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


Friday, October 31, 2008

Strategic CSR - CSR

The article in the url below is one of the most concise and effective arguments for CSR I have read:

“… in our hyperconnected and transparent world, how you do things matters more than ever, because so many more people can now see how you do things, be affected by how you do things and tell others how you do things on the Internet anytime, for no cost and without restraint.”

The focus of the article is the predatory lending practices that led to the current financial crisis, but the same argument can be made in any area of a firm’s operations:

“We got away from these hows. We became more connected than ever in recent years, but the connections were actually very loose. … nobody was really connected in value terms.”

Friedman argues that:

“We need to get back to collaborating the old-fashioned way. That is, people making decisions based on business judgment, experience, prudence, clarity of communications and thinking about how -- not just how much.”

In short, we need to get back to a CSR perspective.

Have a good weekend.
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Why How Matters
By THOMAS L. FRIEDMAN
897 words
15 October 2008
The New York Times
Late Edition - Final
35
http://www.nytimes.com/2008/10/15/opinion/15friedman.html

Wednesday, October 29, 2008

Strategic CSR - SOX

The article in the url below summarizes a report by the Government Accountability Project (“an advocacy group that provides legal advice to whistleblowers,” http://www.whistleblower.org/) that criticizes the 2002 Sarbanes-Oxley (SOX) legislation for failing to protect corporate whistleblowers (Issues: Corporate Governance—Reporting, p108). In particular, the report highlights the very narrow interpretation of the legislation, which is leading courts to favor companies over individuals:

“Many cases against defendant companies have been dismissed on the grounds that employees who worked for a corporate subsidiary are not necessarily covered by the whistleblower provision, according to Richard Moberly, a University of Nebraska law professor. "The provision is supposed to be interpreted broadly but it is being interpreted very narrowly," he says.”

In spite of the fact that the protection of whistleblowers was one of the central reasons for passing the legislation, the results of 1,273 complaints that have been filed under SOX indicate that the odds are still stacked in favor of large corporations:

“According to data from the Department of Labor, it has ruled in favour of whistleblowers 17 times in the 1,273 complaints filed from 2002 to the start of this month. Meanwhile, 841 cases were dismissed, 162 were withdrawn and 107 are pending.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

US legislation 'fails' to help corporate whistleblowers achieve justice
By Joanna Chung in New York
409 words
10 September 2008
Financial Times
USA Ed2
04
http://www.ft.com/cms/s/0/f7ba2db6-7ecf-11dd-b1af-000077b07658.html

Tuesday, October 28, 2008

Strategic CSR - Danone

The article in the url below is confusing. It outlines the Danone Communities Fund, but describes it in parts of the article as a means of “financing social businesses” and, in others, as a “financing model” designed as an investment fund (Issues: Finance, p180; Investing, p184):

“[Danone] has devised a financing model in which 90 per cent of investors' money will be ploughed into low-risk investments, weighted towards socially responsible investments. The other 10 per cent will go directly to the yoghurt project [a nutrient-rich yoghurt for poor consumers in Bangladesh]. The model is a Sicav (société d'investissement à capital variable), an open-ended collective investment fund common in France.”

Several questions come to mind: What were the motivations behind the fund—a social project or investment vehicle? Are investors asked to accept a lower level of return to meet the fund’s social goals? What is Danone, a “French food company,” doing designing investment funds?

“Anyone, from Danone staff to shareholders and institutional investors, can invest in the Danone Communities fund, which launched in December 2007 and is managed and marketed by Crédit Agricole. So far the fund has raised about €60m (£47): €20m from Danone, €24m from Credit Agricole, and the rest from other institutions and Groupe Danone's employees.”

The article is not clear on these questions, but I think it is also missing the broader point by confusing the firm’s and fund’s social and business goals. If this fund is not considered part of Danone’s philanthropic arm, then it is designed to generate a profit. Alternatively, if it is a philanthropic project, then perhaps it should make clear there will be a trade-off between reaching its social goals and ROI:

“In recent years, many groups have warmed to the idea of serving the world's poorest people while turning a profit. But the heavy investment in time and money and the unstable operating conditions concerned mean most of these activities remain far from profitable.”

Danone’s project looks interesting—unfortunately, the article describing it does not do it justice.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Yoghurt maker's recipe for funding social businesses
Murray, Sarah
664 words
7 July 2008
Financial Times
London Ed1
16
http://www.ft.com/cms/s/0/ff1bd10a-4bc0-11dd-a490-000077b07658.html

Friday, October 17, 2008

Strategic CSR - Food

It will come as no surprise to many that a huge amount of the daily food consumption in the U.S. is wasted. The article in the url below, however, reports research that attempts to quantify just how much food this wastage represents:

“In 1997, in one of the few studies of food waste, the Department of Agriculture estimated that two years before, 96.4 billion pounds of the 356 billion pounds of edible food in the United States was never eaten.”

This amounts to “an estimated 27 percent of the food available for consumption” and is not only a U.S. phenomenon:

“In England, a recent study revealed that Britons toss away a third of the food they purchase, including more than four million whole apples, 1.2 million sausages and 2.8 million tomatoes. In Sweden, families with small children threw out about a quarter of the food they bought, a recent study there found.”

This NYT article reports that a new study is being undertaken to update the figure, this time accounting for the recent growth in pre-prepared food produced by supermarkets. Optimistically, Jonathan Bloom, the creator of the website WasteFood.com (http://wastefood.com/) believes recent events suggest things might be improving:

“The fundamental thing that I'm fighting against is, 'why should I care? I paid for it,' '' Mr. Bloom said. ''The rising prices are really an answer to that.”

Have a good weekend.
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

One Country's Table Scraps, Another Country's Meal
By ANDREW MARTIN
1548 words
18 May 2008
The New York Times
Late Edition - Final
3
http://www.nytimes.com/2008/05/18/weekinreview/18martin.html

Into the Trash It Goes: A federal study found that 96.4 billion pounds of edible food was wasted by U.S. retailers, food service businesses and consumers in 1995 -- about 1 pound of waste per day for every adult and child in the nation at that time. That doesn't count food lost on farms and by processors and wholesalers. For a family of four people, that amounted to about 122 pounds of food thrown out each month in grocery stores, restaurants, cafeterias and homes.

Thursday, October 16, 2008

Strategic CSR - P&G

The article in the url below presents the opportunities and challenges for firms seeking to engage with stakeholders online (Issues: Stakeholder Relations, p138). The article is a review of a new book titled ‘Groundswell’ that profiles different case studies of firms’ attempts to establish an online dialogue with stakeholders (primarily customers):

“As part of P&G's embrace of "social technologies", the site launched a messageboard late last year allowing customers to share their views on stain removal and, more controversially, packaging.”

The postings by customers, as the article illustrates, were not very complimentary. But P&G’s mistake was not setting-up the site, but giving the impression of not listening to or acting upon the issues that were raised:

“… the boards contain no response to the gripes, nor has the company taken down repetitive postings. … P&G has opted to let its customers talk openly on its website, but it has not shown it is taking notice.”

The book presents a number of examples (both good and bad) of firms’ attempts to establish this virtual dialogue with their stakeholders. It argues that, even done with the best of intentions, offering an opportunity for stakeholders to debate the virtues of a product can end up harming a firm’s reputation if it is not done either genuinely or well. As such, firms need to understand their stakeholders, what their concerns are, and who among them are likely to participate in online forums before beginning:

“Lego, for example, finds "Lego Ambassadors" among its AFOLs, or Adult Fans of Lego, and uses them to communicate with a global online community of adult hobbyists who account for 5 to 10 per cent of the toymaker's business.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Dangerous e-liaisons with the customer
By Jonathan Birchall
814 words
5 June 2008
Financial Times
USA Ed1
12
http://us.ft.com/ftgateway/superpage.ft?news_id=fto060420081503173239

Monday, October 13, 2008

Strategic CSR - American Apparel

The article in the url below demonstrates the limits for firms that rely too heavily on the market segment of ethical consumers (Chapter 2: CSR: Do Stakeholders Care? p25):

“In the beginning, American Apparel put a "sweatshop free" label on its t-shirts. But sex turned out to be a better sell than good labor practices. Lessons in the limits of altruism.”

The pessimistic (or realistic, depending on your perspective) view of human nature held by Dov Charney, America Apparel’s CEO, is that “to get what you want, you must appeal to people's self-interest, not to their mercy.” The article argues that the success of Charney’s approach, at least in relation to the teenage customer to whom American Apparel seeks to appeal, lies in understanding the gap between people’s stated intentions and actual practice:

“A whopping majority of American shoppers may consider themselves environmentalists, but, according to the Journal of Industrial Ecology, only 10% to 12% "actually go out of their way to purchase environmentally sound products." Similarly, Brandweek reported on a survey that found that even among consumers who called themselves "environmentally conscious," more than half could not name a single green brand.”

The article argues that, instead, successful ethical retailers rely on other research that suggests people are much happier treating themselves to luxury items, while at the same time feeling like they are doing something virtuous:

“Perhaps this is why many big companies and brands are not so much changing their products as adding new alternatives to their existing product mixes, or carving a small donation to charity out of their profit margins. Pepsi-Cola is testing an all-natural version of its flagship drink called Pepsi Raw, and Clorox has launched an eco-friendly line of cleaning products. The Bono-promoted (Product) Red initiative brands existing products that dedicate a portion of the purchase price to the Global Fund to Fight AIDS, Tuberculosis, and Malaria. There's even a (Product) Red version of the iPod.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Sex vs ethics
Fast Company Magazine
It's a dilemma for investors who want hefty returns and a clean green conscience: Can you own Big Oil and still feel good in the morning?
From: Issue 124 | April 2008 | Pages 54-56 | By: Rob Walker
http://www.fastcompany.com/magazine/126/sex-vs-ethics.html

Friday, October 10, 2008

Strategic CSR - Wal-Mart

Just in case some of you missed it on the slow media day of July 4, the article in the url below discusses the meaning behind Wal-Mart’s new logo:

“Something's up at Wal-Mart. Visitors to walmart.com will notice that the logo consumers have become accustomed to over the past 17 years is gone. Gone, too, are the sharp, uppercase letters spelling out the name of the Bentonville (Ark.) company and the pointy star that served as a hyphen. In its place: a new logo made up of rounded, lowercase characters. The hyphen has disappeared. And in place of the star is a symbol that resembles a sunburst or flower. It appears after the "Walmart" name, like an asterisk begging for a footnote.”

http://images.businessweek.com/story/08/190/0702_walmart.jpg

The article argues that the logo, which was officially launched on June 30, is an attempt by Wal-Mart’s to capitalize on its increasing reputation for progressive action in relation to environmental sustainability. The introduction of the new logo (changing from “Everyday low prices” to “Save money. Live better.”):

“… coincides with CEO H. Lee Scott's goal of transforming Wal-Mart—most recently under fire for losing a Minnesota court case over breaking labor laws—into a more environmentally friendly corporation.”

The article contains quotes, however, that suggest the design will fall short of its intentions:

“[Marty Neumeier, president of Neutron, a branding firm in San Francisco] adds that the image lacks the distinctive power of the most successful logos, such as Target's (TGT) bull's eye, which is immediately recognizable. Wal-Mart's new sunburst, in contrast, "is designed so simply that there's no ownership to it," Neumeier says. In other words, it could be used by almost any corporation.”

Have a good weekend.
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Business Week Online
Insider Newsletter
July 3, 2008
********************
Wal-Mart Gets a Facelift
Gone are the mega-retailer's blocky letters, hyphen, and star. Can Wal-Mart remake itself by remaking its logo?
by Reena Jana
http://newsletters.businessweek.com/c.asp?713736&c55a2ee820194f0f&14

Wednesday, October 8, 2008

Strategic CSR - GE

You can read the news reported in the article in the url below that GE’s “green sales” rose by 15% from 2006 to 2008 in two different ways. The optimist will see it as evidence of the potential market for sustainability related products and, therefore, further support for the business case for CSR:

“Sales of products labelled by General Electric as "environmentally friendly" rose to $14bn last year … from $12bn in 2006.”

The skeptic, however, is more likely to question the underlying growth and the way in which GE classifies a product as ‘green’:

“GE's Ecomagination products are independently audited to ensure they are environmentally friendly, but the definition the company uses means products not usually thought of as green, such as jet engines, can be included if they are more energy efficient than their predecessor or rival products, and nuclear reactors are included as they produce energy without carbon.”

Such a skeptic might continue to argue that, while sales in GE’s ‘green’ sector have increased by 15% since 2006, the number of products the firm classifies as ‘green’ has increased by 38%:

“In 2006, there were 45 product lines under the brand; last year, this rose to 62 lines, an increase of 38 per cent.”

A skeptic might conclude, therefore, that this casts the “buoyant” sales in a different light and wonder whether the figures demonstrate anything other than creative accounting.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Buoyant GE sees 'green' sales up by 15%
By Fiona Harvey in London
474 words
28 May 2008
Financial Times
London Ed1
26
http://us.ft.com/ftgateway/superpage.ft?news_id=fto052820080125501937

Monday, October 6, 2008

Strategic CSR - Zappos

The article in the url below summarizes a recent article in Harvard Business Online (‘Why Zappos Pays New Employees to Quit—And You Should Too,’ http://discussionleader.hbsp.com/taylor/2008/05/wy_zappos_pays_new_employees_t.html) about a firm I hadn’t heard of before—Zappos. For the similarly uninitiated:

“Zappos delivers shoes, handbags and other products ordered over the Internet. Delivery is free and fast, and customers can return unwanted products at no charge.”

The article praises Zappos for its exceptional customer service and argues that the reason it is so consistent in this area is due to the employees it hires (Issues: Employee Relations, p118; Wages, p204):

“After a few weeks of intensive training, new call-center employees are offered $1,000 on top of what they have earned to that point if they want to quit.”

Zappos reasons that those employees who take the firm up on its offer do not have the level of commitment it is looking for, while those that refuse it are more likely to be enjoying what they are doing. Quite a refreshing approach to employee retention!

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Shoe Seller's Secret of Success
By DAN MITCHELL
650 words
24 May 2008
The New York Times
Late Edition - Final
5
http://www.nytimes.com/2008/05/24/technology/24online.htm

Friday, October 3, 2008

Strategic CSR - Earthshare.org

Over the summer, I saw a full-page advert in the NYT for the environmental activist group Earthshare.org (http://www.earthshare.org/). I couldn’t find a graphic of the ad to share with you, but have reproduced the copy below:

“Ever decision we make has consequences. We choose what we put into our lakes and rivers. We choose what we release into the air we breathe. We choose what we put into our bodies, and where we let our children run and play. We choose the world we live in, so make the right choices. Learn what you can do to care for our water, our air, our land and yourslefyourself at earthshare.org.”

What attracted me to the ad was the emphasis it places on individual responsibility, rather than merely harranging firms for polluting too much. The headline of the ad (including capital letters and bold) captures the tone exactly:

“WE LIVE IN THE HOUSE WE ALL BUILD.”

As regular readers of this Newsletter will know, I favor a similar emphasis within the CSR debate. I think firms act much more quickly in response to key stakeholder demands (consumers, in particular) than they do when expected to initiate action that has no demonstrated support in the marketplace. In other words, if consumers stop buying a certain product because they disapporave of the way it was produced or some other action by the firm that produced it, that firm will quickly adapt or fail. In other words, we are as responsible for the corporations that survive and thrive in our society as the organizations themsleves. It is not a perfect solution for the problems in our capitalist system, and I do not absolve firms of all responsibility (and I still think that those firms that are able to differentiate themselves in relation to CSR will be more successful in the long term); it is just that I think more would be achieved that much faster in terms of CSR advocacy if an equal empahsis was placed on stakeholder responsibility (e.g., consumer education) as on corporate responsibility.

Have a good weekend.
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Wednesday, October 1, 2008

Strategic CSR - Wal-Mart

The article in the url below emphasizes the value of firms remaining on good terms with all stakeholders (Issues: Stakeholder Relations, p138). This particularly applies to those stakeholders who have embarrassing video archives of past activities that a firm would rather keep quiet:

“About 15,000 videotapes of Wal-Mart executives at work and at play over the past 30 years have suddenly become available to the public thanks to a series of blunders by the retail giant - which paid too little attention to the company it hired to make the tapes before abruptly terminating their relationship two years ago. … Astonishingly, Wal-Mart never drew up a written contract with Flagler to establish who owns the tapes.”

The tapes are already providing valuable evidence for parties that have brought lawsuits against Wal-Mart and the resource (available for anyone to research at a cost of $250 a time) could easily open the firm up to further liability claims:

“A Kansas City lawyer representing a 12-year-old boy who suffered extensive burns when a gasoline can bought at Wal-Mart blew up in her face was astounded - and delighted - to find footage of employees making jokes about their gasoline cans blowing up at a Christmas party.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

For sale: the video archive Wal-Mart should have erased
By Andrew Gumbel in Los Angeles
591 words
11 April 2008
The Independent
Page 25
http://www.independent.co.uk/news/world/americas/for-sale-the-video-archive-walmart-should-have-erased-807813.html