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, February 27, 2009

Strategic CSR - Ecological Agony Aunt

The article in the url below provides a resource for those who feel that it isn’t easy being green:

"Think of the imponderables. What roach killer should one use? How should one deal with environmentally oblivious in-laws? ... Why is bisphenol-A -- a chemical found in children's sippy cups and other plastic containers -- considered a toxic villain by some but not by the Food and Drug Administration? Confused? Ask Umbra, the arch online sage of the new green age."

Umbra’s column, which appears twice a week on grist.org (http://www.grist.org/) is proving to be very popular and has spawned imitators elsewhere:

"Similar columns, blending authority and insouciance, have popped up elsewhere, including ''Ask Pablo'' on Salon.com, ''Green Lantern'' on Slate.com, ''Earthtalk'' on E Magazine's site and ''Mr. Green'' on the Sierra Club's Web site."

Blending science and activism, the columnists aim to provide insight into consumer confusion as they attempt to navigate through the maze of genuine uncertainty about environmental best practice and duplicitous behavior by firms that seek to take advantage of consumer interest in sustainability through greeenwashing.

Have a good weekend.
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
(c) Sage Publications, 2006

Talking Directly, and Kindly, To Believers in the Eco Life
By FELICITY BARRINGER
1079 words
26 August 2008
The New York Times
National Edition
12
http://www.nytimes.com/2008/08/26/us/26advice.html

Wednesday, February 25, 2009

Strategic CSR - New Balance

I bought a new pair of running shows over the summer. I almost always buy Nike shoes, but I bought New Balance for the first time (and the last time, but that is another issue). I was interested to read the label that was attached to the shoes (the red highlighting is in the original):

“Many of our shoes are produced in one of six United States factories. While most of the footwear industry has moved its production overseas to take advantage of low labor costs and generally cheaper production costs, we continue to have many of our shoes made in the United States and have expanded production substantially. Since 1995, we have increased our manufacturing jobs by 65%. We at New Balance are proud to provide jobs to the U.S. workforce, and proud of our well educated, high quality associates who can compete with anyone in the world.”

In general:

“New Balance remains committed to producing jobs for American workers and to supporting domestic manufactures and suppliers where possible.”

Three questions immediately come to mind:

1. Are New Balance consumers aware of the firm’s intended point of differentiation?

2. Are non-New Balance consumers aware of New Balance’s position?

3. Do any consumers alter their purchasing decisions because of this position?

As a non-U.S. national living in the U.S., I do not draw a moral distinction between a U.S. job and one overseas. I think a worker from India, China, Vietnam, or any other country, should have the equal right to work for any company that wants to hire him or her. As a result, I am ambivalent (from a nationalistic perspective) regarding the outsourcing debate. I do think, however, that it is perfectly legitimate for consumers to be strategic in their purchasing decisions and ‘country of origin’ is as good a reason for buying a product as most of the other reasons people use (Issues: Country of Origin, p223). It would be interesting to know, therefore, whether New Balance, Saturn, or any other firm that employs nationalism as a marketing strategy is rewarded for its efforts.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Monday, February 23, 2009

Strategic CSR - Activitist Shareholders

The article in the url below indicates an increased willingness on the part of large firms to engage NGOs and other activist shareholders on issues related to the environment (Issues: Stakeholder Relations, p138; NGO and Corporate Cooperation, p192):

"Of 57 [climate change-related shareholder] resolutions filed by a range of socially concerned investors, almost half were withdrawn after companies ranging from Continental Airlines to El Paso made commitments on setting targets for reducing greenhouse gas emissions and other issues."

The article also claims that support among shareholders, in general, for the resolutions that went to a vote is also increasing, putting greater pressure on those firms still resisting change:

"... the 24 resolutions that went to a vote secured a record high average of voting support of 23 per cent, up from just over 17 per cent for the resolution votes two years ago."

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Climate resolutions 'having big impact'
By Jonathan Birchall in New York
414 words
21 August 2008
Financial Times
London Ed2
19
http://www.ft.com/cms/s/0/8ddcc100-6f17-11dd-a80a-0000779fd18c.html

Friday, February 20, 2009

Strategic CSR - Factory Farms

The video in the url below presents a disturbing view on factory farming from inside the Meatrix (http://www.themeatrix.com/inside/):

“Want to know more about problems with factory farming while finding healthier food for you and your family? Learn, discuss, get involved - inside The Meatrix.”

Have a good weekend.
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Inside the Meatrix
Date: 06-25-2008
Type: video
Category: Sustainability
Source: Sustainable Table
http://vcr.csrwire.com/node/8842

Wednesday, February 18, 2009

Strategic CSR - Supply Chain

The advice column in the url below addresses the issue of a firm’s responsibility for its extended supply chain (Issues: Cultural Conflict, p160). It cites two recent examples in the UK (Primark and Tesco) where evidence suggests a systematic abuse of human (child laborers) and employment (low pay) rights in factories that supply both firms. The column then asks for advice from four different perspectives in response to the following questions:

“Is it ever possible for companies with suppliers in developing economies to guarantee that their goods have been produced in ethically acceptable conditions? And what kind of audit system could provide consumers with such a guarantee?”

In relation to the first question, I was pleasantly surprised to see the position taken that consumers shouldn’t be surprised when they pay such relatively low prices for clothes that it then emerges that the clothes did not cost much to produce:

“Consumers massage their consciences, crying crocodile tears when an abused producer is found by an intrepid journalist, but show their true colours shopping for underwear.”

In addressing the second question, the general response was also refreshing (in terms of its perceptiveness), suggesting that (a) firms should not be surprised that suppliers in developing countries try and deceive auditors and (b) that they only have themselves to blame because, while firms might say that they want their suppliers to adhere to certain standards, they incentivize them to minimize costs. Until firms become serious about providing financial incentives for suppliers to adhere to their codes of conduct and punish transgressors, they are unlikely to see the kind of behavior they say they seek:

“That means engaging the supply chain in good corporate social responsibility practices rather than relying on spot checks. It means getting suppliers to recognise that adhering to sound employment practices is in their own interests and helping suppliers develop policies and practices that will make them a trusted supplier and build a long-term relationship.”

The absence of a choice for many workers in the developing world is also a point well made:

“Poor parents in India, Pakistan or Vietnam cannot choose between sending their children to a school or a factory. The real choice is between eating or going hungry.”

The upshot is that the column does not provide many specific answers, but at least everyone is realistic in terms of the situation on the ground.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Moral maze for retailers reliant on developing world suppliers
872 words
2 July 2008
Financial Times
London Ed1
16
http://www.ft.com/cms/s/0/f5771c20-47d0-11dd-93ca-000077b07658.html

Monday, February 16, 2009

Strategic CSR - Advertising

The article in the url below is a report about the level and nature of “eco-friendly claims” in the advertising industry (Issues: Advertising, p151; Brands, p153). While the environment was the focus of attention at the 2007 International Advertising Festival at Cannes, in 2008 this issue was pushed to the background:

“… Mr. Gore was nowhere to be found, and the party buzz was about the American presidential election, the Euro 2008 soccer tournament and even the business of advertising itself. Green marketing, while booming, had lost some of its cachet.”

The article argues that this is largely due to greenwashing by firms that overreach in their environmental claims, which has resulted in a negative reaction and increasing skepticism among consumers:

“The sheer volume of these ads -- and the flimsiness of many of their claims -- seems to have shot the messenger. At best, it has led consumers to feel apathetic toward the green claims or, at worst, even hostile and suspicious of them.”

This growing consumer backlash/disillusionment is measured in terms of complaints submitted to various national advertising standards organizations:

“The Advertising Standards Authority, an industry-financed group that monitors ad content in Britain, said it had received 561 complaints from consumers about green claims in 410 ads in 2007, up from 117 complaints about 83 ads the year before. The European Advertising Standards Alliance, an umbrella group for similar organizations across Europe, reported sizable increases in complaints in other countries, including in Belgium and the Netherlands, particularly involving automotive advertising.”

To the extent that firms perceive CSR to be a fad to which they need to pay lip-service, while minimizing their level of substantive action, the danger facing the CSR community seems twofold. First, if firms do not genuinely believe that CSR provides them with a competitive advantage, they are more likely to make claims that are not supported on closer inspection. And, second, especially in a deteriorating economic environment, the CSR department/budget in such firms is more likely to be cut back. Either way, the economic downturn and the idea that CSR is a fad whose time will pass are significant threats to the gains made in recent years.

Take care
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Cooling Off on Dubious Eco-Friendly Claims
By ERIC PFANNER
883 words
18 July 2008
The New York Times
Late Edition - Final
3
http://www.nytimes.com/2008/07/18/business/media/18adco.html

Friday, February 13, 2009

Strategic CSR - Greed

The article in the url below presents an admirable defense of ‘greed.’ The author argues that ‘greed’ is a relative term that is easy to identify in excess, but much harder at points in-between:

“Over the last three decades, the average compensation for chief executives of major American corporations has gone from 35 times the average pay of American workers to 275 times. That increase, it is suggested, or at least implied, constitutes greed. But what if the increase had ''only'' been to 100 times? Would that have signaled greed? What about 50 times? And why wasn't 35 times itself a sign of greed?”

The focus of the article is the argument that by applying the label ‘greed’ to actions that are really only self-interest (i.e., by equating the two), we are ignoring the economic benefits that self-interest and the pursuit of profit bring, while diminishing the power of the accusation of ‘greed’:

“Economics has given us a lot of better words, from self-interest to incentive to profit. They do not mean the same thing as greed, but they have displaced it, obscured it -- and certainly demoted it from being a deadly sin.”

Have a good weekend.
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Modern Market Thinking Has Devalued a Deadly Sin
By PETER STEINFELS
969 words
27 September 2008
The New York Times
Late Edition - Final
19
http://www.nytimes.com/2008/09/27/us/27beliefs.html

Wednesday, February 11, 2009

Strategic CSR - Zimbabwe

The article in the url below outlines the difficult decisions faced by firms operating in a country when world opinion moves in favor of sanctions and pressure on multi-nationals to withdraw (Issues: Cultural Conflict, p160; Companies Trying to Do CSR Well: Shell, p302):

“Doing business with Zimbabwe at a time when the world's media are showing the violent suppression of dissent can damage their reputations - as many found during the apartheid years in South Africa. Yet withdrawal could hurt ordinary people while having little impact on the government - and might delay recovery when democracy is eventually restored.”

The article cites a number of examples of western firms that provide meaningful employment to hundreds of Zimbabweans. The UK supermarket, Waitrose, for example, imports fish that are fair- trade certified from its Zimbabwe supplier. This firm:

“… employs 450 people, paying them "substantially more" than the minimum basic wage, according to Waitrose. They are also given other cash allowances, free lunches and HIV/Aids support, with medical insurance and membership of pension schemes for permanent employees.”

The article also raises the difficult case of the mining firm Anglo-American, which is currently investing in Zimbabwe to establish a platinum mine. As one source is quoted as saying, withdrawal represents:

"gesture politics . . . If Anglo American pulled out, their shoes would be filled very quickly by the Chinese. The precedent was set in Sudan, where the Chinese moved in after the imposition of western sanctions."

Ultimately, continued involvement legitimizes the current administration and, while life remains bearable for ordinary people, there is little hope of bottom-up regime change. On the other hand, however, withdrawal can cause real pain and can hamper recovery once change occurs. The ‘best’ decision is not apparent and, unfortunately, media coverage tends toward the emotional, rather than helping make the ‘best’ decision for those most affected—in this case, the Zimbabwean people.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Mangetout and Mugabe; Multinationals wrestle with their Zimbabwe role
By John Willman, Business Editor
1469 words
5 July 2008
Financial Times
Asia Ed1
10
http://www.ft.com/cms/s/0/6b315526-49fb-11dd-891a-000077b07658,dwp_uuid=70bd196c-ffc3-11dc-825a-000077b07658.html

Monday, February 9, 2009

Strategic CSR - Companies and NGOs

The article in the url below maps out the advantages and disadvantages, for both sides, of alliances between NGOs and corporations (Issues: NGO and Corporate Cooperation, p192). On the one hand:

“What is in it for the companies? First, contact with NGOs provides intelligence. … Second, company executives have their own values; many privately agree with NGOs. … Third, companies think a relationship with an NGO gives them a seal of approval.”

On the other hand:

“What is in it for the NGOs? This one is simple: companies donate money. They also deliver. They have staff around the world, they operate across borders and have technical expertise.”

In terms of disadvantages:
“… there are dangers on both sides. Both companies and NGOs have reputations to protect.”

The interesting point that emerges from the article, however, is the recognition by both sides that the answer to any given problem lies within either corporations and/or NGOs. Government is viewed as an ineffective partner, at best, and an impediment to progress, at worst. This is particularly felt to be the case in tackling international issues. The article’s author, however, makes the point that the fact that corporations and NGOs increasingly have to take on responsibilities that previously would have been dealt with by governments is cause for concern:

“… because neither companies nor NGOs formally answer to us as citizens.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Why companies and campaigners collaborate
Skapinker, Michael
822 words
8 July 2008
Financial Times
Asia Ed1
11
http://us.ft.com/ftgateway/superpage.ft?news_id=fto070720081430478718

Friday, February 6, 2009

Strategic CSR - 10 Worst Corporations of 2008

The article in the url link below undoubtedly presents a subjective view of the corporate world, but it also makes for interesting reading:

“As we compiled the Multinational Monitor list of the 10 Worst Corporations of 2008, it would have been easy to restrict the awardees to Wall Street firms. But the rest of the corporate sector was not on good behavior during 2008 either, and we didn't want them to escape justified scrutiny.”

Identifying the Top 10 firms in any category, by definition, reflects the biases of the people doing the ranking (and CorpWatch certainly has its biases), but it is also hard to defend the actions highlighted in the article. One example:

“In 2001, Chevron swallowed up Texaco. It was happy to absorb the revenue streams. It has been less willing to take responsibility for Texaco's ecological and human rights abuses. In 1993, 30,000 indigenous Ecuadorians filed a class action suit in U.S. courts, alleging that Texaco over a 20-year period had poisoned the land where they live and the waterways on which they rely … . Chevron had the case thrown out of U.S. courts, on the grounds that it should be litigated in Ecuador, closer to where the alleged harms occurred. But now the case is going badly for Chevron in Ecuador -- Chevron may be liable for more than $7 billion. So, the company is lobbying the Office of the U.S. Trade Representative to impose trade sanctions on Ecuador if the Ecuadorian government does not make the case go away.”

Have a good weekend
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

The 10 Worst Corporations of 2008
January 9th, 2009
What a year for corporate criminality and malfeasance!
http://www.corpwatch.org/article.php?id=15275

Wednesday, February 4, 2009

Strategic CSR - Chemicals

The article in the url link below provides an update on the implementation of the EU legislation REACH (Issues: Research and Development, p130). The legislation presents a distinctly different approach to product safety, in general, and chemicals, in particular, than the current U.S. model. While the burden in the U.S. lies with objectors to prove a chemical is dangerous, the EU legislation requires producers to prove a chemical is safe before it will be approved for use in certain kinds of products:

“The changes come at a time when consumers are increasingly worried about the long-term consequences of chemical exposure and are agitating for more aggressive regulation. In the United States, these pressures have spurred efforts in Congress and some state legislatures to pass laws that would circumvent the laborious federal regulatory process.”

Needless to say, U.S. firms (in particular) are protesting the measures which, they claim, “will add billions to their costs.” In many respects, however, the legislation, which will be phased in over a number of years, is already having its desired effect:

“It is difficult to know exactly how the changes will affect products sold in the United States. But American manufacturers are already searching for safer alternatives to chemicals used to make thousands of consumer goods, from bike helmets to shower curtains.”

The article argues that the legislation represents a fundamentally different philosophical approach between the U.S. and Europe regarding the role of for-profit firms in society:

“From its crackdown on antitrust practices in the computer industry to its rigorous protection of consumer privacy, the European Union has adopted a regulatory philosophy that emphasizes the consumer. Its approach to managing chemical risks, which started with a trickle of individual bans and has swelled into a wave, is part of a European focus on caution when it comes to health and the environment.”

In the U.S., on the other hand:

“… laws in place for three decades have made banning or restricting chemicals extremely difficult. The nation's chemical policy, the Toxic Substances Control Act of 1976, grandfathered in about 62,000 chemicals then in commercial use. Chemicals developed after the law's passage did not have to be tested for safety. Instead, companies were asked to report toxicity information to the government, which would decide if additional tests were needed. In more than 30 years, the Environmental Protection Agency has required additional studies for about 200 chemicals, a fraction of the 80,000 chemicals that are part of the U.S. market. … The EPA has banned only five chemicals since 1976.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Chemical Law Has Global Impact
by Lyndsey Layton, Washington Post
June 12th, 2008
http://www.corpwatch.org/article.php?id=15092

Monday, February 2, 2009

Strategic CSR - Recycling

The article in the url below demonstrates the potential danger to the CSR debate in the face of an economic recession:

“Trash has crashed. The economic downturn has decimated the market for recycled materials like cardboard, plastic, newspaper and metals.”

The corresponding wild fluctuation in the market price for specific recycled materials mean that it is sometimes cheaper for firms to dispose of them (to avoid storage costs), than sell them on the market:

“On the West Coast, for example, mixed paper is selling for $20 to $25 a ton, down from $105 in October, according to Official Board Markets, a newsletter that tracks paper prices. And recyclers say tin is worth about $5 a ton, down from $327 earlier this year.”

The article makes the case that, while the market for recycled materials has always been sensitive to changing economic conditions, the sharp drop in demand from China in the current crisis has increased the extent of the price swings:

“China's influence is so great that in recent years recyclables have been worth much less in areas of the United States that lack easy access to ports that can ship there.”

The only thing saving city recycling programs in the US at present is that even though they are now paying to have recycled materials picked up (before they received money), it is still cheaper than having to pay to take them to the landfill.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Back at Junk Value, Recyclables Are Piling Up
By MATT RICHTEL and KATE GALBRAITH
1395 words
8 December 2008
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2008/12/08/business/08recycle.html