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, December 11, 2013

Strategic CSR - Earth

 
 
This will be the last CSR Newsletter of the Fall semester.
Have a great holiday season and I will see you in 2014!
 
 
Some stark quotes from a review of the book Countdown: Our Last, Best Hope for a Future on Earth? that appeared recently in The New York Times Book Review:
 
“If we wanted to bring about the extinction of the human race as quickly as possible, how might we proceed? … the most effective measure, counterintuitive as it may be, would be to increase our numbers. … The more people, the greater the likelihood of ecological collapse, nuclear war, plague.”
 
“Some seven billion people are alive today; the United Nations estimates that by the end of the century we could number as many as 15.8 billion. Biologists have calculated that an ideal population — the number at which everyone could live at a first-world level of consumption, without ruining the planet irretrievably — would be 1.5 billion.”
 
“[The author’s] dire warnings, and the warnings of the scientists and government officials he interviews, are unrelenting, with variations of the following sentence appearing at regular intervals: ‘In the entire history of biology, every species that outgrows its resource base suffers a population crash — a crash sometimes fatal to the entire species.’”
 
“From Thomas Malthus to Paul and Anne Ehrlich, authors of The Population Bomb (1968), population doomsayers have endured ridicule and vilification, largely because their predictions of imminent doom fail to materialize on schedule. In our own time, there are a few mitigating indicators. Much of the current population growth comes in the developing world, where carbon consumption remains low, so the environmental effect is relatively muted. The next thousand Americans will do more than twice as much damage as the next hundred thousand Nigeriens.”
 
“The grim prophecies are illustrated with statistics. Each year the world adds the equivalent of another Germany or Egypt; by 2040, China will have more than 100 million 80-year-olds. We add another million people every four and a half days.”
 
Thoughts worth pondering as we enter the most materialistic (sorry, I meant ‘festive’) time of the year!
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Earth Control
By Nathaniel Rich
October 13, 2013
The New York Times Book Review
Late Edition – Final
18
 

Monday, December 9, 2013

Strategic CSR - Twitter

While it has been apparent for some time now that the free flow of information was shifting the balance of power away from corporations and into the hands of their most active stakeholders (Chapter 4, The Free Flow of Information, p161), the article in the url below demonstrates how far firms have to go in order to regain the initiative:
 
“News of a business crisis spreads internationally within an hour in more than a quarter of cases, and in more than two-thirds of cases it has reached an average of 11 countries within 24 hours, yet it takes businesses on average fully 21 hours to start getting their own version of the story out.”
 
The report on which this article was based was written after interviewing “100 senior PR professionals”—a reasonable source for information about the PR/reputation/crisis management industry. And, for those firms out there who do not yet understand this (see: Strategic CSR – British Airways):
 
“Social media are important channels for airing dirty laundry, albeit more so locally than internationally. In half the cases, social media had ‘a significant impact’ on how the news spread locally, but in somewhat under a third of the cases internationally, the report said.”
 
What is worse is that, if a firm starts behind the curve on a breaking story, the damage can be significant:
 
“Not only do social media help spread the word initially, they also help keep the spotlight on the story. … Freshfields found that ‘inability to control reputational crises in the early stages can prove costly for a business, affecting its value, revenue and long-term reputation.’ In about six out of 10 cases, the impact disrupted operations. In just over half the cases, revenue suffered. Over a quarter of cases–27%–resulted in a stock price drop. ‘Only one in 10 companies (11%) suffered no impact or were adequately prepared to deal with the issue,’ the survey found.”
 
What is most interesting about the report, however, is that it has begun to tease apart different moderating effects for the role that social media plays in enhancing the reputational damage associated with crises:
 
“Freshfields identified four kinds [of crises]: operational, such as a product recall or environmental problem; behavioural, involving dubious conduct by the company or its employees; corporate, such as a liquidity problem or litigation; or informational, i.e. IT or data security problems. Operational crises had the most serious revenue impact, while behavioral crises were the fastest to move through social media. In fact, social media moved news of bad behavior at twice the speed of operational crises, with 40% of behavioral bad news spreading within an hour through social media, the report said, twice the rate of operational crises.”
 
While the report identifies various reasons for firms’ slow responses (e.g., the need to get sign-off by lawyers and senior executives), the underlying message is that firms are not preparing ahead of time to minimize the potential damage when the crisis occurs. The overall goal? To avoid “trial by Twitter.
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Business Caught Flat-footed in Trial by Twitter
By Gregory J. Millman
November 4, 2013
The Wall Street Journal
 

Friday, December 6, 2013

Strategic CSR - Walmart

Walmart is a phenomenon that CSR advocates need to take seriously because it is so huge. When Walmart does something, it immediately and irrevocably alters whatever market it is affecting. As reported in the article in the url below, this effect is no more apparent than in its experiments with solar energy:
 
“In the race for commercial solar power, Wal-Mart is killing it. The company now has almost twice as much capacity as second-place Costco. A better comparison: Wal-Mart is converting more sun into energy than 38 U.S. states [see: https://openpv.nrel.gov/rankings].”
 
Whatever Walmart decides to do (good or bad) is big news. This applies equally to its attempts to reduce packaging in its supply chain (Chapter 3: The Walmart Paradox, p102) as it is for beer:
 
“Wal-Mart recently decided alcohol was good business and vowed to double sales by 2016. The result: 500 reps from the alcohol industry converged on the Sam’s Club auditorium in Bentonville, Arkansas, for an ‘adult beverages summit’ focused on Wal-Mart.”
 
In similar ways, Walmart’s effect on the market for solar power is dramatic:
 
“After a 40 percent surge in installations through the second quarter, Wal-Mart now draws on 89 megawatts of capacity, according to a report last week by the Solar Energy Industries Association. That’s roughly enough to power 22,250 U.S. homes.”
 
This graphic, which accompanies the article, displays the disparity among Walmart and its nearest solar power competitors:
 
 
Have a good weekend
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Wal-Mart Now Draws More Solar Power Than 38 U.S. States
By Tom Randall
October 25, 2013
Bloomberg
 

Wednesday, December 4, 2013

Strategic CSR - e-waste

The CSR community often applies screens to filter for CSR behavior at the level of the industry. In other words, tobacco is a bad industry, along with alcohol and weapons. In reality, however, there is considerable variance within industries, but data that allows like-for-like comparison is hard to get. The article in the url below provides some insight in this respect by looking at how e-waste (Chapter 8, Case study: e-waste, p544) is being handled in the cellphone industry. To be sure, no company is excelling and the industry as a whole has much work to do:
 
“All the major carriers say they are working hard to get consumers to bring mobile devices back into stores for reuse or recycling. But the hard numbers – overall – remain low. The Environmental Protection Agency estimates that only 11% of smartphones and tablets are being recycled. Electronic waste has become a major environmental issue, with mercury and other heavy metals from devices crowding landfills across the US.”
 
Nevertheless, the results generated by the article’s comparison among the performance of the industry’s biggest players are surprising:
 
“When it comes to e-waste, though, not all US carriers are equal. I asked the top US carriers – Verizon, AT&T, Sprint and T-Mobile – how many phones they recycled in 2012 so I could compare those figures with the number of phones sold in the same year. Among the major carriers, Sprint is way ahead of the pack. Its recycled or reused smartphones equate to 44% of its sales in 2012, compared to only 11.5% for AT&T. For Verizon, which divulged numbers incorporating all devices instead of just smartphones, its recycling and reuse rate came to 28%. T-Mobile doesn't list its figures and didn't respond to the Guardian's request for a similar percentage.”
 
The article is not clear about what is driving the differences (trade-in rates do not explain it, for example). What is clear, however, is that Sprint is doing something right on an issue that is becoming increasingly important for this industry:
 
“Since 2001, Sprint has diverted more than 53m mobile devices from landfills and it offers up to $300 in-store credit for old devices, including those from other carriers. In 2012, Sprint paid out $100 million in-store credit to customers.”
 
What is also clear, is that this makes a lot of business sense to Sprint:
 
“Sprint has made it clear that its buyback program isn't just about doing good; the program also has boosted the bottom line. Last year, the company avoided $1bn in costs with its phone trade-in program. Nine out of 10 used products brought into its stores get reused or remanufactured. … The company has set a goal of collecting 90% of the devices it sells by 2017.”
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Sprint wins on e-waste: Why do AT&T and Verizon fall short?
By Jennifer Inez Ward
November 5, 2013
The Guardian
 

Monday, December 2, 2013

Strategic CSR - Human Life

What is the price of a human life? That is a question that actuaries at insurance companies spend a lot of time quantifying. Clearly, however, the answer to the question is relative, rather than absolute. All human lives are not valued equally. Factors such as education, profession, and future projected earnings provide the foundation for the differences. Another variable that is relevant, it seems, is the nationality of the individual. If you are Bangladeshi, for example, and more specifically a Bangladeshi who works in a garment factory, your life is apparently not worth very much:
 
“A dozen global retailers began two days of meetings in Geneva on Wednesday to negotiate a $77 million compensation package for the victims of two Bangladesh garment factory accidents, as labor unions pressed the companies for payments that would acknowledge their responsibility for the country's worst facilities. …To get to the grand total, labor unions and workers' rights groups applied a formula that has been used in previous Bangladesh factory accidents, awarding 25 years of salary plus various bonuses to the families of the deceased victims.”
 
Although that may sound reasonable on paper, “25 years of salary” does not add up to much if your salary is not very high to begin with. As such, the bottom line is less impressive:
 
“Families could receive about $33,000 for each victim, according to calculations.”
 
Of course, one of the underlying issues that needs to be determined in such compensation packages is responsibility and, therefore, legal liability:
 
“Some companies are reluctant to make payments to victims of those accidents that could acknowledge their responsibility—and open themselves to lawsuits—for events they believe they couldn't control. Some labor groups counter that apparel companies are broadly responsible even if they weren't producing in the factories at the time of the disasters.”
 
More details of the proposed settlement—how it is calculated and apportioned among factory owners, trade unions, the government, and the western retailers/brands that were producing in the country at the time—are contained in the graphic that accompanies the story:
 
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 

Retailers Debate Reparations for Deaths

By Christina Passariello and Shelly Banjo
September 12, 2013
The Wall Street Journal
Late Edition – Final
A12