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


Monday, September 29, 2014

Strategic CSR - Life lessons

The article in the url below is a book review that begins by quoting from the 2014 commencement speech at The University of Texas at Austin by Admiral William McRaven. It is quite a speech and worth a listen:
 
 
The speech relates the Admiral's training to become a Navy SEAL and is designed to provide the "life lessons" he learned during that time to the newly graduating students. For example:
 
"… if you make your bed every morning you will have accomplished the first task of the day. It will give you a small sense of pride and it will encourage you to do another task and another and another. By the end of the day, that one task completed will have turned into many tasks completed. Making your bed will also reinforce the fact that little things in life matter. If you can't do the little things right, you will never do the big things right. And, if by chance you have a miserable day, you will come home to a bed that is made—that you made—and a made bed gives you encouragement that tomorrow will be better."
 
The analogy is a little strained, but the speech reminded me of the task we face in making our economic system more sustainable. It is easy to be cynical and I am as guilty of that as anyone. While the fallibilities of human beings constantly remind me that the odds of success are small, however, when you listen to people like Admiral McRaven it is easy to feel inspired and believe that anything is possible. I am guessing that is one of the reasons why he made it to Admiral! As he noted in his speech:
 
"In SEAL training there is a bell, a brass bell that hangs in the center of the compound for all the students to see. All you have to do to quit—is ring the bell. Ring the bell and you no longer have to wake up at 5 o'clock. Ring the bell and you no longer have to do the freezing cold swims. Ring the bell and you no longer have to do the runs, the obstacle course, the PT—and you no longer have to endure the hardships of training. All you have to do is ring the bell to get out. If you want to change the world, don't ever, ever ring the bell."
 
Perhaps more importantly, however, his speech reminded me that the task is eminently worthwhile. Rather than focusing on personal success or failure, it seems like the most important task is to advance the debate. The collective effort of doing so will define the ultimate outcome.
 
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/
 
 
Willpower and Won't Power
By Michael Shermer
September 20-21, 2014
The Wall Street Journal
Late Edition – Final
C6
 

Thursday, September 25, 2014

Strategic CSR - Conflict minerals (III)

Well, the verdict is in on the first year of conflict minerals reports that were due over the summer:
 
"Companies by June 2 had to report on their attempts to determine whether their suppliers used gold, tin, tungsten or tantalum traced to mining operations run by armed militias in Democratic Republic of Congo and the surrounding region. The effort is part of a rule under the Dodd-Frank Act of 2010 aimed at cutting off funding to violent groups."
 
And, as noted in the article in the url below, the results were resounding:
 
"Some 80% of the companies said they couldn't determine whether their supply chains contained those minerals, according to the study, by law firm Schulte Roth & Zabel."
 
How sure can firms be of their lack of certainty? What evidence do we have that the firms took the regulation seriously and performed due diligence?
 
"Only four out of 1,300 U.S.-listed companies sought external audits of their efforts to root out so-called conflict minerals in their supply chains, according to [the] study released Thursday."
 
Chalk up another success to the effectiveness of coercion (that something must be done) over persuasion (that it is in the firms' self-interest to do it).
 
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/


Conflict-mineral Audits Get Few Takers
By Emily Chasan
September 19, 2014
The Wall Street Journal
Late Edition – Final
B2
 

Wednesday, September 24, 2014

Strategic CSR - Conflict minerals (II)

The two articles in the urls below contain interesting perspectives on the Dodd-Frank requirement that firms investigate and report on the conflict mineral exposure within their supply chains. The first article comments on the consequences of this rule for U.S. firms. In particular, the article quantifies the extent of the work that is necessary for full compliance:
 
"Some 1,300 U.S.-listed companies recently filed reports on whether their suppliers used minerals from mines blamed for fueling violence in the Democratic Republic of the Congo and surrounding area. Companies screened an average of 743 suppliers each in their efforts to uncover any gold, tin, tungsten and tantalum from mines run by warlords in the Congo region. Many companies spent years and millions of dollars on their reviews, which were required by the Dodd-Frank Act. The deadline for their initial reports to the Securities and Exchange Commission was June 2."
 
While a number of companies screened only a few suppliers, at the extreme:
 
"Caterpillar Inc. said it had identified 38,700 suppliers who might potentially provide components containing conflict minerals, the highest number cited in the reports, while ABB Ltd. and General Dynamics Corp. listed more than 30,000 and more than 13,000, respectively."
 
The task of complying with the rule was clearly immense for those companies with the most potential exposure to the four "conflict minerals" (tantalite, tin, tungsten and gold). As a result:
 
"… most companies said they couldn't be certain if these metals and minerals were used by their suppliers. This month the Commerce Department also acknowledged it 'does not have the ability to distinguish' which refiners and smelters around the world are being used to fund militia groups."
 
The second article comments on the consequences of this rule for the African nations that contain the minerals used to supply the U.S. firms. In particular, as a result of the complexity involved in compliance:
 
"Many of the companies are voting with their feet, leading to a de facto boycott of mining in 10 African countries by some of the world's largest consumer-goods companies. African governments, eager to attract investment in their mineral sectors and integrate their primary products into global supply chains, now turn instead to Asian partners."
 
Ultimately, the effect of the law is limited given that:
 
"... private U.S. companies and foreign firms and their subsidiaries are not covered by the provision. Indeed, the law hands those companies a distinct competitive advantage over public companies in the U.S."
 
Perhaps worse is that U.S. firms are now paying more for the same materials—they are just having to source them from Asia, where their origin remains unclear:
 
"The perverse result is that as America's biggest competitors increasingly source these minerals in Africa, global traders and producers, especially in China and Russia, are buying the raw minerals, turning them into usable components and reselling them at a premium to the affected American companies."
 
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/


Average U.S. Firm Screened Hundreds of Suppliers for Conflict Minerals
By Emily Chasan and Maxwell Murphy
September 16, 2014
The Wall Street Journal
Late Edition – Final
B10
http://blogs.wsj.com/cfo/2014/09/16/average-u-s-firm-screened-hundreds-of-suppliers-for-conflict-minerals/

Dodd-Frank's Collateral Damage in Africa
By Rosa Whitaker
September 16, 2014
The Wall Street Journal
Late Edition – Final
A13
 

Monday, September 22, 2014

Strategic CSR - Conflict minerals (I)

As part of the Dodd-Frank Law that was passed in 2010, firms were required to report on the presence of "conflict minerals" in their supply chain. The first deadline for reports was in early June. In the aftermath of that deadline, a number of issues have become apparent. As a result, all three CSR Newsletters this week will focus on some of these issues. Today, we will start with some of the information that was unearthed by companies as they began to learn more about their supply chains, as reported in the article in the url below:
 
"As companies scrambled to meet a deadline to report whether their suppliers used minerals from mines controlled by armed groups in the Congo region, they stumbled on something even more troubling: Many of their products may contain North Korean gold. Dozens of companies disclosed over the past week that their suppliers used gold refined by North Korea's central bank. These companies include Hewlett-Packard Co., Ralph Lauren Corp., International Business Machines Corp., Rockwell Automation Corp., and Williams-Sonoma Inc."
 
The Dodd-Frank conflict minerals clause was specifically drafted to identify whether any of four materials (gold, tungsten, tantalum, or tin) that appeared in any firm's products or production processes (anywhere in the supply chain) were sourced from mines controlled by armed groups in the Congo or used to fund wars in that region. As part of the process of better understanding their supply chains, however, the companies identified the North Korean connection. The U.S., of course, currently imposes sanctions on North Korea, which prevents any U.S. company from doing business with any North Korean entity:
 
"U.S. sanctions law bars importing materials from North Korea even if they come from deep within a supply chain and are in a completely different form by the time they reach the end user, sanctions experts said. 'It's a problem even if the raw materials are coming very indirectly through suppliers,' said Alexandra Lopez-Casero, an attorney at Nixon Peabody LLP who specializes in sanctions."
 
To the companies' credit, they have declared this potential issue, even though, for many, they cannot be sure whether North Korean gold was used, or not. What this reporting process is revealing, however, is how little many firms know about their own supply chains. They are having difficulty identifying the source of many raw materials primarily because they have never bothered to find out up until now.
 
Chalk one up for regulation that has prompted firms to discover information in an area of operations about which it is in their interest to know as much as possible!
 
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/


Gold From North Korea Stymies U.S. Firms
By Joel Schectman
June 5, 2014
The Wall Street Journal
Late Edition – Final
B1
 

Friday, September 19, 2014

Strategic CSR - Financial Crisis

The accusation that the U.S. government has been reluctant to punish the instigators of the Financial Crisis is not as convincing as it once was. There is some evidence that they have been willing to attribute blame, as the article in the url below suggests. In particular, the article contains a graphic that lists the 10 largest settlements by banks with U.S. authorities. Notably, all ten settlements have been announced since February, 2012 and all but two of them are directly related to the Financial Crisis:
 
1. JPMorgan Chase:        $13 bn.
2. Bank of America:         $11.8 bn.
3. Bank of America:         $11.6 bn.
4. Bank of America:         $9.3 bn.
5. BNP Paribus:               $8.9 bn.
6. Wells Fargo:                $5.3 bn.
7. JPMorgan Chase:        $5.3 bn.
8. JPMorgan Chase:        $5.1 bn.
9. Bank of America:         $2.9 bn.
10. Credit Suisse:             $2.6 bn.
 
Now, whether the fines are big enough and whether individual executives should also have been punished, are separate questions that remain.
 
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/


Capital Punishment
July 5, 2014
The Economist
58
 

Wednesday, September 17, 2014

Strategic CSR - Executive oath

The article in the url below extends the debate about whether the manager is a professional (in the true sense of the word profession, with all its accompanying responsibilities). At the MBA level, this argument has been advanced by the MBA Oath (see: Strategic CSR – MBA Oath), but the assumption has always been that meaningful reform will take time and should be driven from the bottom up (i.e., graduating MBAs). The article in the url below, however, is more ambitious in that it targets existing (rather than future) executives. In doing so, it pushes back against the idea that managers and directors have a fiduciary responsibility to operate the firm in the sole interests of its shareholders:
 
"Lynn Stout, a Cornell Law School professor and author of The Shareholder Value Myth, notes that maximizing shareholder value isn't a legal requirement except in times of business insolvency. It's a managerial choice."
 
The article also pushes back against a growing public disillusionment with business and capitalism that is perceived to benefit those already in a position of privilege—a position that is not necessarily duly earned:
 
"CEOs with compensation packages tied to stock price and drawing salaries that are 354 times more than what the average worker earns. … 47% of the 400 chief financial officers surveyed by Ernst & Young feeling that 'they could justify potentially unethical practices to help business survive during an economic downturn.'"
 
The proposed solution is an oath of office for executives. No word on who would administer the oath and what would make it binding—perhaps that is the job of business schools over the medium- to long-term. The core of the proposed oath would include swearing to:
 
  • "Protect the interests of all stakeholders of the company: customers, employees, suppliers, regulators, communities and creditors as well as shareholders."
  • "See business in today's rapidly evolving and increasingly diverse environment as both an economic and social institution."
  • "Analyze a wide variety of quantitative and qualitative metrics, and tie executive compensation to both sets of metrics to balance economics and ethics."

The guiding principles that underpin membership of a profession are powerful. The interesting question, therefore, is: Are managers professionals? A first step in establishing them as such would require much greater standardization across business schools in terms of what constitutes the ideal content for a manager certification—i.e., an MBA.
 
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/
 
 
Should executives take an oath of office?
By Jane Perdue
March 20, 2014
SmartBlog on Leadership
 

Monday, September 15, 2014

Strategic CSR - Robots

There has been a lot of debate in the media recently about how robots are eradicating certain jobs and, in the process, causing greater inequality. The commentary I have seen tends to focus on the threat to lower-earning jobs—that they are the most expendable and easily replaceable, and that they are resulting in greater long-term unemployment among blue-collar communities. This trend is noted in the article in the url below, but with a subtle twist:
 
"A growing number of economists – including Massachusetts Institute of Technology's Erik Brynjolfsson and Andrew McAfee in a new book The Second Machine Age – argue that robots and algorithms are poised to make inroads into labour markets."
 
Mostly, this threat is evolving due to robots' ability (or the scientists and engineers that build them) to overcome the problem of "slam":
 
"… simultaneous localisation and mapping [slam], the process of mentally building up a map of a new location, including hazards, as you move through it."
 
As a result of overcoming slam, along with programs for improved language recognition, the ability of computers to replace human activities (beyond specific, repetitive functions) has increased markedly. As a result of this increased functionality, rather than threatening low-skilled jobs, the author poses a slightly more complex argument, suggesting the relationship between mechanization and employment is curvilinear. This trend was first identified about a decade ago in the UK:
 
"Alan Manning of the London School of Economics coined the term 'job polarisation' a decade ago, when he discovered that employment in the UK had been rising for people at the top and the bottom of the income scale. There was more demand for lawyers and burger flippers. It was middle-skill jobs that were disappearing. The same trend is true in the US, and is having the predictable effect on wages: strong gains at the top, some gains at the bottom, stagnation in the middle."
 
This threat is multi-pronged and is not only apparent in the West:
 
"Typists, clerks, travel agents and bank tellers find their skills less valued. Mechanisation now dominates agriculture, large-scale construction and manufacturing. We tend to imagine that manufacturing jobs have disappeared to China; in fact, manufacturing employment in China has been falling. Even the Chinese must fear the robots."
 
And, while efficiency will advance as a result, the main consequences will be social:
 
"Of course cheap, ubiquitous computing power has brought many good things – and will bring more. The question is whether we are equipped to deal with the possibility that in future, there will be people who – despite being willing and fit to work – have no economic value as employees. By the time today's 10-year-olds have their degrees, computers could be a hundred times cheaper and smarter than they are today. A future full of robot servants could be a bright future indeed, but only if we can adapt our institutions quickly enough."
 
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/


The robots are coming and will terminate your jobs
By Tim Harford
December 28-29, 2013
Financial Times
Late Edition – Final
7
or
 

Friday, September 12, 2014

Strategic CSR - HFTs

The article in the url below from The Atlantic is a great riff on cheating that, in the process, puts high-frequency traders (HFTs) in their place (sorry, I meant in the correct context):
 
"It's Wall Street at its most socially useless. HFT funds aren't allocating capital to where they think it'll be most productive. HFT funds are allocating capital to where they think other people will put it 50 milliseconds from now. It's a tax on everybody else. And it's a tax that has basically no benefit. Sure, HFT funds defend themselves by saying they're increasing liquidity, but increasing liquidity is the last refuge of bullshitters. … Economist Paul Samuelson had it right all the way back in 1957: knowing (or trading) something one second before everyone else is personally profitable and socially pointless."

As everyone now knows, thanks to Michael Lewis' book, Flash Boys, the way HFTs make money is by front-running the market:
 
"The Wall Street Journal reports that HFT funds buy early access to data from third-party distributors—everything from corporate earnings to the Philadelphia Fed's manufacturing survey. They're getting the numbers just fractions of a second early, but that's more than enough in the world of high-frequency trading. … The private sector isn't paying for the creation of a public good when it buys a sneak peek at them. The private sector is just profiting off existing public goods. If a company sold hedge funds an early look at their earnings, it'd be insider trading. But when a third-party like Business Wire sells hedge funds an early, albeit split-second, look at corporate earnings, it's perfectly legal. It's nuts."
 
Of course, the important questions is: Who are the bigger idiots—the HFTs for doing what they are doing, or us for letting them get away with it?
 
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/


High-Speed Trading Isn't About Efficiency—It's About Cheating
By Matthew O'Brien
February 8, 2014
The Atlantic

Wednesday, September 10, 2014

Strategic CSR - Outsourcing

Outsourcing is an important issue in the CSR debate. While there are some industries that favor outsourcing more than others (and other industries that are starting to see some manufacturing and other operations returning onshore); in general, the debate over whether a company should or should not outsource is an economic one. As noted in the article in the url below, however, these same economic principles appear not to apply to the U.S. government—in particular, in relation to its military spending:
 
"As a case study, military footwear is pretty startling. Boot factories in rich countries are a rarity. Indeed Wolverine Worldwide—the Michigan-based company that owns Bates [a maker of military boots and shoes], along with such civilian brands as Merrell and Hush Puppies—makes almost all its other shoes [i.e., its nonmilitary boots] abroad, where labour costs are 30-40% lower."
 
In spite of the Bates factory in Michigan making most of its shoes overseas, the part of the company that makes military footwear is a 100% U.S. operation:
 
"… every component used there is American, from leather (a Minnesota tannery provides most hides) to shoelaces, eyelets and the yarn used for linings."
 
The push to manufacture using all-American raw materials, however, is driven neither by consumer-driven patriotism nor economic efficiency, but by political interference in an industry that manages to supply non-military shoes extremely efficiently:
 
"Military footwear is governed by the Berry amendment, passed by Congress on the eve of war in 1941 to ensure that troops would be given home-grown wool and food. Today the amendment applies to most uniforms, tents, flags and processed food bought with Pentagon funds. These must be entirely American-made or -grown, unless domestic firms simply do not make the product."
 
The U.S. defense budget is an important component of overall government spending because, in spite of recent announced cuts, it is still so large:
 
"America accounts for about four of every ten dollars spent on defence worldwide."
 
As such, finding easy ways to cut the total would be advantageous, although not, it seems, at the expense of making everything domestically, whatever the consequences in terms of costs. And, needless to say, military boots are not the only military need that must be supplied domestically:
 
"The rules are far stricter than those that apply to the federal government through the Buy American Act, which smiles on goods once they are more than half American. They are also amazingly complicated. One clause specifies that fish nuggets served to troops must contain only fish caught in American waters or by an American-flagged ship, but may use foreign breadcrumbs."
 
I am sure foreign breadcrumb makers are heaving a sigh of relief at that major concession!
 
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/


Boots on the ground
March 1, 2014
The Economist
Late Edition – Final
31
 

Monday, September 8, 2014

Strategic CSR - Natural Gas

As ever, unintended consequences serve to undermine even the best of intentions. The article in the url below indicates how efforts to reduce carbon emissions can actually end up increasing them (see: Strategic CSR – The Jevons Paradox). In particular, it focuses on efforts to convert various transportation vehicles (e.g., buses and trucks) from diesel to natural gas:
 
"Although burning natural gas as a transportation fuel produces 30 percent less planet-warming carbon dioxide emissions than burning diesel, the drilling and production of natural gas can lead to leaks of methane, a greenhouse gas 30 times more potent than carbon dioxide."
 
The research, which was conducted by researchers at Stanford, MIT, and the Department of Energy, concluded that the increase in methane emissions offset the savings that resulted from the fuel switch:
 
"Those methane leaks negate the climate change benefits of using natural gas as a transportation fuel. … The study concludes that there is already about 50 percent more methane in the atmosphere than previously estimated by the Environmental Protection Agency, a signal that more methane is leaking from the natural gas production chain than previously thought."
 
While switching from diesel to natural gas is a wash, however, the difference in emission levels is sufficiently large to make a switch from coal-fired power stations to natural gas-fired power stations worthwhile:
 
"Natural gas emits just half the carbon pollution of coal, and even factoring in the increased pollution from methane leaks, natural gas-fired plants lead to less emissions than coal over 100 years, the study found."
 
As usual, there is a solution that relies on an empowered stakeholder taking action. The methane, which leaks from "drilling wellheads, valves and pipelines," can be blocked if oil and gas companies are made to invest in existing technology that can prevent such leaks:
 
"The regulations would require that oil and gas companies install equipment at wellheads to capture the leaks, use valves in production facilities that do not allow methane to escape and have regular inspections."
 
Why energy companies are not being more progressive on this issue is puzzling, however, since they clearly have an economic incentive to minimize threats to the industry:
 
"The oil and gas industry has consistently resisted new regulations. Natural gas developers say that it is in their interest to capture methane since it is a component of natural gas and can be sold as such. Allowing it to escape causes them to lose money."
 
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/
 
 
Study Finds Methane Leaks Negate Benefits of Natural Gas as a Fuel for Vehicles
By Coral Davenport
February 14, 2014
The New York Times
Late Edition – Final
A12
 

Friday, September 5, 2014

Strategic CSR - Sustainability Reports

The article in the url below demonstrates one way that firms are responding to external pressures for CSR—sustainability reports:
 
"More companies in the S&P 500 index are touting their efforts to curtail greenhouse-gas emissions, reduce waste and improve their performance on other nonfinancial fronts. Last year, a record 72% of companies in the index filed sustainability reports, according to Governance & Accountability Institute Inc. That's up significantly from 53% in 2012 and 20% in 2011."
 
While, on the surface, this is encouraging; in reality, these documents reveal the limits of the ad hoc approach that has existed to date:
 
"The details disclosed by each company are selective, and often vary significantly among industry peers. Some companies use third-party benchmarks, while others only occasionally include hard numbers."
 
Until we are able to compare firms across industries, using common standards that measure what we think is important (rather than what firms are willing to tell us), these reports will remain selective and of limited value. While the title of the article heralds the fact that sustainability reports are gaining traction, the more important point is whether they are helping us understand which firms are meeting the needs and expectations of their broad range of stakeholders. In spite of the article's upbeat framing, that is much less clear.
 
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/


Sustainability Reports Gain Traction
By Emily Chasan
June 10, 2014
The Wall Street Journal
Late Edition – Final
B8
 

Wednesday, September 3, 2014

Strategic CSR - Privacy

The debate around spying in the U.S. that has been generated by Edward Snowden has touched on many issues, such as the limits and oversight of government agencies. While important, the article in the url below argues that a more important debate about what this affair says about contemporary capitalism has been largely overlooked:

"… it is not just the NSA that is broken … too many governments, strapped for cash and low on infrastructural imagination, have surrendered their communications networks to technology companies a tad too soon."
 
In particular, while the abuses by the U.S. spy agencies are condemned, the author highlights what he terms:
 
"… the much more disturbing trend whereby our personal information – rather than money – becomes the chief way in which we pay for services – and soon, perhaps, everyday objects – that we use?"
 
In contrast to the general ignorance of the public about the listening and data gathering activities of the government, the author argues that we are willing accomplices when it comes to surrendering our private information (and, therefore, our privacy) to for-profit firms:
 
"No laws and tools will protect citizens who, inspired by the empowerment fairy tales of Silicon Valley, are rushing to become data entrepreneurs, always on the lookout for new, quicker, more profitable ways to monetise their own data – be it information about their shopping or copies of their genome. These citizens want tools for disclosing their data, not guarding it. Now that every piece of data, no matter how trivial, is also an asset in disguise, they just need to find the right buyer. Or the buyer might find them, offering to create a convenient service paid for by their data – which seems to be Google's model with Gmail, its email service."
 
In being willing to surrender our data, we are blind to the long-term consequences for capitalism and democracy of this new form of payment (substituting money for private data, which is then monetized by firms):
 
"The benefits to consumers are already obvious; the potential costs to citizens are not. As markets in personal information proliferate, so do the externalities – with democracy the main victim."
 
While new laws might quieten the debate in the short-term, the author presents a compelling case that we are missing the bigger picture that communication technologies are re-structuring our society:
 
"Unfortunately, these issues are not on today's agenda, in part because many of us have bought into the simplistic narrative – convenient to both Washington and Silicon Valley – that we just need more laws, more tools, more transparency. What Mr Snowden has revealed is the new tension at the very foundations of modern-day capitalism and democratic life. A bit more imagination is needed to resolve it."
 
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/


The Snowden saga heralds a radical shift in capitalism
By Evgeny Morozov
December 27, 2013
Financial Times
Late Edition – Final
9
or
 

Monday, September 1, 2014

Strategic CSR - Climate change

The trouble with climate change is that we cannot agree what to do about it. One of the reasons for this is because there is a large chunk of the population that is apathetic about the approaching apocalypse. As the book review in the url below notes, a mixture of apathy and the scale of the problem leads to a lack of meaningful action:
 
"The changes occurring in Earth's climate appear to present an unfair fight, between the majestic forces of Nature and we minuscule humans, scurrying to protect ourselves. … Once you have contemplated the mind-boggling variety of bets that nations, businesses and politicians are placing based on predicted global temperatures, the choice of which gas-hybrid SUV to buy will seem trivial."
 
Worse than apathy, however, is that there are many people who stand to benefit from a deteriorating environment:
 
"Bad news for flood-stricken Bangladeshis, it turns out, is good news for Greenland's separatists, hoping to break free of Denmark and profit from an Arctic mineral boom. Russians are taking their lead from President Vladimir Putin, who has observed that the warming of his country means 'we shall save on fur coats.' Melting sea ice and permafrost would expand Russia's agricultural land, improve its fishing stocks and make it easier to extract minerals from Siberia. A Chinese company has signed a lease to farm 5% of Ukraine, some 7.5 million acres, to grow food for its home market."
 
The money-making schemes are varied, but all have a common theme—this is happening, so we might as well make money from it:
 
"Who knew that Israelis were the masters of artificial snow-making? It turns out to be a lucrative byproduct of their experience desalinating seawater to irrigate Israeli farms. Now their machines pump snow all over the Alps and will be in action at Sochi for the Winter Olympics. In Holland, engineers are rubbing their hands at the prospect of bringing a version of the dam system that protects Rotterdam to post-Sandy New York. And in Seattle, an ex-Microsoft scientist is scheming to pump sulfur into the stratosphere to shield polar ice from the sun."
 
And, of course, those best positioned to profit from climate change are the same actors who got us into this mess (i.e., us):
 
"It turns out that climate change is rather like the financial crisis. Those who may have caused it with their emissions are likely to profit most from it, and the gulf between the world's rich, who can protect themselves from its worst effects, and the poor, who cannot, will only widen. It is an ugly truth, but one well worth recognizing as we ponder what do if Maine turns into Tuscany and the Marshall Islands vanish beneath the sea."
 
Happy Labor Day!
David
 
David Chandler & Bill Werther
 
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Of Seers and Profiteers
By Philip Delves Broughton
January 29, 2014
The Wall Street Journal
Late Edition – Final
A15