Strategic CSR - Plastic bags

The article in the url below shows how difficult it can be to shape human behavior, particularly when the goal is to limit waste:

"Nicole Kramaritsch of Roxbury, N.J., has 46 bags just sitting in her garage. Brian Otto has 101 of them, so many that he's considering sewing them into blackout curtains for his baby's bedroom. … Lili Mannuzza in Whippany has 74."

The bags have resulted from a strict law that was passed in NJ, which banned the use of paper and plastic bags in state stores and supermarkets:

"[The law] went into effect in May [2022] and prohibits not only plastic bags but paper bags as well. The well-intentioned law seeks to cut down on waste and single-use plastics, but for many people who rely on grocery delivery and curbside pickup services their orders now come in heavy-duty reusable shopping bags — lots and lots of them, week after week."

The law is extensive and, many would argue, is exactly what is needed in an effort to reduce the amount of waste our economy generates:

"While nearly a dozen states nationwide have implemented restrictions on single-use plastic bags, New Jersey is the only one to ban paper bags because of their environmental impact. The law also bans polystyrene foam food containers and cups, and restricts restaurants from handing out plastic straws unless they're requested."

But, the unintended consequences forced delivery companies to deliver using reusable bags, which are then accumulated by those who buy a lot of take-out, as indicated by the photo accompanying the article:

 

To state the obvious:

"Compared to single-use plastics, the more durable reusable bags are better for the environment only if they are actually reused. According to [research] … a typical reusable bag, manufactured from polypropylene, must be used at least 10 times to account for the additional energy and material required to make it. For cotton totes, that number is much higher."

While such laws may well end up reducing single-use bag usage for customers who go to the store, it clearly has had a very different impact for those who order online:

"'There's clearly a hiccup on this,' said Bob Smith, a New Jersey state senator and co-sponsor of the bill, 'and we're going to solve it.' Mr. Smith said that the legislature would most likely create an exception by amending the rule to allow paper bags for online orders."

Yes, but doesn't that undermine the original intent? And, as more orders move online, the effect of the law will be further reduced. Next idea?

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

New Jersey Bag Ban's Unforeseen Consequence: Too Many Bags

By Clare Toeniskoetter

September 2, 2022

The New York Times

Late Edition – Final

A1, A11

https://www.nytimes.com/2022/09/01/climate/paper-plastic-bag-ban-new-jersey.html

 

Strategic CSR - Stigma

The article in the url below is interesting because it asks the question: "Why would anyone want to toil for a tobacco firm or a casino?" In other words, "In an age when everyone is supposed to have a purpose, why would employees who have a choice work for the baddies?" Of course, what and who constitute the 'bad guys' is a moving target, depending on the evolution of what society considers to be acceptable:

"… some sectors are stigmatised enough to be known as 'sin industries'—booze, gambling, tobacco and so on. Other industries have gone from being respectable to questionable: fossil-fuel firms, say. (A few, like cannabis firms, are travelling in the opposite direction.) Nationality now casts shadows in ways it did not before: working for a Chinese company might once have aroused admiration but now provokes suspicion."

The article suggests that the level of compensation a worker receives is part of the explanation, at least for those who rise to senior ranks:

"A paper in 2014 found that the bosses of alcohol, better and tobacco firms earned a premium that could not be explained by those companies being more complex to run, less job security or poorer governance. The size of the premium did, however, line up with periods of heightened bad publicity, such as legal settlements in the tobacco industry. The stigma that wreathed these executives was observable in other ways, too: they sat on fewer boards than bosses in more virtuous industries."

But the article counters that, although pay might be part of the explanation, on its own, it is insufficient to overcome the psychological impact of working for a stigmatized company/industry. Instead, the argument is advanced that the way these employees see what they are doing is significantly different to the way they are perceived externally:

"First, hostility itself can sometimes act as a kind of binding agent for employees of stigmatized firms. A study … found that job satisfaction increased at firms that faced disapproval, provided their employees regarded the criticism as illegitimate. Second, societies' attitudes can change, sometimes suddenly. The arms industry looks less evil now that its products are helping Ukrainians fend off Russian tanks. Dependence on Russian gas has made secure sources of energy, even if they are not low-carbon, seem more attractive."

So much so, the article argues, that employees in these industries can easily rationalize that their work is important and that they take pride in doing it in the face of external criticism – a sort of circling of the wagons and the idea that they see things that are misunderstood by others:

"Third, employees in vilified industries are often in a position to do valuable things. .. Widespread suspicion of genetically engineered crops ignores the copious evidence that they are safe and useful. And a rapid decline in the number of new petroleum engineers in America will seem less desirable if a shortfall in expertise holds back carbon-sequestration projects."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Working for the baddies

By Bartleby

August 13, 2022

The Economist

Late Edition – Final

59

https://www.economist.com/business/2022/08/11/why-employees-want-to-work-in-vilified-industries

 

Strategic CSR - Mining

I have often thought how strange it is that we occasionally get angry at consumer-facing businesses and hold them to account (inconsistently) for their supply chains, but we are less effective at targeting those B2B firms that make up those supply chains (see also Strategic CSR – Distributors). This is particularly important in extractive industries with firms that, not only can cause harm when their products are consumed (e.g., burning coal), but can also cause harm in the way that they extract those resources. The article in the url below presents an interesting case where a local community tried to do it properly – targeting the mining company (Anglo American) that was extracting copper from their land:

"Deep in a valley, at 3,500 metres in the Andes near Moquegua in southern Peru, giant terraces are being carved from the mountainside. Diggers load loose rock into 320-tonne driverless trucks which carry it to a conveyor belt. They pass by a dam built to hold back the Asana river in case it overflows the tunnel which carries it for almost eight kilometres beneath Quellaveco. This is a new $5.5bn copper mine operated by Anglo American, a London-listed multinational mining company, and part-owned by Mitsubishi of Japan."

And, the attention seems to have generated a response from the company. There is some indication that this story might not be your usual extraction industry disaster:

 

"The diggers and trucks are 'pre-mining,' stripping away surface rock to expose the copper ore below. Nearby, workers are putting the finishing touches to the plant which will extract the metal from its ore. In the next few weeks mining proper will start. It has taken more than a decade to get to this stage. With blanket Wi-Fi as well as its driverless trucks, Quellaveco is perhaps the most technologically advanced mine in Latin America. It is also a test of whether big mining has a future in a country and region in which social conflict threatens to banish extractive industries."

The article contains many examples that suggest this is a genuine attempt by the mining company to retain the support of local communities. The company had to redirect a river so that the water was not polluted, while also securing supply for local farmers:

"Other commitments came from 18 months of talks between the company, local officials and community groups. … Anglo agreed to pay for a $1bn development fund, to be spent over the 30-year life of the mine, and to fund small community projects. Perhaps its most important commitment was to hire local people, many of whom it has trained, and to give opportunities to local suppliers. Of the mine's permanent workforce of 2,500, the company says 71% are from Moquegua and 28% are women (compared with an average of 10% at mines in Peru)."

As the company transitions from construction to operation (which requires far fewer workers), the key is to retain local support. The company seems genuine in its commitment to doing so – the rationalization that is offered is consistent with a strategic CSR approach to business:

"'It's very different from ten or 30 years ago, it's not just about a mining business where you try to be efficient,' says Adolfo Heeren, Anglo American's boss in Peru. 'You have to renew your social license every day.' That costs more upfront. But if it allows continuous operations, it saves money in the long run."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

The wealth of the Andes

May 28, 2022

The Economist

Late Edition – Final

27

https://www.economist.com/the-americas/2022/05/26/a-test-of-whether-big-mining-is-socially-sustainable

 

Strategic CSR - Cobalt

The book review in the url below highlights the challenges we face in moving to an electric future. In short, there are constraints on many fronts. Not only is there ideological resistance and inertia in all aspects of the economy (including capital investments), but there are challenges simply finding and extracting the raw materials we need to effect the change we are (slowly) working towards:

"Why cobalt? Because today's smartphones, laptops, leaf blowers, toys and so much more owe their revolutionary portability to the advent of cobalt-infused lithium batteries. Up until the late 1990s, the uses for cobalt—in magnets, dyes, inks, chemical catalysts and little else—required some 20 kilotons of the mineral a year, a relatively modest figure by mining standards and one that had remained little changed over the previous three decades. Then the first lithium decade vaulted annual cobalt demand to about 60 kilotons."

Not only is it challenging to identify sufficient quantities of cobalt, but most of our known supplies are located in countries with poor labor and environmental laws:

"Three-fourths of that cobalt comes from the Congo, a market share that's more than double OPEC's claim on oil. Now comes the electric vehicle's half-ton battery, each one using thousands of smartphones' worth of minerals. Even at only 10% of global auto sales, electric vehicles have already pushed annual cobalt demand to 140 kilotons; it is expected to exceed 200 kilotons by 2026 as new battery factories come online and will explode from there when proposed EV mandates are supposed to kick in, many within the coming decade."

So, ironically, extracting the materials we need to build an electric future increases the level of environmental pollution and leads to horrendous human suffering:

"The heart of Mr. Kara's mission is to document the use of artisanal mining—that is, human digging and toting by manual, brute force rather than using trucks and backhoes. You're halfway through the book before Mr. Kara's bombshell: The artisanal share of the Congo's output, often dismissed as negligible, may exceed 30%. As the author warns: 'Do not be fooled by the word 'artisanal''—it's far from 'pleasant mining activities conducted by skilled artisans.' In place after place he visited, whether with official escorts or by surreptitious entry, what he saw was 'a hellscape of craters and tunnels, patrolled by maniacs with guns.' It was a 'lunar wasteland,' a 'devastated landscape' that 'resembled a battlefield after an aerial bombardment.'"

It is hard to even begin to imagine the hardships of those who mine this material that we need in order to feel better about the products we purchase and the lifestyle we live:

"The reader senses that the author has been left shell-shocked, not from the aesthetic carnage but from seeing thousands of people mining by hand, hammer and shovel in vast open pits hundreds of feet deep, most of the pits arrayed with hand-dug tunnels. Mr. Kara reports visiting a typical mine where 'more than three thousand women, children, and men shoveled, scraped, and scrounged … under a ferocious sun and a haze of dust.' The book has no photographs, an understandable absence given the risks of using a camera with armed guards everywhere. Instead Mr. Kara captures the impact of artisanal mining through the powerful stories of the miners—men, women and children—that he has gleaned through interviews. It's often hard to read his descriptions of the miners' daily lives, the risks, accidents, promises unfulfilled and, too often, heart-wrenching tales of maimed or dead children."

As the review of the same book (Cobalt Red) in the second url below concludes:

"How is your phone powered? Problematically. … [the author] writes, 'there is no such thing as a clean supply chain of cobalt from the Congo.' … Returning from his travels, [the author] sees Western prosperity with new eyes. 'The world back home no longer makes sense,' he writes. 'Clean air and water feels like a crime.'"

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

The Human Price of Cobalt

By Mark P. Mills

February 2, 2023

The Wall Street Journal

Late Edition – Final

A15

https://www.wsj.com/articles/cobalt-red-review-the-human-price-of-cobalt-11675293373

Assault and Batteries

By Matthieu Aikins

January 29, 2023

The New York Times Book Review

Late Edition – Final

16

https://www.nytimes.com/2023/01/23/books/review/cobalt-red-siddharth-kara.html

 

Strategic CSR - Labels

In many ways, my strategic CSR framework emerged out of an attempt to reframe the discussion around CSR, sustainability, and related 'business and society'-type labels. In that view, the "business case" for CSR/sustainability has failed, largely because companies are no longer listening. Sure, they pay enough attention to know when a fad has risen to the level where they can potentially make money from it (e.g., ESG), but they are not listening at the level that might lead to meaningful change. The article in the url below captures one reason why that might be:

"Fire-fighting foam starves the flames of oxygen. A handful of overused words have the same deadening effect on people's ability to think. These are words like 'innovation,' 'collaboration,' 'flexibility,' 'purpose' and 'sustainability.' They coat consultants' websites, blanket candidates' cvs and spray from managers' mouths. They are anodyne to the point of being useless."

In short, language matters, with inaccurate words understood as 'business jargon' that demonstrates the user's lack of knowledge or expertise, as much as anything else (a problem that has spilled over into business schools – "change management," anyone?). In the article, the author makes a compelling argument as to how to identify rhetoric that is particularly ineffective:

"The words are ubiquitous in part because they are so hard to argue against. Who really wants to be the person making the case for silos? Which executive secretly thirsts to be chief stagnation officer? Is it even possible to have purposelessness as a goal? Just as Karl Popper … made falsifiability a test of whether a theory could be described as scientific, antonymy is a good way to work out whether an idea has any value. Unless its opposite could possibly have something to recommend it, a word is too woolly to be truly helpful."

Add to this the idea that executives in a company already have their own definitions/perceptions of CSR and sustainability-related terms, so have already decided they are for/against/ambivalent, whatever. As such, the goal of strategic CSR is to instead reframe the debate in terms of "value creation" for stakeholders ("sustainable value creation"). My reasoning is that if every CEO/executive/manager gets out of bed every morning to do anything, it is to create value. While the challenge remains to understand what stakeholders want (how they define "value"), once you engage the discussion in terms of value creation, the related ideas and concepts become central to every aspect of the organization. There is nothing a business does that is not related to value creation.

Thus, while "value creation" does not strictly pass the author's test (i.e., no one wants to 'destroy value'), if you take this concept seriously within a stakeholder model focused on creating value over the medium to long term, the essential trade-offs and competing priorities mean that a firm cannot create value for all of its stakeholders, all the time.

In addition, of course, "value creation" is already widely-accepted and understood within firms. As such, it is the key to moving the discussion forward because it is doing so on the terms of those who may otherwise be hostile to the symbolism of much of the mainstream CSR/sustainability discussion.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

The wooliest words in business

May 14, 2022

The Economist

Late Edition – Final

63

https://www.economist.com/business/2022/05/14/the-woolliest-words-in-business

 

Strategic CSR - McDonald's

The headline of the article in the url below is a bit misleading, since there is a crew working behind the scenes, but the implication is clear:

"The first mostly non-human-run McDonald's is open for business just outside Fort Worth, Texas. At just one location so far, customers can drive to the golden arches and expect to be served a Big Mac or a Happy Meal by a food and beverage conveyor instead of an actual, real-life human being."

This is the 'future' for McDonald's and it doesn't take a genius to figure out why the firm is pressing for greater automation – it is a response to increasing calls for the minimum wage in fast-food restaurants to be raised, which would of course increase McDonald's costs:

This creates a conundrum for those advocating for higher minimum wages. Either the stakeholders of those firms are able to signal a willingness to pay higher prices for a personal/human touch, or firms will push for automation wherever they can introduce it. Lowering costs is just another way of becoming more efficient, which is what customers seem to say they want from firms, even though McDonald's currently pays about as low a wage as it is possible to get away with in the US:

"In Texas, the minimum wage is $7.25 an hour and hasn't increased in nearly a decade. It ranks above only Georgia and Wyoming's minimum wage of $5.15, which is $2.10 less than the US federal minimum wage. Five other states have not adopted a set minimum wage: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee. … McDonald's is one of 300 publicly held companies with the lowest median worker wages, according to a 2021 Institute for Policy Studies report."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Touchscreens, conveyor belts: McDonald's opens first largely automated location

By Erum Salam

December 23, 2022

The Guardian

https://www.theguardian.com/business/2022/dec/23/mcdonalds-automated-workers-fort-worth-texas

 

Strategic CSR - Patagonia

A quick test: Who can name the CEO of Patagonia? I couldn't and I'd be surprised if many of you can, which says something (* answer is below). This realization struck me as I was reading the interview/profile of the CEO of Patagonia in the article in the url below, which I found to be interesting but largely not very surprising. True to form, he acknowledged that Patagonia is still carbon positive, even while reminding everyone that it is closer to carbon neutral than most:

"Mr. Gellert, who arrived at Patagonia in 2014 and became its CEO in 2020, helped to create the new business plan and is now responsible for executing it. 'I'm very clear-eyed that we still take more from the planet than we restore,' he says. 'But I like to think that we are offering a model of a different way of doing business.'"

The interview got interesting, in my opinion, in the last couple of paragraphs, when Gellert started discussing the trade-offs involved in his drive to make Patagonia more sustainable. These compromises are the complicated parts of what it will take to implement meaningful change – compromises that are largely ignored in the idealistic mainstream discussions around climate change:

"Mr. Gellert concedes that it is awkward to both prize the planet and produce unnecessary consumer goods. … He has expanded the company's repair and resale services to keep more of its gear out of landfills, but he notes that pursuing sustainability in anoraks and hiking pants is often harder than it looks."

More specifically:

"Is it better to waterproof products with palm oil instead of toxic chemicals when palm oil plantations tend to compromise tropical forests? Is it helpful to recycle plastic bottles into fleece if these fibers are more likely to shed microplastic particles that can end up polluting the seas?"

This is the detail of sustainability that often gets lost, but is essential if we are ever to make substantive progress. The goal is to move away from black and white decisions framed in terms of good and bad, and delve into the shades of grey that are based around relative degrees of harm. There is nothing easy about these decisions and, done properly, the implications are endless:

"Gaming out these trade-offs is 'never-ending,' says Mr. Gellert. Sustainability, he explains, isn't simply a goal that a company can achieve and then move on to other things: 'This is the work, forever and all time.'"

* The CEO of Patagonia, since 2020, is Ryan Gellert. His predecessor was Rose Marcario.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Ryan Gellert

By Emily Bobrow

February 4-5, 2023

The Wall Street Journal

Late Edition – Final

C6

https://www.wsj.com/articles/ryan-gellert-wants-patagonia-to-be-part-of-the-environmental-solution-11675444847

 

Strategic CSR - Climate science

I think the article in the url is worth sharing because it shows how much we knew about climate change in the 1960s and 1970s. Different decisions taken at that time could have produced such different outcomes, today (both in terms of overall awareness and reduced greenhouse gas emissions in the atmosphere). Specifically, this article focuses on a memo to the president (Jimmy Carter) in 1977, warning of the link between fossil fuels and "the possibility of a catastrophic climate change":

"By July 1977 the president, Jimmy Carter, had only been in office for seven months, but he had already built a reputation for being focused on environmental issues. For one, by installing solar panels on the White House. He had also announced a national renewable energy plan. … The climate memo arrived on his desk a few days after the Independence Day celebrations on July 4. … The memo's author was Frank Press, Carter's chief science adviser and director of the Office of Science and Technology Policy. … Before working with the Carter administration, he had been director of the Seismological Laboratory at the California Institute of Technology, and had consulted for federal agencies including the Navy and NASA."

The memo was specific in its analysis of the problem; it was also prescient:

"Fossil fuel combustion has increased at an exponential rate over the last 100 years. As a result, the atmospheric concentration of CO2 is now 12 percent above the pre-industrial revolution level and may grow to 1.5 to 2.0 times that level within 60 years. Because of the 'greenhouse effect' of atmospheric CO2 the increased concentration will induce a global climatic warming of anywhere from 0.5 to 5°C. … The potential effect on the environment of a climatic fluctuation of such rapidity could be catastrophic and calls for an impact assessment of unprecedented importance and difficulty."

The article also references the amount of carbon that was being produced, and the potential danger it presented, in the mid-1960s:

"These far-sighted assertions were in line with the climate science that originated the previous decade, when the US government funded major science agencies focused on space, atmospheric and ocean science. Research produced for President Lyndon B Johnson in 1965 found that billions of tons of 'carbon dioxide is being added to the earth's atmosphere by the burning of coal, oil, and natural gas.'"

Even further back, @BartAlexander shared this front page image of The Washington Post from 1951, titled "Balmy Weather Cited as Proof World Is Becoming Warmer." To repeat, that is 1951: https://twitter.com/AdvisorBart/status/1473805576752615426/. While, clearly, none of this changes our current reality (in that we cannot change the past), you would think it would help us learn from our past mistakes and adjust our present/future actions and the urgency with which we are approaching the issue, … or not.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

The 1977 White House climate memo that should have changed the world

By Emma Pattee

June 14, 2022

The Guardian

https://www.theguardian.com/environment/2022/jun/14/1977-us-presidential-memo-predicted-climate-change