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


Wednesday, February 27, 2013

Strategic CSR - Amazon II

In contrast to Monday’s positive Newsletter about Jeff Bezos, I have also seen Amazon lambasted for essentially being absent in the CSR/sustainability debate (e.g., http://www.guardian.co.uk/sustainable-business/amazon):

“When Greenpeace examined data centres run by big technology companies in a report called How Clean Is Your Cloud?, Amazon was given an F in three of four categories, ranking behind Yahoo!, Dell, Google and Facebook. On electronics recycling, Amazon is also a laggard. Best Buy takes back electronic waste, at no charge; Amazon does not take-back of its own.”

Another example:

“Amazon’s shipping operation consumes large amounts of energy and the company has been criticized in the past for a lack of transparency on environmental issues. The Carbon Disclosure Project released a report [in September 2011] naming Amazon as the largest company in the Global 500, by market capitalization, not to disclose its carbon performance.”

With this in mind, I am unsure how to process the article in the url below:

“Amazon launched Vine.com, a shopping site that sells only green products, including organic food, apparel, accessories and cleaning supplies made by  companies such as Seventh Generation, Method, Brita and Burt’s Bees.”

Is it greenwashing, merely an attempt to capture a growing market segment, or a genuine commitment to further the sustainability debate? There is some indication that the move is serious:

“Vine reviews claims of vendors to verify products are either organic, natural, energy- or water-efficient, run on their own renewable energy, made from sustainable materials or contribute to a healthier home, according to the company. Vine also reviews ingredient lists to make sure they don’t contain banned substances.”

As with most massive organizations, of course, the reality is no doubt a mix of good and bad. Another indication the launch might be serious, however, is that Vine.com (http://www.vine.com/) was acquired by Amazon in 2010. Although another example of a CSR-oriented, small independent firm being bought by a large multi-national, the acquisition suggests that the people running Vine.com are likely to be sincere. As such, in contrast to an organic Amazon initiative, there is the potential for Vine.com to extend its founding values across Amazon’s broad range of operations:

“Amazon plans to triple the number of items shipped under its ‘Frustration-Free Packaging’ initiative this year, a program which pushes suppliers to cut out excessive and hard-to-open packaging. Amazon has said it hopes the program, which grew to 80,000 products last year, will not only alleviate ‘wrap rage,’ but reduce waste and lower shipping costs.”

Take care
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Amazon Launches Shopping Site for Green Products
September 27, 2012
Environmental Leader

Monday, February 25, 2013

Strategic CSR - Amazon

The article in the url below is an interview with Jeff Bezos of Amazon to complement his ‘appointment’ by Harvard Business Review as “the greatest living CEO.” The quotes below focus on his views on the importance of long-term thinking in his position:

“If you’re long-term oriented, customer interests and shareholder interests are aligned. … We take it as an article of faith that if we put customers first, other stakeholders will also benefit, as long as they’re willing to take the long-term view. And a long-term approach is essential for invention, because you’re going to have a lot of failures along the way.”

“… if we had always needed to see significant financial results in two or three years, then some of the most meaningful things we’ve done would never have been started—like Kindle, Amazon Web Services, Amazon Prime.”

“I do not follow the stock on a daily basis, because I don’t think there’s any information in it. The economist Benjamin Graham once said, ‘In the short term, the stock market is a voting machine. In the long term, it’s a weighing machine.’ We try to build a company that wants to be weighed, not voted on.”

Two thoughts—First, I love the Benjamin Graham quote; second, I thought the qualifier in the first quote, “as long as they’re willing to take the long-term view,” is revealing. It reinforces the view that corporate stakeholder responsibility is as important as corporate social responsibility (see Strategic CSR – Corporate Stakeholder Responsibility).

Take care
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


The Best-Performing CEOs in the World
By Morten T. Hansen, Herminia Ibarra & Urs Peyer
January – February, 2013
Harvard Business Review
pp.84-85 (article is pp.81-95)

Wednesday, February 20, 2013

Strategic CSR - Foxconn

The article in the url below is interesting because it challenges a Western-centric view of CSR in developing economies:

“Hon Hai in March said it would change its workplace practices after an audit by a U.S.-based nonprofit worker-safety group found widespread breaches of Chinese law and Apple policies at three plants, including the excessive use of overtime. Hon Hai responded by pledging that it would bring its overtime policies into alignment with Chinese law by next year, allowing workers to work no more than nine hours of overtime a week. The Taiwan-based company, also known as Foxconn, pledged to improve health and safety conditions at its campuses across China as well.”

In particular, the article raises the question of why we seek to impose our values on foreign cultures, especially when it is not clear that the imposition is welcome:

“But more than 15 workers on the Shenzhen campus said in interviews that they work more than the legal limit of nine overtime hours a week. A majority said they work 10 to 15 overtime hours and would prefer more, having left their distant homes to make money in this southern Chinese boomtown on the border of Hong Kong.”

More than not liking the reduced hours, however, these workers are positively angry at the thought:

“‘I think a lot of the more experienced people from the technology production lines will leave’ if the policy to limit overtime goes into effect, said a worker who asked to be identified only by his surname, Ma.”

This all puts Foxconn in a bind—caught between the rock of public opinion in the West (and the pressure it brings from  firms like Apple) and the hard place of pleasing its ambitious employees:

“‘We look at [overtime] very seriously, we look at how we can be in compliance, but at the same time [we are] working with our employees to strike a balance,’ said Hon Hai spokesman Louis Woo. He said the company has ‘heard the grumbles’ from employees about decreased overtime.”

Not only are the impositions increasing unrest among workers, but they have resulted in gradually rising wages across the board. As such, they are cutting into Foxconn’s already tight profit margin:

“The company's labor costs will rise by roughly $1.4 billion when the new labor policies roll out next year, according to a Bernstein Research estimate. Hon Hai's operating profit margin had declined since the second quarter of 2010 because of rising wages.”

And so we close the loop on the consequences of the imposition of our values overseas. If we are going to insist that firms like Foxconn treat their employees as they are treated in the West, then costs will rise and so will the prices of our beloved consumer electronics. Values are not cheap and we will see if Western consumers are willing to put their money where their mouths most often are.

Take care
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Foxconn Workers: Keep Our Overtime
By Paul Mozur
December 18, 2012
The Wall Street Journal
Late Edition – Final
B1

Monday, February 18, 2013

Strategic CSR - Dodd-Frank

When whole industries overstep the bounds of socially-determined acceptable behavior, the government steps into legislate. This intervention produced Sarbanes-Oxley in 2002, in response to the corporate scandals that occurred in the early years of this century (in particular, the collapse of Enron); as a result of the more recent Financial Crisis, it generated the Dodd-Frank Act in 2010:

“Wall Street has found a common enemy: the Dodd-Frank Act. After the industry’s aggressive risk-taking nearly toppled the financial system and the broader economy, Congress ushered in Dodd-Frank, the most significant regulatory overhaul since the Great Depression.”

This process is the basis of the Rational Argument for CSR (Chapter 1, p16). From this perspective, firms have an incentive to adopt a CSR perspective proactively because the alternative (i.e., government intervention) is usually not an efficient solution to whatever problem is being tackled:

“CSR is a rational argument for businesses seeking to maximize their performance by minimizing restrictions on operations. In today’s globalizing world, where individuals and activist organizations feel empowered to enact change, CSR represents a means of anticipating and reflecting societal concerns to minimize operational and financial constraints on business.”

Although they have no-one to blame but themselves, rather than self-reflection and altered behavior, the general response from many firms within the finance industry is resistance:

“Since the law was passed in 2010, banks and other financial institutions have sought to tone down the most onerous aspects of the law, fearful of the threat to their businesses and their bottom line.”

The potential for amendments is presented by the extensive nature of the law—it is large and, at the time of passing, undefined:

“The law takes up some 2,300 pages and touches nearly every corner of the banking industry. … As regulators have devised the myriad rules, Wall Street has embarked on an all-out lobbying blitz. The industry has doled out hundreds of millions of dollars, held regular meetings with regulators and bombarded federal agencies with public letters.”

As a result, and due to the excessive influence of money in modern politics, the industry’s efforts are beginning to bear fruit:

“The industry’s efforts have proved effective. Despite facing tight deadlines, regulators have completed only a third of the regulations mandated under Dodd-Frank. Another third of the rules are in the proposal phase, and the rest are in limbo.”

There are some good graphics that accompany the article and make aspects of the law a little more accessible:

Take care
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Deconstructing Dodd-Frank
By Ben Protess
December 12, 2012
The New York Times
Late Edition – Final
F12

Friday, February 15, 2013

Strategic CSR - Waste

The National Public Radio story in the url below demonstrates how a regional airport (Charlotte Douglas International in North Carolina) is dealing with a persistent problem—the “half a pound of garbage” that the average traveler leaves after every visit:

“But instead of just sending all that trash to the landfill, Charlotte has taken a different approach. It's the first airport to put worms to work dealing with trash.”

In short, the airport is trying to process internally all the twenty-five tons of daily waste generated by operations, rather than paying others to take it away for them:

“A dozen employees pluck out recyclables and sort through aluminum, plastic and more, so passengers don't have to do the sorting in the terminal. … Recyclables are crushed, baled and sold for cash. There are shirts sorted and laundered and donated, and plastic cups collected. (The shirts come from people who toss clothing when they suddenly discover their suitcases are too heavy.) The organic stuff — waste from airport restaurants, food scraps off planes, and the half-eaten Cinnabon that a traveler has tossed out — mixes in a big tank for a few days to start the composting process. Then it's time for the stars of this show to take over.”

The “stars” are 1.9 million worms that “eat half their weight a day” and process the organic material into compost that is then used to fertilize the flower beds on the airport’s grounds. Overall, the results are impressive:

“In the four months since this operation got under way, trash going from the Charlotte airport to the landfill is down an impressive 70 percent.”

The worms are central players:

“Worm poop. Go ahead and giggle. Charlotte officials sure did as they debated the $1.2 million it cost to launch the program. But they're not laughing now: The airport expects to be making money off its trash in five years.”

Have a good weekend
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


One Airport's Trash Is 2 Million Worms' Treasure
By Julie Rose
December 18, 2012
National Public Radio

Wednesday, February 13, 2013

Strategic CSR - Walgreens

The article in the url below is intended to focus on a new regulation being drafted by the Department of Labor that is designed to increase the number of disabled employees firms employ:

“… only about 20% of Americans with a physical or cognitive disability participate in the traditional workforce, and of that group 14% are unemployed--roughly twice the nondisabled rate. A regulation being pushed by the Department of Labor would try to improve those numbers by requiring any company with a federal contract worth $10,000 or more to give 7% of its jobs to people with disabilities. If passed, roughly 200,000 companies would be affected.”

In contrast to the debate surrounding this proposed regulation (and there are substantive reasons to believe the change will not produce the desired outcomes), what stayed with me after reading the article was the amazing metrics generated by disabled employees:

“As companies such as AMC Theatres, Home Depot, and Microsoft can attest, disabled workers can be a great asset. … New research from Walgreens suggests that this group makes for a particularly stable workforce. A study of its distribution centers by the American Society of Safety Engineers found that workers with disabilities had a turnover rate 48% lower than that of the nondisabled population, with medical costs 67% lower and time-off expenses 73% lower.”

Disabled employees are dependable and, in certain positions, much more efficient than non-disabled employees. Walgreens, more than many employers, has recognized this value and is willing to invest in these people in order to secure it:

“Doing this right takes time. The Walgreens disability outreach dates back to 2002, when Randy Lewis, then the company's senior vice president of supply chain and logistics, suggested making a new warehouse in Anderson, South Carolina, disability-friendly by switching from text-based to image-based equipment. The program launched in 2007 and was such a success that Walgreens next built the Windsor center, where roughly half of the staff has some manner of physical or cognitive disability. Windsor is the company's safest, most productive warehouse. Across Walgreens's 21 distribution centers, 10% of its employees are disabled; the company would like to increase that slice to 20%.”

Take care
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Disability Assurance
By Sara Cann
December 2012/January 2013
Fast Company Magazine
35-38

Monday, February 11, 2013

Strategic CSR - Guns

There isn’t much that can be said about the mass shooting at the Connecticut elementary school in December that hasn’t already been said. I thought the article in the url below, however, is an indication of the ripple effects of both the extreme nature of the tragedy, as well as the public debate it produced. Soon after the shootings, and after an apparent shift in the political debate about limiting gun ownership in the U.S.:

“An official at the California teachers’ pension fund, which has $750 million invested with the private equity firm, Cerberus Capital Management, was on the line, raising questions about the firm’s ownership of the Freedom Group, the gun maker that made the rifle used in the Connecticut school shootings. Hours later, at 1 a.m. on Tuesday, Cerberus said that it was putting the Freedom Group up for sale.”

This is not necessarily a good example of a firm making a decision based on any sense of social responsibility, but it does demonstrate a sensitivity to the concerns of a key stakeholder in a way that is notable, simply because it is uncommon:

“The move by Cerberus is a rare instance of a Wall Street firm bending to concerns about an investment’s societal impact rather than a profit-at-all-costs ethos.”

What makes the decision even more striking is that the financial impact of the decision is not at all clear:

“Yet in a sign of how deep the shooting rampage in Newtown, Conn., has resonated throughout the country, Cerberus signaled that it wanted to remove itself from the uproar over the nation’s gun laws in seeking to sell Freedom, which makes the Bushmaster rifle used in the massacre.”

This may simply be a ‘moment in time’ and, after a suitable period, things return to ‘normal.’ Even as an exception, however, the decision demonstrates the essential nature of corporate stakeholder responsibility—stakeholders holding firms to account for their actions in ways that better reflect the values theys eek to encourage and preserve.

Additional reporting on this story is available at:

Take care
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Dropping Its Guns
By Peter Lattman
December 19, 2012
The New York Times
Late Edition – Final
B1

Friday, February 8, 2013

Strategic CSR - Justin Bieber

Just when you think we have reached rock-bottom as a society in terms of socially responsible behavior, Justin Bieber is there to remind us that there are depths we have yet to explore:

“Pop star Justin Bieber is promoting a new prepaid debit card. The card, aimed at teens, has a monthly fee of $3.95 and assorted other charges, including ATM fees of 50 cents per balance inquiry and $1.50 per withdrawal. Prepaid debit cards are safer than credit cards, but can carry high fees.”

Have a good weekend
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


This Week: The Biebs Gets Carded
January 5-6, 2013
The Wall Street Journal
Late Edition – Final
B8

Wednesday, February 6, 2013

Strategic CSR - Mandatory vs. Voluntary

The article in the url below raises an important issue in the CSR debate, although it does not do it directly and does it in a context not related to CSR. Applied to a discussion about CSR, however, the article is instructive—Can and/or should firms be compelled to behavior more responsibly? Specifically, the article focuses on the absence of law compelling people to help others in distress. Even when the risk and cost to the person in a position to help is low, the social consequences of not helping are high:

“‘The expert swimmer, with a boat and a rope at hand, who sees another drowning before his eyes, is not required to do anything at all about it, but may sit on the dock, smoke his cigarette, and watch the man drown.’”

What is worse is that:

“If you voluntarily try to rescue someone, you may be liable if you then stop and the victim is harmed.”

The article explains the evolution of this situation in language commonly used to describe the laissez faire approach to capitalism often promulgated in the U.S.:

“The ‘no duty’ rule can be traced to the spirit of rugged capitalist individualism, the Darwinist idea that the common good is advanced through the struggles of selfish individuals.”

As such, the current law is defended in terms of its defining goals:

“One defense of the no-duty rule is that common law exists to prevent people from harming one another, not to compel people to help one another.”

A big part of the core argument behind Strategic CSR is a debate about whether more socially responsible behavior is best encouraged via mandated or voluntary actions. The resolution we settled on is that firms are more likely to implement CSR genuinely and substantively if they are convinced it is in their self-interest to do to (hence the focus on medium- to long-term stakeholder value). Central to this argument is the belief that firms are more likely to avoid or try and circumvent legislation if they are compelled to act. This debate is not fully resolved in my mind, however, as there are many grey areas in between the extremes (e.g., the rise of behavioral economics, see: Strategic CSR – Nudge) and the article below taps into these internal debates:

“A duty to help would not require bystanders to endanger themselves or provide help beyond their abilities; it could simply require warning someone of imminent danger or calling 911. … it would require us to accept our fundamental moral duty to help those in grave peril.”

The concept of moral duty is difficult to quantify because morals and values are subjective. As such, who gets to decide which morals/values apply and in what situations? More importantly, if I disagree with those morals/values, why should I be forced to comply with them? In spite of these very valid questions, however, asking them does not feel very satisfactory. I am currently drafting the third edition to the book and have made a more conscious effort to move beyond a self-interest argument alone, reemphasizing the importance of a CSR Filter as integral to the strategic process (a central argument in the second edition), but strengthening the need to embed that whole process within a framework of guiding values that set the parameters of decisions and guide all employees through the construction of the firm’s strategy, as well as the day-to-day implementation via operations. The work of John Mackey (Whole Foods Market) on conscious capitalism (http://consciouscapitalism.org/) is highly complementary to the argument we present in Strategic CSR and was instructive.

Take care
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Can the Law Make Us Be Decent?
By Jay Sterling Silver
November 7, 2012
The New York Times
Late Edition – Final
A25

Monday, February 4, 2013

Strategic CSR - Robots

The article in the url below raises some interesting and challenging questions at the intersection of technology and ethics. In particular, it examines how machines are increasingly becoming a part of how we alleviate various human conditions and, as such, how the law needs to recognize and accommodate these changes. For example:

"Is a prosthetic legally part of your body? When is it appropriate to amputate a limb and replace it with a robotic one? What are the legal rights of a person with 'locked in' syndrome who communicates via a brain-computer interface? Do brain implants and body-enhancement devices require changes to the definition of disability?"

In response to rapidly evolving technology, a research project has been established in Europe to address some of these questions and is due to report by 2014:

"The RoboLaw project is an effort to anticipate such quandaries and work out where and how legal frameworks might need to be changed as the technology of bionics and neural interfaces improves. … it brings together experts from engineering, law, regulation, philosophy and human enhancement."

But, these questions are not part of some academic exercise that politicians will have to go through in crafting future laws, they are real problems that judges and companies are dealing with in court today:

"If you are dependent on a robotic wheelchair for mobility, for example, does the wheelchair count as part of your body? Linda MacDonald Glenn, an American lawyer and bioethicist, thinks it does. Ms Glenn (who is not involved in the RoboLaw project) persuaded an initially sceptical insurance firm that a 'mobility assistance device' damaged by airline staff was more than her client's personal property, it was an extension of his physical body. The airline settled out of court."

Even more conceptually challenging is dealing with questions around how robotics and technology alter our understanding of what it means to be human:

"To what extent is [our humanity] defined by having a body of a particular shape, or by cultural factors? Technologies such as exoskeletons that provide increased strength and implants that improve memory will put both definitions under pressure. Human-enhancement researchers … are considering future technologies, such as embedded devices that enhance the senses or add new ones, and implants that improve memory or allow messages to be sent or devices to be controlled using thought alone. Such devices might initially be used to overcome disability, but could also be used to augment and increase the performance of the able-bodied."

The fields generated at the intersection of technology and ethics (e.g., bioethics, nanotechnology) are a minefield that we are only just beginning to wrap our minds around. And, as usual, the market is far ahead of the law, which is struggling to keep pace with both the growing complexity and speed of change.

Take care
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


You, robot?
September 1, 2012
The Economist Technology Quarterly
5

Friday, February 1, 2013

Strategic CSR - 2012

As the article in the url below reminds us, when there are so many reasons to criticize, you can sometimes lose sight of all the good things that are happening in CSR:

“It’s easy, amid the daily churn of downer headlines, to lose sight of the good stuff, the developments that signifies a marker for progress.”

With this in mind, here are a selection of the fifteen highlights of the best that happened in terms of sustainability in 2012 (according to GreenBiz.com):
  • Marks & Spencer announced that it had sold one billion sustainable products. Over a third of the items it sells now boast some form of sustainability credential.
  • The U.K. government said it will introduce mandatory carbon reporting rules requiring around 1,800 of the country's largest listed companies to report annually on their greenhouse gas emissions.
  • Whole Foods became the first major North American retailer to stop selling unsustainable, or red-listed, seafood, a determination by the Monterey Bay Aquarium and the Blue Ocean Institute that the fish species is being overfished or that current fishing methods harm non-target marine life or habitats. 
  • Nike’s adopted a waterless dyeing technology that uses recycled carbon dioxide to color synthetic textiles. The process could eliminate the use of countless billions of gallons of polluted discharges into waterways near manufacturing plants in Asia.
  • Puma published a detailed environmental profit & loss statement for 2010, valuing the costs to the planet incurred by its operations across its supply chain.
This list reminds me again that for-profit firms are central to the kind of society that we want to construct. They are the best way that we have found to organize and distribute scarce resources in the most efficient and socially constructive way. For-profit firms need to be a big part of the solution, which is why the business school is such an important part of a university education.

Take care
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


2012 was the year that …
By Joel Makower
December 31, 2012
GreenBiz.com