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 30, 2009

Strategic CSR - Dolphins

The Cove (http://thecovemovie.com/) is a recently released documentary about an annual cull of dolphins in Taiji, Japan. You can see the trailer for the movie at: http://www.youtube.com/watch?v=OYKNCN1ESZM. It has gained a lot of attention in the West because of the brutality with which the animals are killed and the apparent pointlessness of it all—the market for dolphin meat in Japan is small (as it also is for whale meat). While reviews of the film have largely been positive (in the sense of it being a worthy film), a review in the Financial Times asked some thought-provoking questions that suggest a willingness in the West to moralize without sufficiently questioning equally brutal realities closer to home:

The Cove is weakened only by a few unanswered questions, which the film sheers past in its headlong course. Why is it worse to slaughter dolphins than to slaughter cows or pigs? (Just because dolphins are cuter?) What of Japan's argument that culling dolphins helps preserve smaller fish? And what is so merciful - in comparison with the revealed brutality of Taiji's killing methods - about western slaughterhouses and murder-for-meat industries?

Have a good weekend.
David

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


The grooming of an ingénue
By Nigel Andrews
1109 words
29 October 2009
Europe Ed1
15

Wednesday, October 28, 2009

Strategic CSR - Exelon

The article in the first url below reports Exelon’s decision to resign its membership of the U.S. Chamber of Commerce because of the Chamber’s position on climate change. As Exelon’s Chairman, John W. Rowe, states, dramatically claiming the moral high ground:

“The carbon-based free lunch is over,'' said John W. Rowe, Exelon's chief executive. ''Breakthroughs on climate change and improving our society's energy efficiency are within reach.”

Exelon was one of a number of organizations to leave the Chamber of Commerce in recent months over this issue. Predictably, environmental campaigners and sympathetic politicians interpreted the resignations as indicators of progress:

“… a sign that the business community's opposition to global warming legislation is weakening. In their view, that improves the chances that a global warming bill that narrowly passed the House in June might also pass the Senate.”

As the article in the second url below points out, however, an equally likely cause of the decision was financial. Utilities such as Exelon stand to gain considerably from the climate legislation that is working its way through the U.S. Congress that favors nuclear powered electricity over coal powered electricity:

“"The carbon-based free lunch is over," declared Exelon CEO John Rowe, neglecting to mention that his company's free lunch is only beginning. Under the House's climate-change bill, a few utilities -- primarily those that have made big bets in renewable and nuclear energy -- are poised to clean up once Congress hands them carbon emission credits. The bill sets aside 35% of the free credits for utilities. Exelon and other "renewable" utilities will get a huge piece of that pie.”

Take care
David

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


Climate Bill Splits Exelon And Chamber Of Commerce
By CLIFFORD KRAUSS and KATE GALBRAITH
1156 words
29 September 2009
Late Edition - Final
1
Rent-Seekers Inc.
By Kimberley A. Strassel
902 words
2 October 2009
A17

Monday, October 26, 2009

Strategic CSR - The Rights of Corporations

The article in the url below is a recent editorial in the NYT that discusses “the rights of corporations” in relation to a case the U.S. Supreme Court is currently hearing:

“… the court is considering what should be a fairly narrow campaign finance case, involving whether Citizens United, a nonprofit corporation, had the right to air a slashing movie about Hillary Rodham Clinton during the Democratic primary season.”

Instead of deciding the case in terms of this narrow point of law, however, the Court decided to expand its consideration to include broader implications under the legal doctrine of “corporate personhood”:

“The courts have long treated corporations as persons in limited ways for some legal purposes. They may own property and have limited rights to free speech. They can sue and be sued. They have the right to enter into contracts and advertise their products. But corporations cannot and should not be allowed to vote, run for office or bear arms. Since 1907, Congress has banned them from contributing to federal political campaigns -- a ban the Supreme Court has repeatedly upheld.”

It would be interesting to see an editorial from the WSJ on the same case to see an alternative perspective (for an op-ed piece, see: http://online.wsj.com/article/SB10001424052970203585004574393250083568972.html), but it is clear that the NYT does not think the Court’s current view of corporate rights should be expanded. The NYT also thinks a narrow interpretation of a corporation’s rights represents a purer reflection of the original intent of the Constitution:

“John Marshall, the nation's greatest chief justice, saw a corporation as ''an artificial being, invisible, intangible,'' he wrote in 1819. ''Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence.''”

In particular, there are strong arguments to be made that corporations are not the same as individuals in their ability to amass resources that can then be used to distort the political debate. As such, the editorial argues that, in areas of political speech in particular, the Court should be wary of expanding corporations’ Constitutional rights to allow these kinds of polemical statements to be made.

Take care
David

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


The Rights of Corporations
Editorial
623 words
22 September 2009
Late Edition - Final
30

For an article that highlights the broader implications of a change in the campaign finance law regarding corporations, see: http://www.commondreams.org/view/2009/09/09-11

Friday, October 23, 2009

Strategic CSR - Feedback

The article in the url below reports on a CEO, Stephen Martin, who decided to go undercover to find out what his employees really thought about the firm and the work they do on a day-to-day basis. In a two week period, the boss completed 10 separate shifts, at multiple locations, disguised as a normal employee:

“What lessons has he learnt? "Our key messages were just not getting through to people," Mr Martin says. … You have to communicate with people on their terms, and it is different for every location. One size does not fit all." For example, Mr Martin found that an apparently sensible idea - encouraging his workers to take a tea-break where they were working rather than coming back to a canteen - was taken to mean that the break had been cut.”

The CEO was able to go unnoticed for the two weeks because he was a relatively new appointment, who also grew a beard to further disguise himself. The CEO relished the opportunity to obtain unvarnished feedback that would never be communicated directly to management:

“Leaders may know exactly what they want to see happening. They send out messages down the management line. Employees ought to understand. But between the top table and the shop-floor something goes wrong. Leadership teams can be scarily ignorant of how badly their wishes have been distorted, and how much unhappiness there is among those on the receiving end.”

Interestingly, the CEO was followed around by a camera crew, using the cover story that they were filming a documentary on how an administrative worker would fare in a demanding manual labor job. The program:

“… called Undercover Boss, which will air on British television (Channel 4) in [June] and then in a US version (CBS) [later] this year.”

Have a good weekend.
David

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


Undercover boss gets the communication message
Stern, Stefan
899 words
9 June 2009
London Ed1
16

Wednesday, October 21, 2009

Strategic CSR - Pharmaceutical Firms

The article in the url below describes legislation recently passed in Vermont requiring all firms that supply doctors with drugs or medical devices to declare all payments made to doctors in the state:

“The law, scheduled to take effect on July 1, is believed to be the most stringent state effort to regulate the marketing of medical products to doctors. It would also ban nearly all industry gifts, including meals, to doctors, nurses, medical staff, pharmacists, health plan administrators and health care facilities.”

Although other states, such as Minnesota and Massachusetts, restrict payments and gifts to some degree, the Vermont law is much more stringent. It requires the declaration of all payments (no matter how small) to all doctors with the authority to prescribe or administer a firm’s products:

“The law is also the first to ban all free meals, long a favorite gift in marketing to doctors. The law also closes a loophole in previous regulations that had allowed companies to keep specific expenses private by claiming them as trade secrets.”

The size of existing payments and gifts to doctors, in Vermont alone, is considerable:

“Makers of medical products spent about $2.9 million in fiscal year 2008 on marketing to health care professionals in Vermont … . Of Vermont's 4,573 licensed health practitioners, almost half received remuneration, including payments for lectures, meals or lodging from pharmaceutical companies.”

Although fairly widespread, it is the concentration of payments where the potential for corruption grows stronger:

“Of the $2.9 million spent in Vermont, for example, about $1.8 million went to only 100 health care providers. That meant only about 4 percent of doctors received 60 percent of the payments.”

Take care
David

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

Doctor Gifts To Be Public In Vermont
By NATASHA SINGER
930 words
20 May 2009
Late Edition - Final
1

Monday, October 19, 2009

Strategic CSR - Green & Black's

The article in the url below is an interview with Craig Sams, the founder of Green & Black’s, the organic chocolate maker that was bought by Cadbury’s in 2005:

“The Green & Black’s Maya Gold Fairtrade brand, produced by a group of smallholders in Belize, was launched in 1994 and recently reached its 15th anniversary. With regard to organic dark chocolate, [Sams] adds: “I figured if I wanted it there would probably be 10,000 or 15,000 people out there who would want it and it started to be an interesting business proposition and worth investing in.””

Sams believes that social enterprises, by definition, encourage stronger bonds among stakeholders:

“The lower capital base, “encourages co-dependency with all the stakeholders in your business”, and the result is a more “collaborative and cooperative approach”.”

In addition to detail about the firm’s founding and current operating principles, Sams provides insight regarding the takeover by Cadbury’s. While acquisitions of social enterprises by multi-nationals are increasingly common, as some large firms find it is easier to buy their CSR-sheen than build it themselves, the number of successful partnerships is relatively rare:

“Sams concedes that “things could have gone wrong” in selling to a multinational, and believes Cadbury’s own high ethical standards and its willingness to retain the Green & Black’s ethos and allow it to inform its core business, for example with regard to organic farming and the recent decision to switch Dairy Milk to Fairtrade, have been crucial.”

Take care
David

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


Ethical brands – How Green & Black’s struck chocolate gold
Creativity, pragmatism and zeal define social entrepreneur Craig Sams, founder of iconic chocolate maker Green & Black’s
Ben Cooper
May 5, 2009
Ethical Corporation Magazine
http://www.ethicalcorp.com/content.asp?contentid=6456

Friday, October 16, 2009

Strategic CSR - Fantasy Unsports

I think this website, which I saw mentioned in the WSJ, offers an interesting comment on our times:


Advertised under the banner, “they screw up, you score points,” the website operates in a similar way to any fantasy sports league, but gives points to the players you pick who attract attention for all the wrong reasons. As the website explains:

Fantasy UnSports is a bold new endeavor in fantasy sports, one where the actual sports mean very little. We award points based on what athletes do everywhere EXCEPT on the field.  DUI?  50 points.  Failed drug test?  25 points.  Homicide?  500 points.  15 touchdowns in a season?  Zero, zip, nada.  I don’t care.”

As the website’s author eloquently puts it:

Why not have a fantasy sports game that awards points for all this ridiculous stuff the media focuses on?  Why not predict and track the biggest train wrecks in football for the behavior we all secretly care more about anyway?

With our society full of C-list celebrities and attention-seeking athletes, the fight for the Superbowl is going to be tough!

Have a good weekend.
David

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

Wednesday, October 14, 2009

Strategic CSR - Jonathan Porritt

The article in the url below is an interview with Jonathan Porritt, former Director of Friends of the Earth and “chief environmental adviser to the UK prime minister.” He left his position last July:

“Porritt, for nine years chairman of the Sustainable Development Commission (SDC), lauded the recently published strategy to build a low-carbon economy. This aims for the UK to cut greenhouse gas emissions by 34%, from 1990 levels, and source 15% of energy from renewable, by 2020. … But at its core, he says, the government still does not get it. Sustainability continues to take a back seat to consumer-driven economic growth.”

His ideas of what a sustainable economy would look like, which he outlines in the interview, are detailed in a SDC report released in March, 2009:

““Let me be absolutely clear up front,” Porritt says, seconds into the conversation, “we do not advocate a zero growth model.” Economic growth in developed nations such as the UK should cease, he says, but it should continue in the developing world, so that billions might escape poverty. In the developed world, growth is the cornerstone of modern macroeconomics upon which politicians win and lose elections. And Porritt is advocating its overthrow.”

I am not so sure. Macro-economic policies are blunt instruments with difficult-to-predict consequences and shaping a dynamic economy to achieve zero growth (perfect balance?) is no easy task. If we are to re-consider our fundamental economic model, it seems to me that the most important step is to account adequately for externalities in pricing. In other words, the price of a product should not only include the cost of production, but also include the cost of replenishing the raw material and disposing/recycling the waste after consumption. Putting a price on carbon is an important step in this process. If all firms are forced to incorporate externalities into the price of the finished product or service, many of the cheap items in our disposable economy will become significantly more expensive and businesses will be incentivized to produce sustainable alternatives. Rather than Porritt’s ‘revolution,’ I think this ‘evolution’ is a more realistic and achievable goal—as long, of course, there is the political will to implement it. But, then again; if there is insufficient political willpower for this idea, there is certainly insufficient political willpower to implement Porritt’s more radical idea.

Take care
David

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


The big interview: Jonathan Porritt – When real progress means standing still Business must see that zero growth is the future for developed economies, according to Jonathan Porritt
Eric Marx
Ethical Corporation Magazine
September 21, 2009
http://www.ethicalcorp.com/content.asp?contentid=6596

Monday, October 12, 2009

Strategic CSR - BP

The article in the url below indicates two worrying trends that have surfaced in recent months at BP:

“The head of BP's alternative energy division is to retire at the end of the month as the company sharply scales back its rate of investment in the business.”

In spite of the fact that Vivienne Cox (the executive who heads BP’s alternative energy division) will be replaced by her deputy, who is also a woman, campaigners complain that the recent departure of senior female executives at both BP and Shell represent a:

“… "female brain drain" at BP and Shell [that] "threatens to deter women from entering the oil and gas sector".”

In addition, the move builds on suspicion that the alternative fuels division at BP is not as high a priority as it had been under Lord Browne (BP’s previous CEO):

“In 2005, it set out a plan to invest $8bn in alternatives by 2015, and so far has been running ahead of schedule. But the rate of investment, which was rising fast in 2007-08, is now being scaled back again. Capital spending on alternatives was $1.4bn last year and is expected to be just $500m-$1bn this year. BP has also been cutting costs, especially in its solar business.”

Ever since the 2005 explosion at BP’s oil refinery in Texas that killed 15 people and injured 170, the firm has struggled to regain its standing in relation to CSR. The downgrading of its alternative energy division that the article outlines suggests the firm is falling further behind:

“BP has been criticised by environmentalists for failing to live up to the promise of its "beyond petroleum" slogan, introduced in 2000 under Lord Browne, the previous chief executive, and retained by Mr Hayward.”

Take care
David

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

BP's alternative energy chief to go
By Ed Crooks, Energy Editor
363 words
9 June 2009
London Ed1

Monday, October 5, 2009

Strategic CSR - Social Brands

The article in the url below adopts a pro-business argument regarding the power of social brands. While legislation and government regulation have the power to change laws, the article argues that corporate brands have the power to change attitudes and behavior:

“This is why brands’ cultural power, as well as their economic power, is potentially such a huge component of their social value. Using their brands to bring about social change is one of the most effective ways in which corporations can quickly move beyond corporate responsibility to demonstrate real leadership.”

This influence is particularly powerful in tackling complex social issues that cannot be legislated away:

“In 2004 Unilever began using Dove’s powerful position as a trusted, widely used brand to tackle the issue of self-esteem among women. The campaign arose from market research that showed that 90% of women were unhappy with the way they looked. Dove used powerful advertising campaigns to challenge narrow perceptions of beauty, and railed against the way the media and conventional advertising portrayed women.”

One measure of how effective the campaign has been in reaching its target audience is sales:

“Sales of Dove products increased by about 600% in the first two months, with an overall sales increase across the entire brand of 20% in the year after the campaign began.”

Unfortunately, the article equates an increase in sales with the success of the campaign, without providing any empirical evidence that the social issue it was designed to tackle, self-esteem among women, improved. It is certainly true that:

“A marketing campaign that packs a strong social punch is a powerful tool. But a brand that can take a new or existing product or innovation and build a campaign around the social or environmental benefits of this product can go further still.”

What is harder to measure, however, is the extent to which brand value correlates with social value.

Take care
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Brands focus: Social marketing – The power of suggestion Brave brands should exceed consumer expectations by using their power to pursue social causes, says Giles Gibbons
Giles Gibbons
Ethical Corporation Magazine
April 22, 2009
http://www.ethicalcorp.com/content.asp?contentid=6437

Friday, October 2, 2009

Strategic CSR - Harvard MBAs and Ethics

The article in the url below reports that 20% of the 2009 Harvard MBA graduating class signed an ethics oath:

“The M.B.A. Oath, a voluntary student-led pledge that the goal of a business manager is to ''serve the greater good.'' It promises that Harvard M.B.A.'s will act responsibly, ethically and refrain from advancing their ''own narrow ambitions'' at the expense of others.”

The article argues that the effect of Enron and the more recent financial crisis has been to heighten student interest in ethics and social responsibility, and that this project is moving beyond words into action:

“While this might easily be dismissed as a passing fancy -- or simply a defensive reaction to the current business environment -- business school professors say that is not the case. Rather, they say, they are seeing a generational shift away from viewing an M.B.A. as simply an on-ramp to the road to riches.”

The article also provides evidence that the student-led interest at top MBA schools is spreading beyond Harvard:

“A decade ago, Wharton had one or two professors who taught a required ethics class. Today there are seven teaching an array of ethics classes that [Diana C. Robertson, a professor of business ethics at the Wharton School of the University of Pennsylvania] said were among the most popular at the school.”

Have a good weekend.
David

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


A Promise to Be Ethical In an Era of Temptation
By LESLIE WAYNE
1048 words
30 May 2009
The New York Times
Late Edition - Final
http://www.nytimes.com/2009/05/30/business/30oath.html