Fall semester.
Happy Holidays and I will see you in the New Year!
 

For this last newsletter of the semester, I thought it worth discussing something that Brits are well known for complaining about – the weather. Historically, complaining about the weather has been futile, since it was thought to be beyond our control. That is, of course, before we invented climate change. Not only can we now influence the weather (if not completely control it), as this chart from the article in the url below reports, we are doing so at great cost to ourselves. Specifically, the chart captures the amount of insurance payouts due to bad weather that have occurred annually, since 1990. Anyone see a pattern?
 

Happy COP 28, everyone. See you in 2024.
Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


A Punishing Year of Thunderstorms Has Led to Record-Breaking Losses
By David Smagalla
November 27, 2023
The Wall Street Journal