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.

Thursday, March 28, 2024

Strategic CSR - Slow(er) fashion?

The article in the url below suggests the message that fast fashion is increasingly a hard sell for some consumers (due to the huge amount of associated waste) is beginning to make progress:

"Fast-fashion retailers including H&M, Uniqlo and Zara have for years enticed shoppers to buy more and more new clothes. Now these brands are pushing consumers to repair their old ones, too."

More specifically:

"Zara this year is launching nationwide repair services in several of its largest markets, Uniqlo is adding repair studios to a number of stores, and H&M-owned Cos is working with a startup to help customers fix damaged dresses and jackets."

Of course, if the material is lower quality (which is a big part of fast fashion's low cost business model), it might not be repairable. I thought the whole point of Zara was that it made clothes you could wear five times and then discard (see Strategic CSR – Fast fashion):

"While some high-end brands have long offered to fix pricier products, the large-scale rollout of repair services is a new venture for mainstream fashion retailers whose clothes are typically much cheaper. The trend could also threaten to cannibalize sales of new products."

Somehow, I think it will be the other way around and customers will ignore the repair option. Given that the price of labor drives repair costs, it is probably going to be cheaper to buy replacements than it will be to repair items that might not last much longer, anyway:

"In the U.K., Zara takes in garments for repair and handles payments, but uses a network of third-party repairers to do the work. Mending a hole, for example, costs £10, equivalent to roughly $13."

I would think you could buy half of the items in a typical fast fashion store for that price – certainly among companies such as Shein and Boohoo (see Strategic CSR – Shein + Boohoo).

Take care
David

David Chandler
© 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/


H&M, Zara and Fast-Fashion Peers Are Pushing Into Repair Services
By Trefor Moss
August 2, 2023
The Wall Street Journal
Late Edition – Final
B1-2
 
Posted by David Chandler at 6:50 AM

Tuesday, March 26, 2024

Strategic CSR - Statistics

Lies, damn lies, and statistics. The two charts below were on the front page of the business section of The NYT, recently, and can be used to tell contrasting stories about the successful adoption of EV cars.

The first chart would likely be used to demonstrate how EVs (and hybrids) are diffusing rapidly, and are being embraced by a public eager to tackle climate change:
 

The second chart, on the other hand, which plots those adoptions relative to the total number of cars (most of which, of course, are still ICEs), could be used to tell a very different story:
 

Take care
David

David Chandler
© 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/


Rapid Rise, With Reservations
By Nadja Popovich
March 13, 2024
The New York Times
Late Edition – Final
B1
 
Posted by David Chandler at 5:17 PM

Thursday, March 21, 2024

Strategic CSR - Bank of America

The article in the url below contains a headline that I don't see very often:

"Bank of America Pledged to Stop Financing Coal. Now It's Backtracking."

What strikes me about it that is different is not that companies are not taking climate change seriously or that they are saying one thing and then doing the opposite (both of which have always been true), but that they feel comfortable saying so, so directly. In other words, backtracking like this is exposed by the media, all the time, but it is rare to see the company announce its own backtrack:

"Two years ago, Bank of America won kudos from climate activists for saying it would no longer finance new coal mines, coal-burning power plants or Arctic drilling projects because of the toll they take on the environment. The bank's latest environment and social-risk policy reneged on those commitments. The policy, updated in December, says that such projects will instead be subject to 'enhanced due diligence.'"

I know there has been a backlash against the label "ESG" (correct impulse, but orchestrated for all the wrong reasons; see Strategic CSR – ESG and Strategic CSR – Green-hushing), but that is different from backtracking on a commitment not to fund fossil fuel projects. The reasoning, according to the article, is the same as the pushback against ESG, in general – I just would have thought Bank of America could have made a meaningful distinction among its stakeholders (and those it perceives to be most important):

"Bank of America's change follows intensifying backlash from Republican lawmakers against corporations that consider environmental and social factors in their operations. Wall Street in particular has come under fire for what some Republicans have called 'woke capitalism,' a campaign that has pulled banks into the wider culture wars."

While the backlash against ESG and related initiatives is a general phenomenon (at least, here in the U.S.), it seems particularly virulent in the finance industry, whether targeted against investment funds or the banks that finance large infrastructure projects:

"States including Texas and West Virginia have passed financial regulations designed to ward off efforts to deny fossil-fuel companies access to banking services. In New Hampshire, state lawmakers have sought to criminalize the business principle known as E.S.G., shorthand for environmental, social and governance."

The shift by Bank of America, in particular, is quite dramatic:

"Bank of America said in a statement that clients or transactions 'that carry heightened risks will continue to go through an enhanced due diligence process involving senior level risk review.' In late 2021, the bank's policy stated that it 'will not directly finance new thermal coal mines or the expansion of existing mines' or 'petroleum exploration or production activities in the Arctic.' It also would not 'directly finance the construction or expansion of new coal-fired power plants, including refinancing recently constructed plants' unless those facilities employed carbon capture or similar technology. That language is gone from its updated policy."

But, there are other signs that a similar shift is occurring industry-wide:

"There have been other contentious changes. In November, JPMorgan Chase said in its annual climate report that it was overhauling the oil and gas emissions-reduction target that had guided its energy investing and was adopting a new 'energy mix' target that took into account financing for clean energy projects. … In a statement, JPMorgan said at the time that its modified target recognized that 'a singular focus on fossil fuels will not successfully achieve the necessary transition of the global energy system.'"

For examples of more banks reneging on their climate commitments, see the article in the second url, below:

"Many of the world's biggest financial firms spent the past several years burnishing their environmental images by pledging to use their financial muscle to fight climate change. Now, Wall Street has flip-flopped. In recent days, giants of the financial world including JPMorgan, State Street and Pimco all pulled out of a group called Climate Action 100+, an international coalition of money managers that was pushing big companies to address climate issues."

Take care
David

David Chandler
© 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/


Bank of America Reverses Pledge Against Fossil Fuels
By Hiroko Tabuchi
February 4, 2024
The New York Times
Late Edition – Final
p19

More Wall Street Firms Flip-Flop on Climate Pledges
By David Gelles
February 20, 2024
The New York Times
Late Edition – Final
B2
 
Posted by David Chandler at 7:00 PM

Tuesday, March 19, 2024

Strategic CSR – Solar

This graph from the article in the url below, for me, sums up the challenge inherent in many renewable energies:


The chart shows a single day (October 11, 2020) and plots demand for electricity in South Australia against the amount of electricity generated by solar power. Of course, this issue would not matter so much if we could adequately store solar energy and transport it over long distances. Since we haven't solved those challenges, we need to use solar energy as we create it, but that might not be when it is in most demand, as the chart demonstrates.

No doubt, the challenge of replacing fossil fuels is complicated, and involves a multi-pronged approach with multiple different energy sources (including nuclear, of course; see Strategic CSR – Nuclear). Nevertheless, I found this chart to be a powerful reminder of how complex the challenge is, and also how far we are from solving it.

Take care
David

David Chandler
© 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/


One Last Postcard From the Future of Clean Energy
By Nathaniel Bullard
December 21, 2023
Bloomberg Green
 
Posted by David Chandler at 5:12 AM

Thursday, March 14, 2024

Strategic CSR - COP 28

I thought Bloomberg's summary of the agreement reached at COP 28, last December, was telling. First, the good news (with an essential qualification, right at the end, my emphasis):

"The latest UN climate summit ended with an announcement that nations have committed to transitioning away from all fossil fuels. … The deal calls for countries to quickly shift energy systems away from fossil fuels in a just and orderly fashion, albeit in a non-binding deal."

Then, quickly followed by the reality check:

"The history of adherence to such pledges is spotty at best. After a pledge to phase down coal in Glasgow, Scotland, two years ago, consumption has continued to rise and the world remains very unlikely to limit warming to the Paris Agreement's target of 1.5C."

Equally revealingly, the article in the second url below reports Bloomberg's overall score for the final (nonbinding) agreement in terms of "10 key areas" that optimists ahead of the conference were using to evaluate progress and secure gains made in previous conferences:

"Overall, COP28 scored a 3.8 out of 10. That was … 0.1 points higher than the score for last year's COP27 in Sharm el-Sheikh, Egypt, but 2.2 points below the score for COP26 in Glasgow in 2021."

The chart accompanying the article shows how dire COP 28's final agreement was in light of what is required (and was hoped for):
 

Oh well, I suppose there is always next year (as no-one I know has said).

Take care
David

David Chandler
© 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/


COP28 Nations Reach First-Ever Deal to Move Away From Fossil Fuels
By John Ainger, Jess Shankleman, and Jennifer A Dlouhy
December 13, 2023
Bloomberg

COP28's Success Marks Just a Tiny Upgrade on COP27 Results
By Olivia Rudgard and Kira Bindrim
December 13, 2023
Bloomberg
 
Posted by David Chandler at 1:21 PM

Tuesday, March 12, 2024

Strategic CSR - Coal

With the newsletters, I am going to start mixing up the level of insight I provide, with some longer in-depth commentaries (as usual), and some shorter, harder-hitting points, like this quote that I read in the article in the url below about the inertial trajectory of coal consumption:

"While coal remains the world's biggest source of electricity, the increase in renewables installations is outpacing rising demand for power. Moving away from coal will be a critical part of the global fight to reduce carbon emissions."

To be clear, this is the point I wanted to highlight:

"… coal remains the world's biggest source of electricity."

I find it amazing that this statement remains true. Given how, collectively, we have known about climate change as a threat for 50+ years, yet we have in essence sat on our hands (see Strategic CSR – Carl Sagan). Obviously, there is great variance but, collectively, we have effectively done nothing since the 1970s, with carbon emissions continuing to rise (see Strategic CSR – 2022 (+ 2023)).

Take care
David

David Chandler
© 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/


Coal Financing Is Still Booming—Led by China
By Tim Quinson
December 20, 2023
Bloomberg Green
 
Posted by David Chandler at 8:05 AM

Thursday, March 7, 2024

Strategic CSR - EVs

Following on from Tuesday's newsletter, the data in the article in the url below represent an additional challenge to the wider adoption of EVs:

"Americans are keeping their cars longer than ever. The average age of a passenger vehicle on the road hit a record 12.5 years [in 2023], according to data gathered by S&P Global Mobility. Sedans like Holdsworth's are even older, on average – 13.6 years."

Why is this happening?

"Blame it mainly on the pandemic, which in 2020 triggered a global shortage of automotive computer chips, the vital component that runs everything from radios to gas pedals to transmissions. The shortage drastically slowed global assembly lines, making new vehicles scarce on dealer lots just when consumers were increasingly eager to buy."

The constrained supply, of course, also contributed to inflation, which is another factor:

"Since the pandemic struck three years ago, the average new vehicle has rocketed 24% to nearly $48,000 as of April, according to Edmunds.com. Typical loan rates on new-car purchases have ballooned to 7%, a consequence of the Federal Reserve's aggressive streak of interest rate hikes to fight inflation."

The result?

"It's all pushed the national average monthly auto loan payment to $729 – prohibitively high for many. Experts say a family earning the median U.S. household income can no longer afford the average new car payment and still cover such necessities as housing, food and utilities."

And, this is not just affecting sales of new cars:

"Used vehicle prices, on average, have surged even more since the pandemic hit – up 40%, to nearly $29,000. With an average loan rate having reached 11%, the typical monthly used-vehicle payment is now $563. Faced with deciding between making a jumbo payment and keeping their existing vehicles, more owners are choosing to stick with what they have, even if it means spending more on repairs and maintenance."

In order for EVs to be widely adopted, old cars need to be removed and, in order for this to make sense for the environment, the net effect needs to be carbon positive (i.e., replaced with EVs or hybrids). As with everything to do with climate change, it seems, we are doing too little, too late. Of course, the macro economic factors are not working in the planet's favor, but that has always been true. In order to divert from the pathway we are on, an intervention is required (and some leadership would be nice) – and most economists agree that the best intervention would be a revenue neutral carbon tax (see Strategic CSR – Carbon tax).

Take care
David

David Chandler
© 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/


Repelled by high car prices, Americans are holding on to their vehicles longer than ever
By Tom Krisher
May 15, 2023
Associated Press
 
Posted by David Chandler at 8:24 AM

Tuesday, March 5, 2024

Strategic CSR - Electricity

The article in the first url below argues that, for all the talk about the shift to electrification, and the focus on producing electrical versions of goods already in existence (e.g., EVs; see Strategic CSR – EVs), we are not nearly as prepared as we think to transition:

"It makes sense: Electrification is often the fastest and cheapest way to decarbonize our energy consumption. The technologies to decarbonize electricity already exist and are, for the most part, readily deployable at a large scale by the private sector. But here's a sobering fact about all the talk of the 'electrification of everything': It isn't likely to happen. At least, not soon. We can't go all the way down the electrification road for a host of reasons—nor should we want to. For one thing, it would place unnecessary limitations on other viable solutions to rising greenhouse-gas emissions. It also ignores existing technical, regulatory and strategic constraints on electrification."

More specifically, the author presents what she argues are the five major barriers to the electrification of everything:

1. Some things can't be electrified

2. Cheaper alternatives may be coming for the most difficult-to-electrify areas

3. Access to land, a surfeit of complaints

4. Difficulty getting the necessary permits

5. Electricity grids are highly interruptible 


I am not sure these are the only five, or even the most important five (I read a while ago that, if all the cars currently in California became EVs overnight, the electrical system would need to produce 50 percent more electricity than its current capacity – and this is a utility that already has trouble keeping the lights on), but they do convey the complexity of electrification. Perhaps most important, they highlight the extent to which these challenges are not part of the current conversation (and policy making) around electrification, which is proceeding based on false or misleading assumptions. Developing an EV does not mean that every car can be an EV – in short, there are very few easy answers out there.


For a related argument (favoring hybrid cars over EVs), see the article in the second url below.


Take care

David


David Chandler
© 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 Five Things Keeping Us From Going All-Electric
By Amy Myers Jaffe
July 24, 2023
The Wall Street Journal
Late Edition – Final
R1, R4-5

We May Not Be Ready for an All-E.V. World
By Peter Coy
July 17, 2023
The New York Times
Late Edition – Final
A19
 
Posted by David Chandler at 7:39 AM
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