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

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Monday, February 28, 2011

Strategic CSR - HSBC

The article in the url below profiles a recent HSBC ad that is part of its “the world's local bank” campaign. The tag lines used in the campaign’s ads are “Never underestimate the importance of local knowledge” and “We find potential in the most unexpected places. Do you?” They focus on spreading cultural awareness by stressing how different cultures view the same issue. One ad I have seen, for example, shows photos of three balls: an American football, a UK football, and an Australian rules football – all with the same “football” caption underneath:

The ad featured in the article below, however, takes the idea of cultural relativity a little far and demonstrates the cultural ineptitude the campaign is trying to defeat:

The ad features a photograph of a desert oasis. In the background are some electrical lines, and in the foreground a lone, robed figure stands behind an old-fashioned video camera. Beside the image is text: ‘Only 4% of American films are made by women. In Iran it's 25%,’ HSBC informs us. ‘We find potential in the most unexpected places. Do you?’

The article, admittedly an op-ed written by an associate editor at the WSJ (so a little prone to an overly-sensitive reaction to such issues), pillories the bank:

Just like that, the banking behemoth reveals the danger of bubble-gum corporate cosmopolitanism: Every now and then, you might suggest that a murderous theocracy is actually a progressive place.

HSBC, which attempted to defend itself by claiming that the ad “deliberately make[s] no judgment and instead encourage[s] debate and discussion so that people make their own judgments” has withdrawn this particular ad. Interestingly, however, HSBC “continue[s] to do business in Iran.

Take care

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A Banking Giant's Moral Bankruptcy on Iran
By David Feith
737 words
31 December 2010
The Wall Street Journal

Friday, February 25, 2011

Strategic CSR - Carbon

With the prospects of Congress passing any kind of carbon emissions legislation in the near future close to zero, the article in the first url below reports that the voluntary market for carbon trading in the U.S. is being wound down:

The owner of the US's only nationwide cap-and-trade market has signalled the death of the seven-year-old industry, saying companies were no longer interested in trading carbon emissions credits in the absence of government legislation.

In spite of initial support from a number of large corporations, the incentive to participate was tied to the prospect for meaningful legislation passing that placed a price on carbon and contained disincentives for over-use:

Although CCX's market is voluntary, since launching in 2003 it attracted large US companies such as Ford, Bank of America, Cargill, IBM and Intel. … [Such firms] don't want to continue to trade voluntarily in the absence of any credit for their work by the current administration.

In contrast, the article in the second url below outlines various policy initiatives being introduced by the U.K. government that are designed to create a minimum (“floor”) price for carbon:

The Treasury has set out three potential price trajectories for the short to medium term: aiming at £20, £30, or £40 a tonne by 2020. By 2030, the goal is a carbon price of £70 a tonne.

The government hopes that the certainty for business associated with the price floor will create the economic incentives necessary to redirect investment into capital intensive non-carbon or renewable projects and to stimulate R&D into other alternatives to fossil fuels. It will also reduce the U.K.’s total carbon emissions:

More than £110bn is required by 2020 to replace old nuclear reactors, upgrade the electricity grid and fund renewables, and a large majority of that investment needs to come from the private sector. … The floor price is predicted to increase investment in new low carbon capacity by up to 11 gigawatts as well as significantly reduce emissions from UK electricity generation.

Have a good weekend.

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End of US carbon trading looms
By Hal Weitzman in Chicago
393 words
1 November 2010
Financial Times

Carbon pricing: UK government wants floor price certainty
Energy intensive businesses face bigger bills if the UK government sets a minimum price for carbon
Jane Burston
January 24, 2011
Ethical Corporation Magazine

Wednesday, February 23, 2011

Strategic CSR - Wikileaks

The article in the url below focuses on the evolving role of Wikileaks in online transparency and asks whether it is “only a matter of time before confidential information about large companies” (rather than governments) is exposed on the whistle blower website:

Wikileaks has already claimed that it has damaging documents against a major US bank, widely speculated to be Bank of America, and also against BP. And Wikileaks continues to acquire more data, including details about Swiss bank accounts in January.

This got me thinking about whether this kind of insurgency approach to transparency is a social good. Take the issue of Swiss bank accounts, for example:

Embarrassing material relating to the Swiss bank Julius Baer, the Kaupthing Bank in Iceland, Barclays, JP Morgan and the Toll Collect Consortium in Germany has already been published by Wikileaks. And Assange continues to say he would like to pressure companies to behave ethically.

But, the only reason this activity is illegal is due to arbitrary (and antiquated) country laws (complete with all the nationalistic biases inherent in the political decision making process), and not because there is anything absolutely unethical about storing assets in a foreign country. It hardly sounds like a moral crusade!

In an interview with Forbes Magazine that is quoted in the article, Julian Assange (the Wikileaks founder) says that:

Wikileaks means it’s easier to run a good business and harder to run a bad business, and all CEOs should be encouraged by this.

But “good” and “bad” business by whose definition? Who made Julian Assange the arbiter of ethical business practices – especially since he seems so ethically challenged in his personal behavior (see Swedish court case)?

What is the solution for firms to this increased threat of transparency – better IT security or better behavior? Unfortunately, the article seems to focus on encouraging firms to install better IT security first and foremost. The article finishes rather weakly with the broad question:

Could Wikileaks change reporting and disclosure as we know it?

Maybe, but not necessarily for the better.

Take care

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Wikileaks: Could big business be next?
Unethical companies could be the next target of Wikileaks
Rajesh Chhabara
January 27, 2011
Ethical Corporation Magazine

Monday, February 21, 2011

Strategic CSR - Facebook

The article in the url below, written by a Manager at Facebook, reflects on the negative consequences of anonymity for the general level of civility of online discourse. Anonymity diminishes the level of civil exchange online, the article reasons, because it removes accountability. You can’t be punished for something if no one knows you did it. Freed of these restraints, the extremes of human nature have a tendency to emerge:

Psychological research has proven again and again that anonymity increases unethical behavior. Road rage bubbles up in the relative anonymity of one's car. And in the online world, which can offer total anonymity, the effect is even more pronounced. People -- even ordinary, good people -- often change their behavior in radical ways. There's even a term for it: the online disinhibition effect.

The author advocates the removal of anonymity as the solution to the problem. At Facebook, real names and photos are posted next to online comments and the author advocates the widespread adoption of this convention by all online content providers.

The article resonated with me because I wondered if this phenomenon also helps explain why otherwise ethical individuals commit unethical acts at work. From falsifying financial accounts, to polluting rivers, to operating unsafe manufacturing plants, to misrepresentative product ads, there are plenty of examples of corporate actions committed by individuals that none of us would do at home or in our communities. The answer may be because at work people represent their organizations rather than themselves, because the blame for a poor decision is often difficult to assign retrospectively (when everyone is fighting to avoid being blamed), and because society does such a poor job of holding individuals to account for errors (accidental or criminal) committed by firms.

A degree of moral hazard enters the decision making process as a result. While individuals are rewarded for their behavior if they can get away with it (e.g., decreasing costs by avoiding crisis prevention planning for the rare eventuality), they are rarely held to full account if the “once-in-a-lifetime” disaster occurs.

Apart from Tony Hayward, can anyone name another individual at BP who has been held in any way responsible for the Gulf oil spill? Can anyone name anyone who has been held legally responsible?

Take care

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Where Anonymity Breeds Contempt
1089 words
30 November 2010
The New York Times
Late Edition - Final

Friday, February 18, 2011

Strategic CSR - Global Warming

The graphic in the url below from The Economist presents the reality of global warming in very stark terms.

It shows decade average global surface temperatures from the 1850s through to the first decade of the twenty-first century.

Needless to say, the picture presented is not a very positive one.

Additional information from the U.S. National Oceanic and Atmospheric Administration, which produced the report containing these data, can be found at:

Have a good weekend.

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Warming world
A clearer picture of global warming since the 1850s
Jul 29th 2010
The Economist

Wednesday, February 16, 2011

Strategic CSR - Google

Of the many challenges firms face as a result of the increasing importance of the Internet and technology, I think this issue is particularly interesting: To what extent should employers monitor and attempt to influence what an employee does in his/her free time?

I have seen a few articles about this issue as the ability for people to broadcast their opinions and exploits is magnified due to the rising importance of social media. A provocative column by Christopher Caldwell a while ago in the FT, for example, asked whether a Washington Post reporter blogging in a personal capacity was still representing his newspaper and, therefore, could be punished for writing things detrimental to his reputation as an impartial reporter, or whether it was none of his employer’s business what he wrote (‘Mistweeted and Misunderstood,’ September 3, 2010).

In this light, consider the articles in the two urls below that appeared in The New York Times and Wall Street Journal on the same day last week. The first article features firms’ increasing desire to limit the number of employees who smoke – citing lost productivity and increased health costs as motivating factors:

More hospitals and medical businesses in many states are adopting strict policies that make smoking a reason to turn away job applicants, saying they want to increase worker productivity, reduce health care costs and encourage healthier living. … The new rules essentially treat cigarettes like an illegal narcotic. Applications now explicitly warn of ''tobacco-free hiring,'' job seekers must submit to urine tests for nicotine and new employees caught smoking face termination.

Contrast this with Google’s hands-off approach to its employee, Wael Ghonim (Google’s Mideast regional marketing executive), who played a central role in starting the recent protests in Egypt that ended up over-throwing the regime:

Mr. Ghonim is on leave during his activism in Egypt and is acting on his own, not as an agent of the company. … What employees do on their own time is their own private matter, not something the company should govern, and therefore not something the company is concerned about.

While I can appreciate the potential brand risk posed by an employee who is pursuing activities privately that potentially threaten the business interests of a firm (to lesser or greater extents), it is also true that firms now attempt to regulate employees’ lives in ways that would have been unthinkable a short time ago.

I am not sure what the best answer is here, but it is something to which the socially responsible firm will increasingly need to be sensitive. As Caldwell concludes:

The internet and the new media are commonly described as a liberating, individualising force. In many respects, though, they are replacing informal relationships with surveilled ones. Mr Wise was wrong to put up his phoney tweets. The Post was within its rights to discipline him. But it is hard not to worry about the principles laid down in the process of doing so. The net result of the internet may be to invite the boss into what used to be the stronghold of one’s private life.

Take care

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Hospitals Shift Smoking Bans To Smoker Ban
By A. G. SULZBERGER; Alain Delaqueriere contributed research.
1287 words
11 February 2011
The New York Times
Late Edition - Final

How to Handle Employee Activism: Google Tiptoes Around Cairo's Hero
By John Bussey
824 words
11 February 2011
The Wall Street Journal

Monday, February 14, 2011

Strategic CSR - Soda Tax (II)

Given Friday’s Newsletter about Save the Children’s abandonment of its support for a soda tax, I was encouraged to see this full-page ad that appeared in The New York Times last week:

The ad, which was sponsored by Coca-Cola, Dr. Pepper, PepsiCo, SunnyD, and the American Beverage Association, featured the following copy:

America’s beverage companies are adding new labels to the front of every can, bottle and pack we produce—and displaying the total calories per container on beverages 20 ounces or smaller. We’re working together to provide calorie information right up front, so you can choose what’s right for you.

Not a huge event in itself, but a positive incremental step that speaks to food/beverage firms’ willingness to be held accountable for the products they produce by providing consumers with the information they need to make informed decisions about their food and drink consumption.

More information about the campaign can be found at the American Beverage Association host for the site:

Take care

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Friday, February 11, 2011

Strategic CSR - Soda Tax (I)

Call me a cynic, but this story struck me as a convenient coincidence:

Over the last year, Save the Children emerged as a leader in the push to tax sweetened soft drinks as a way to combat childhood obesity. The nonprofit group supported soda tax campaigns in Mississippi, New Mexico, Washington State, Philadelphia and the District of Columbia. At the same time, executives at Save the Children were seeking a major grant from Coca-Cola to help finance the health and education programs that the charity conducts here and abroad, including its work on childhood obesity. The talks with Coke are still going on. But the soda tax work has been stopped.

When the COO for Save the Children was interviewed, she said there was no connection between the negotiations with Coke and the charity’s decision to drop its campaign advocating for a soda tax:

A $5 million grant from PepsiCo also had no influence on the decision, she said.

Needless to say:

Both companies fiercely oppose soda taxes.

The rationalized argument for halting the campaign was that it was “too controversial” and “[didn’t] fit with the way that Save the Children works.

There are three types of organizations in society – for-profit firms, nonprofit organizations, and regulatory agencies. For-profit firms are the major organizations in society – they are able to utilize market forces to combine scarce and valuable resources in the most efficient ways. The value that nonprofits and regulators bring, however, is in acting to correct market gaps or abuses. All three sectors need to be strong and independent in order for social value to be maximized. To the extent that one organizational form is inefficient or corrupted by another, society loses.

It seems to me that, if there is any campaign in which a children’s charity that is concerned about childhood obesity should be involved, it is acting to limit the average daily calorie intake for the most impressionable among us.

Representatives of both Coca-Cola and Pepsi said they had not asked the charity to alter its position on soda taxes.

I am sure they didn’t have to.

Have a good weekend.

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Save the Children Backs Away From Soda Tax Campaign
1120 words
15 December 2010
The New York Times
Late Edition - Final

Wednesday, February 9, 2011

Strategic CSR - Fairtrade

The article in the url below contains some revealing facts and figures about the growing industry for Fairtrade-labeled products:

Although Fairtrade products represented only 0.01 per cent of worldwide food and beverage sales in 2009, their revenues rose by more than 40 per cent annually between 1998 and 2007, by 22 per cent in 2008 and by 15 per cent in 2009. In some niches, the movement exercises considerable clout. Although Fairtrade accounted for only 1 per cent of the worldwide coffee market last year, it captured 20 per cent of UK retail sales of ground coffee.

The quotes were taken from a report released last November by the Institute of Economic Affairs (IEA) titled ‘Fair Trade without the Froth.’ Interestingly:

The cost of obtaining Fairtrade certification is relatively high: £1,570 in the first year. … In 2007, the four leading Fairtrade-certified nations were Mexico, Colombia, Peru and South Africa.

The conclusion by the free-market-oriented IEA is that, contrary to many who believe in efficient markets, Fairtrade goods do not distort the free interplay of demand and supply. In essence, Fairtrade goods are luxury items, for which there is a demonstrated market demand:

Buying Fairtrade chocolate no more distorts the chocolate market than buying a Louis Vuitton handbag distorts the handbag market. In both cases buyers are sending signals: that they are prepared to spend more on a bag with a prestigious label, or on chocolate that provides cocoa growers with a better life.

Take care

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No markets were hurt in making this coffee
By Michael Skapinker
803 words
9 November 2010
Financial Times
Asia Ed1

Monday, February 7, 2011

Strategic CSR - Seventh Generation

The article in the url below gives a good indication of the extent to which Walmart’s sustainability drive is genuine:

For years, Seventh Generation Inc. co-founder Jeffrey Hollender liked to say "hell would freeze over" before his company's environmentally friendly household products would be sold by Wal-Mart Stores Inc. He feels differently now. Starting next month, Seventh Generation staples, including laundry detergent, dish soap, all-purpose sprays and disinfectant wipes, will be sold in about 1,500 Wal-Mart stores. By September, other cleaners, diapers and baby wipes will be available on

The combination gives Seventh Generation the mainstream outlet it has been seeking and Walmart expanded access to the growing environmentally conscious household cleaning market:

‘We're not just putting [Seventh Generation's] products on the shelf,’ says Al Dominguez, Wal-Mart's vice president of household chemicals and paper goods. ‘We want their help in developing a category that's more sustainable.’

In general, Walmart has come a long way:

Five years ago, the world's largest retailer by revenue began setting goals to reduce its energy consumption, cut waste and introduce more sustainable products. Last year, Wal-Mart introduced a program to screen chemical-based products for ingredients that could have harmful health or environmental effects.Seventh Generation and Wal-Mart are both members of the Sustainability Consortium, a group of manufacturers, retailers, nongovernmental organizations and government officials that is developing tools and strategies to evaluate the environmental and social impacts of products' lifecycles. Wal-Mart plans to eventually incorporate the data into a sustainable product index, which it plans to make available to consumers.

Ultimately, it is all about scale for a firm that wants to disseminate its message as widely as possible:

“‘At this point, we now believe that we can have a bigger impact by partnering with Wal-Mart than by shunning it,’ Mr. Hollender wrote.

Take care

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Adversary's Clean Start With Wal-Mart
After Years Criticizing Retailer's Environmental Sins, Seventh Generation Now Partners on Efforts, Puts Products on Shelf
July 26, 2010

Saturday, February 5, 2011

Strategic CSR - CO2

The article in the url below presents the scale of the climate change problem in graphical form. It contains various representations of the relative carbon dioxide emissions of different countries, focusing on the U.S. and China. These two countries currently account for 19.9% and 21.4% of global emissions respectively—figures that are projected to continue rising absolutely and be 15.9% and 29% respectively by 2030:

The article also shows the disparities between the two countries on a per capita basis (for example, while the U.S. in 2005 had 461 cars per thousand people, the comparable number in China was only 15 per thousand), which highlights the difficulties of managing China’s economic expansion in a sustainable manner:

Each will have to use much less coal-fired electricity, for example, and opt instead for more renewables. Above all, people will have to use less energy. In the case of China, that means more energy than today, but less than they might have used without emissions curbs. In the US, it means using less than today - a difficult adjustment.

Have a good weekend

Bill Werther & David Chandler
Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)
© Sage Publications, 2011

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The G2: the key to CO2
Ed Crooks and Valentina Romei
484 words
9 December 2009
Financial Times
Asia Ed1