Strategic CSR - Cows

Welcome back to the Strategic CSR Newsletter! The first newsletter of the Spring semester is below. As always, your comments and ideas are welcome.

This statistic blew my mind when I read it in the article in the url below:

"The average dairy cow in America produces 30 litres of milk a day; a cow in Africa, only 1.6."

Such a disparity speaks volumes, in my mind, of the power of the market to deliver societal progress. As the article continues:

"This 19-fold difference—call it the dairy divide—has enormous consequences. Closing even some of it would ease poverty, help children grow up better nourished, reduce emissions of greenhouse gases and perhaps even make civil wars less likely."

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  

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

Bridging the dairy divide

December 14, 2024

The Economist

Late Edition – Final

50

https://www.economist.com/international/2024/12/12/what-has-four-stomachs-and-could-change-the-world

 

Strategic CSR - Trees

The other day, I was looking through some old newspaper cuttings and ran across a quote in the Financial Times that was attributed to "an African proverb," which I thought you would all enjoy:

"The best time to plant a tree is 20 years ago. The second-best time is now."

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/

 

Strategic CSR - Diamonds

The article in the url below suggests that the producers of lab-grown diamonds are overcoming one of the main criticisms levelled at their products – that they consume large amounts of energy to manufacturer, so are not nearly as green as they are marketed:

"A decade ago, they were relatively unknown in the jewelry industry, but now make up a fifth of diamond sales by value. … Made largely in China and India, lab-grown diamonds are produced using heat and pressure but without any mining. The lab-growing process, however, does require huge amounts of energy, so stones' green credentials depend on where the power comes from."

Having solved the issue of having to dig these things out of the ground (often under appalling conditions), the next step was to remove the emissions associated with the vast amounts of energy required to produce lab-grown diamonds:

"Danish jeweler Pandora's diamonds are made using renewable energy and set in recycled gold and silver rings. It said a cut and polished one carat diamond has a carbon footprint of roughly 9.2 kilograms, less than a tenth of the carbon emissions for a natural diamond—106.9kg CO2 based on research from the Natural Diamond Council."

Similarly:

"In 2019, Laura Lambert launched Fenton, an ethical jewelry brand based in London. Three years later the former retail executive started selling lab-grown diamonds produced in a solar-powered factory in Gujarat, India. … She says her own market research indicates currently only about 5% of all lab-grown diamonds are made using renewable energy, but it has been something her customers have been asking for."

As a result of the growing market share of lab-grown diamonds:

"Miners' revenues have dropped sharply. De Beers, the world's largest diamond miner, sells its rough diamonds in ten selling cycles during the year. The volume and quality can vary but is a good barometer of appetite for natural diamonds, as well as prices. In the last cycle of 2023, De Beers sold $130 million worth of diamonds compared with $417 million a year prior."

In spite of this progress, lobbyists for real diamonds are still able to question the sustainability of lab-grown diamonds (see Strategic CSR – Diamonds):

"'Consumers are being told that lab-grown diamonds are sustainable and that couldn't be further from the truth,' says David Kellie, CEO of the Natural Diamond Council, a diamond mining trade group. The group began airing videos on social media in April as part of what it calls a 'myth-busting' campaign. According to a new report by the group, more than 60% of lab-grown diamonds are made in China and India, where climate-polluting coal is the major power source. The report also touts efforts by the mining industry to cut carbon emissions and boost the economies of countries with major diamond mines such as Botswana and Namibia."

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/

Lab-Grown Diamonds Go Green

By Yusuf Khan

January 11, 2024

The Wall Street Journal

Late Edition – Final

B6

https://www.wsj.com/articles/diamonds-made-with-solar-power-are-offering-fiancees-ethical-fashion-475d1c7b

 

Strategic CSR - Diamonds

The article in the url below suggests that artificial (man-made) diamonds are beginning to make serious inroads into the market for natural diamonds:

"More than a third of all engagement rings with center stones purchased last year were created in a lab, according to an online survey of nearly 12,000 U.S. couples. … That's double the number from 2020."

Since the survey data are self-reports, the results might be dismissed by some but, if there is a bias, I would expect it to be in favor of inflated numbers for real diamonds. More important, I think (and missing from the report), is whether it is price or values that is driving demand. A natural diamond takes millions of years to be created and then, of course, needs to be mined under conditions that are often far from ideal. Artificial diamonds, on the other hand, clearly do not take quite so long and are much more accessible (and ethical):

"Man-made diamonds are grown by placing a diamond seed in a sealed chamber with a carbon-containing gas such as methane. The carbon atoms bond like a lattice to the seed, building up a diamond crystal. It takes about 600 hours to grow one carat depending on the method. Their appeal, according to lab-diamond makers, is that they cause less environmental and human damage than mining diamonds from the earth as well as their cheaper price."

As a result, it is assumed, their popularity is spreading:

"It's not just engagement rings. Diamonds grown in a lab accounted for 13.6% of the $88.6 billion in diamond jewelry sold globally in 2022, up from less than 1% in 2015 where they had hovered since the early 2000s."

Specifically, the goal (for supporters) is to eradicate the possibility of an unethical supply chain:

"Proponents of man-made diamonds say growing diamonds in a lab helps stamp out conflict diamonds, or diamonds mined in war-torn regions and used to fund insurgencies. [In response] The mining industry says it traces the origins of diamonds to help stop the flow of conflict diamonds under what is called the Kimberley Process."

But, even if the primary motivating factor is morality (and the environmental angle is interesting), it is not clear there is an easy choice, as the main lobbing group for the diamond industry is getting better at arguing:

"'Consumers are being told that lab-grown diamonds are sustainable and that couldn't be further from the truth,' says David Kellie, CEO of the Natural Diamond Council, a diamond mining trade group. The group began airing videos on social media in April as part of what it calls a 'myth-busting' campaign. According to a new report by the group, more than 60% of lab-grown diamonds are made in China and India, where climate-polluting coal is the major power source. The report also touts efforts by the mining industry to cut carbon emissions and boost the economies of countries with major diamond mines such as Botswana and Namibia."

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/

This Wedding Season, Diamonds Face a Challenge

By Suzanne Kapner

April 29-30, 2023

The Wall Street Journal

Late Edition – Final

B1, B6

https://www.wsj.com/articles/this-wedding-season-diamonds-face-a-challenge-171c9e7

 

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 - 8 billion

The article in the url below alerts us to the further expansion of the world's population, which is just about to break another record:

"Later this year—any day now really—the global population is projected to cross eight billion people. The United Nations recently pegged the date as Nov. 15, but we don't know with any exact precision."

The growth of the world's population seems relentless, which is where the article suggests our perceptions are mistaken:

"But as we cross eight billion people, it is worth considering that the world might never make it to 10 billion, or even nine billion, and that the world's major demographic problems won't stem from the growing masses but from shrinking countries, aging populations and dwindling workforces."

There is nothing suspicious about this, but is in fact the normal course of events. As affluence spreads, the need to have larger families decreases:

"We aren't talking about meteor strikes, alien invasions or apocalyptic scenarios (though, of course, that could do it, too) but rather straightforward demographic projections that conclude that birthrates have been falling so rapidly around the world that we could potentially reach the peak of human population in less than a generation."

The chart accompanying the article suggests broad agreement among different predictions about the overall trajectory, even if the specific numbers diverge by the odd billion, or so: 

The difference can largely be attributed to competing projections for the population of Africa:

"The U.N. projects Africa's population will grow from 1.3 billion today to 3.9 billion by century's end. Once education is accounted for, Wittgenstein's baseline scenario projects Africa's population will rise to 2.9 billion during that time period. In another scenario from Wittgenstein, which it calls the 'rapid development' scenario, the population of Africa will only reach 1.7 billion by century's end."

Either way, that is a lot of people who are consuming the world's resources at a rapid rate.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

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

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

Global Population Is About the Hit 8 Billion – and Some Argue It Is Near Its Peak

By Josh Zumbrun

August 12, 2022

The Wall Street Journal

https://www.wsj.com/articles/global-population-is-about-to-hit-8-billionand-some-argue-it-is-near-its-peak-11660252977

Strategic CSR - AIDs

The article in the url below highlights recent developments by corporations in South Africa, such as the mining company Anglo American, to deal with AIDs infections among its employees. The goal is twofold—to prevent as many employees as possible from becoming HIV+, while helping provide the support and treatment necessary for those who are infected:

 

“Bosses receive a daily e-mail that shows, statistically speaking, ‘which is the safest mine to have sex’, says John Standish-White, an Anglo executive and a champion of its AIDS policy. Managers are judged by it. There is even a trophy for the mine with the lowest score. Any employee who tests positive for HIV is offered antiretroviral drugs paid for by Anglo. So the 17% of Anglo’s South African staff with HIV can live a normal life. The firm’s big push now is to slow down or stop new infections.”

 

In response to the firm’s proactive efforts, 80% of all employees have now been tested and the issue of AIDs is openly-discussed:

 

“The results of all this were better than anyone dared to hope. Free drugs gave workers an incentive to get tested, so many did. Thanks to lobbying by activists and improvements in technology, the price of drugs meanwhile plummeted from roughly $10,000 per person per year in the late 1990s to as little as $100 today. Drug firms made their medicines simpler to take: a pill or two a day instead of lots. Corporate AIDS programmes are starting to pay for themselves by cutting absenteeism and staff turnover, not to mention improving morale. Anglo’s Dr Brink talks of ‘turning a disaster into something we could manage.’”

 

This approach has affected the overall relationship the firm has with its employees. In short, in relation to its employees, the firm now does not see its responsibility (or self-interest) as confined to the workplace:

 

“The fight against AIDS has subtly changed the relationship between firms and their workers. Before AIDS, a mine boss at Anglo would worry about rockfalls but feel it none of his business if an employee took risks at home. These days he takes a paternalistic interest in the sex lives of his workers. … Since Anglo started monitoring its workers’ health more closely it has discovered other problems, such as rising obesity and hypertension, and started to tackle them.”

 

At Anglo American, at least, the business argument for doing so is easy for the firm to make:

 

“Mining firms have a strong incentive to keep employees healthy, because they are hard to replace. Miners become familiar with the unique geology of the mine where they work. Staff turnover is only 2.4% a year at Anglo. Also, its record in tackling HIV may help it secure the ‘social licence’ to mine in other regions with virulent diseases, such as malaria.”

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

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/

 

 

Sex, drugs and hope

April 13, 2013

The Economist

68

http://www.economist.com/news/business/21576083-how-big-business-fought-aids-south-africa-sex-drugs-and-hope

 

Strategic CSR - Monsanto

I am no defender of Monsanto, but the article in the url below presents some data that are hard to ignore. In particular, the article focuses on crop yields in different countries. In the U.S., where Monsanto has had a large and controversial influence on the agribusiness industry, crop yields are far superior to countries with less-developed agribusiness industries:

“Typical corn yields, in bushels per acre:

• U.S. - 150
• Argentina - 129
• Mexico - 126
• EU - 119
• Brazil - 98
• China - 84
• South Africa - 68
• E. Europe - 56
• India - 37”

While mass-produced agriculture is far from ideal for the ecosystem, certainly not for everyone, and criticized by many (e.g., http://www.corpwatch.org/article.php?id=15783), it is hard to ignore the data. Some of Monsanto’s innovations can add value in developing economies with agricultural sectors routinely decimated by difficult weather patterns, low access to fertilizers, and overall inefficiency:

“India gets as many bushels of corn per acre as the U.S. did 70 years ago.”

There is insufficient land in the world to satisfy our food demands solely via organic production methods. While national governments play a huge role in policing food production (making sure it is safe and sustainable), it is hard to escape the conclusion that firms like Monsanto need to be included as part of the solution to satisfying the nutritional needs of the world’s growing population.

Have a good weekend.

David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)

© Sage Publications, 2011

http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/

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

More Monsanto Magic Likely to Be Reaped

By Spencer Jakab

April 4, 2012

The Wall Street Journal

C1

http://online.wsj.com/article/SB10001424052702304750404577322042307002620.html

Strategic CSR - Shell

The articles in the two urls below detail the ongoing litigation against Shell that was argued last week before the U.S. Supreme Court. The case was brought by members of the Ogoni people, claiming Shell’s complicity with the Nigerian government for human rights abuses committed in Nigeria during the 1990s.

Legal standing in the case before The Court rests on the application of the Alien Tort Claims Act (1789) to the issue of whether a corporation can be sued for human rights abuses committed overseas (Chapter 1: What is CSR? p11):

“The answer turns on the meaning of the Alien Tort Statute, a 1789 law that allows federal courts to hear ‘any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.’ The law was largely dormant until the 1980s, when federal courts started to apply it in international human rights cases.”

The Justices, during oral arguments, did not seem very convinced:

“‘This case was filed by 12 Nigerian plaintiffs who alleged that respondents aided and abetted the human rights violations committed against them by the Abacha dictatorship in Nigeria,’ Justice Alito said, quoting. Then he asked: ‘What business does a case like that have in the courts of the United States? There’s no connection to the United States whatsoever.’”

What I find striking about the case, however, is that The Supreme Court decided in 2004 that, under this legislation, individuals in certain situations can be held liable for their role in human rights abuses committed overseas (see Nina Totenberg’s report on this case at: http://www.npr.org/2012/02/28/147507940/human-rights-victims-seek-remedy-at-high-court):

“A 2004 Supreme Court decision, Sosa v. Álvarez-Machain, left the door open to some claims under the law, as long as they involved violations of international norms with ‘definite content and acceptance among civilized nations.’”

Irrespective of your position on Shell’s relationship with the Nigerian government, the last time I checked-in with The Supreme Court, the Justices considered corporations to be legal individuals. So, why is the application of a law to corporations that has been decided applies to individuals even an issue before The Court?

Could it be that corporations are individuals when it comes to the rights that status conveys (e.g., free speech), but not when it comes to the responsibilities?

Take care

David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)

© Sage Publications, 2011

http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/

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

Court Debates Rights Case Aimed at Corporations

By Adam Liptak

The New York Times

Late Edition – Final

A19

http://www.nytimes.com/2012/02/29/us/supreme-court-debates-human-rights-case-against-companies.html

Bringing ‘Alien Torts’ to America

By David B. Rivkin Jr. and Lee A. Casey

The Wall Street Journal

Late Edition – Final

A15

http://online.wsj.com/article/SB10001424052970204520204577249072967967832.html

Strategic CSR - Conflict Minerals

The article from Newsweek in the url below is interesting because it describes a growing pressure on technology firms to be held accountable for the raw materials they use to produce many of the communication products on which we rely (see also Issues: e-waste, p326):

“It takes a lot to snap people out of apathy about Africa’s problems. But in the wake of Live Aid and Save Darfur, a new cause stands on the cusp of going mainstream. It’s the push to make major electronics companies (manufacturers of cell phones, laptops, portable music players, and cameras) disclose whether they use “conflict minerals”—the rare metals that finance civil wars and militia atrocities, most notably in Congo.”

What I found most interesting about the story, however, was a throwaway line heralding the topical nature of the campaign:

“… new rules requiring American-listed companies to improve their supply-chain transparency are folded into the financial-reform bill that passed Congress this week.”

A little searching on the web led me to this industry association blog entry (http://blog.ipc.org/2010/06/28/1061/ on the IPC website, which carries the tag line: Association Connecting Electronics Industries) complaining about the “heavy-handed legislation.” I thought the blog’s summary of the requirements in the legislation (plus comments) was worth quoting at length:

“Once passed by the Senate and House and signed by the president, the legislation will require companies whose manufactured goods contain tin, tantalum, tungsten, or gold to:

• Report annually to the SEC (Securities and Exchange Commission) if the minerals did originate from the Congo or adjoining countries. It is unclear what the obligation will be for companies who cannot determine from where the minerals originated.

• Submit a due diligence plan with the company’s annual SEC report that includes:

a. A description of the measures taken by the company to prevent sourcing from the Congo;

b. A description of the products manufactured or contracted to be manufactured that are not conflict free, the facilities used to process the conflict minerals, the country of origin of the conflict minerals, and the efforts to determine the mine or location of origin;

c. An independent third party audit of the company’s due diligence plan; and

d. A certification by the company of its due diligence report (there is no definition of “certify” included in the language so that obligation is vague).”

While claiming that:

“For the past several years, industry groups, including Electronics Industry Citizenship Coalition (EICC), the Global eSustainability Initiative (GeSI), the International Tin Research Institute (ITRI) Tin Supply Chain Initiative (iTSCi) and the IPC Solder Product Value Council (SPVC), have been working to provide transparency and accountability concerning the supply of raw materials coming from the conflict zones of the Democratic Republic of Congo (DRC).”

the blog entry predicts the new legislation will likely result in:

“… total industry divestment from the DRC and adjacent countries — removing an important legitimate source of income in the resource-poor region in addition to clamping down on illegitimate mines.”

Although the IPC clearly has an interest in this issue, because it represents firms in the electronics industry, they post more information about conflict minerals in consumer electronics goods at: http://www.ipc.org/minerals

There is also more information available from the NYT (http://www.nytimes.com/2010/06/27/opinion/27kristof.html) and a quick Google search for ["conflict minerals" Dodd-Frank] produces a great deal more information.

Take care
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)
© Sage Publications, 2011
http://www.sagepub.com/strategiccsr2e/

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


The Genocide Behind Your Smart Phone
Our biggest gadget makers—including HP and Apple—may inadvertently get their raw ingredients from murderous Congolese militias. A new movement wants them to trace rare metals from ‘conflict mines.’
By Alan Mascarenhas
NEWSWEEK
Published July 16, 2010
http://www.newsweek.com/2010/07/16/the-genocide-behind-your-smart-phone.html

Strategic CSR - Live Aid

The article in the url below marks the twenty-fifth anniversary of Live Aid and contains some interesting statistics that, in retrospect (and, in spite of raising nearly $300mn), question the success of the event:

“Recently released CIA documents from 1985 (and a subsequent BBC investigation) suggest that so much of the money went to arms instead of food that it may have prolonged and deepened Ethiopia's humanitarian catastrophe.”

More generally, the article argues that aid is destined to fail unless fundamental institutions of state (e.g., transparent and accountable governance, rule of law, property rights, etc.) are in place:

“The quarter-century since Live Aid has borne out irrefutably that famine and poverty cannot be solved with charity alone. We can only stop them by putting an end to corruption and instability.”

The article quotes Bono in 2005:

“This is the number one problem facing Africa, corruption; not natural calamity, not the AIDS virus. This is the number one issue and there's no way around it.”

This is a sensitive issue and a controversial perspective, but one that should be taken seriously.

Have a good weekend.
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)
© Sage Publications, 2011
http://www.sagepub.com/strategiccsr2e/

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


The Failure of the Live Aid Model
By John-Clark Levin
689 words
14 July 2010
The Wall Street Journal
A17
http://online.wsj.com/article/SB10001424052748704288204575363400690371326.html

Strategic CSR - Shell

The articles in the two urls below reflect the extent to which firms are increasingly being held accountable for their actions overseas and how the U.S. Alien Tort Claims Act of 1789 is the tool activists are using to achieve their goals:

“The current suit was brought under the Alien Tort Claims Act, an arcane law written in 1789 to fight piracy, which is increasingly being used for lawsuits asserting human rights violations that occurred overseas. The Supreme Court ruled 6 to 3 in 2004 that foreigners could use American courts in limited cases, like crimes against humanity or torture. So far no corporation has been found guilty under the alien tort law, though human rights lawyers note that several cases are still moving through the court system.”

The articles here focus on Shell’s past work in Nigeria—it was the first company to drill for oil there in 1956. They highlight the firm’s alleged role in the death of Ken Saro-Wiwa and eight of his colleagues by the Nigerian government in 1995—litigation that has been ongoing since the activist’s death and, 14 years later, continues to haunt Shell:

“The trial … will examine allegations that Shell sought the aid of the former Nigerian regime in silencing Mr. Saro-Wiwa, a vociferous critic, in addition to paying soldiers who carried out human rights abuses in the oil-rich but impoverished Niger Delta where it operated. Shell strongly denies the charges.”

The articles also, however, detail allegations in many countries against numerous other multi-national firms (often extraction companies). These firms have achieved significant wealth mining the natural resources of countries whose local populations feel they were not fairly compensated:

“In December, Chevron, Shell's rival oil multinational, was cleared in a separate case alleging complicity in human rights violations in Nigeria. There are also wide-ranging claims against multinationals in industries including banking and pharmaceuticals over alleged abuses in apartheid South Africa. … There have been cases France, the Netherlands and Ecuador while in England thousands of Ivory Coast nationals are suing Trafigura, the oil trading company, over waste dumped by a subcontractor that allegedly made them ill.”

Thinking about this issue for a number of years, now, there is no easy answer to the situation firms face when operating in countries with corrupt governments that are indifferent to the suffering of their local populations. For-profit firms are not substitutes for elected governments; they are neither diplomats, nor politicians. Having said this, the body of litigation that is being waged against these firms and the nature of the events that prompted it, indicate that there is much more that these firms could have done to minimize their exposure to risk.

On June 8, 2009, Shell agreed to settle the case with a payment of $15.5m, while continuing to deny that it had anything to do with Ken Saro-Wiwa’s death (http://www.nytimes.com/2009/06/09/business/global/09shell.html).

Take care

David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility

© Sage Publications, 2006

http://www.sagepub.com/Werther/

Oil industry braces for rights abuses trial Shell to answer charges in connection with the death of Nigerian activist

By Jad Mouawad

The New York Times

1327 words

23 May 2009

1

http://www.nytimes.com/2009/05/22/business/global/22shell.html

Old law exhumed by rights fighters; A stream of litigation targeting companies has opened up thanks to the renaissance of a 220 year old statute, writes Michael Peel

By Michael Peel

1485 words

26 May 2009

Financial Times

London Ed1

14

http://www.ft.com/cms/s/0/55232f38-498d-11de-9e19-00144feabdc0.html

Strategic CSR - De Beers

The article in the url below presents a case study of the positive impact that De Beers has had in Africa, in general, and Botswana, in particular:

“There is also no question, though, that Botswana was greatly aided by something else: De Beers's own sense of -- to use the current term of art -- corporate social responsibility.”

The author argues that, unlike many other firms that have extracted Africa’s resources (and continue to do so today), De Beers sought to build sustainable operations by building the local infrastructure that would also ensure the country’s development:

“Practically from the start, it entered into a 50-50 joint venture with the government; about a decade ago, it also sold the government a 15 percent stake in the company. … It has also built roads, hospitals and schools in Botswana; worked to help the country deal with H.I.V. and AIDS; and been involved in and paid for a hundred other things that have helped make Botswana an African success story.”

The author is quick to point out that this was not a charitable act by De Beers, but helped ensure the firm also continued to succeed:

“Botswana's citizens need roads -- but so does De Beers, to transport its diamonds. De Beers needs a healthy work force, so its emphasis on H.I.V. awareness and treatment is clearly in its self interest. Indeed, a more prosperous Botswana helps De Beers in every way imaginable, not least by providing a stable environment in which it can do business.”

The remainder of the article tracks the firm’s evolution in relation to the development of the diamonds industry and the role of the current CEO (appointed in 2006) in shaping the firm’s CSR profile:

“In the two years he's been the chief executive, Mr. Penny has become a proselytizer for what he likes to call ''beneficiation'' -- which is a fancy word for doing well while doing good. … He went on to say that every company doing business in Africa needed to practice this kind of enlightened stewardship if it hoped to succeed over the long haul.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Diamonds Are Forever In Botswana
By JOE NOCERA
1769 words
9 August 2008
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2008/08/09/business/worldbusiness/09nocera.html

Strategic CSR - Zimbabwe

The article in the url below outlines the difficult decisions faced by firms operating in a country when world opinion moves in favor of sanctions and pressure on multi-nationals to withdraw (Issues: Cultural Conflict, p160; Companies Trying to Do CSR Well: Shell, p302):

“Doing business with Zimbabwe at a time when the world's media are showing the violent suppression of dissent can damage their reputations - as many found during the apartheid years in South Africa. Yet withdrawal could hurt ordinary people while having little impact on the government - and might delay recovery when democracy is eventually restored.”

The article cites a number of examples of western firms that provide meaningful employment to hundreds of Zimbabweans. The UK supermarket, Waitrose, for example, imports fish that are fair- trade certified from its Zimbabwe supplier. This firm:

“… employs 450 people, paying them "substantially more" than the minimum basic wage, according to Waitrose. They are also given other cash allowances, free lunches and HIV/Aids support, with medical insurance and membership of pension schemes for permanent employees.”

The article also raises the difficult case of the mining firm Anglo-American, which is currently investing in Zimbabwe to establish a platinum mine. As one source is quoted as saying, withdrawal represents:

"gesture politics . . . If Anglo American pulled out, their shoes would be filled very quickly by the Chinese. The precedent was set in Sudan, where the Chinese moved in after the imposition of western sanctions."

Ultimately, continued involvement legitimizes the current administration and, while life remains bearable for ordinary people, there is little hope of bottom-up regime change. On the other hand, however, withdrawal can cause real pain and can hamper recovery once change occurs. The ‘best’ decision is not apparent and, unfortunately, media coverage tends toward the emotional, rather than helping make the ‘best’ decision for those most affected—in this case, the Zimbabwean people.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Mangetout and Mugabe; Multinationals wrestle with their Zimbabwe role
By John Willman, Business Editor
1469 words
5 July 2008
Financial Times
Asia Ed1
10
http://www.ft.com/cms/s/0/6b315526-49fb-11dd-891a-000077b07658,dwp_uuid=70bd196c-ffc3-11dc-825a-000077b07658.html

Strategic CSR - De Beers

The article in the url below is an interview with Gareth Penny, CEO of De Beers. Penny took over as CEO of the diamond company in 2006 in the middle of the ‘conflict diamonds’ crisis (Issues: Country of Origin, p223):

“Rapper Kanye West's "Diamonds From Sierra Leone" in 2005 and the movie "Blood Diamond" in 2006 were triggering a wave of negative publicity about buying "conflict diamonds," which were sold in the 1990s by African rebels to help pay for their wars.”

The interview asks Penny about what he has done to steer De Beers through this (“One hundred percent of De Beers diamonds today are conflict free. … It is estimated that 99.8% of all diamonds in the world flow through the Kimberley Process, which is extraordinary”) and other CSR-related issues. It also delves into his perspective on De Beers’ role as a leader in the diamonds industry today:

“Today, De Beers is "in transition," says Mr. Penny, 45 years old. The company, whose sales slipped 2.8% last year to $6.84 billion, has a new business model and is trying to polish its image. And Mr. Penny now casts himself as an unofficial ambassador for Africa who can help bring businesses and jobs to the continent.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Boss Talk: De Beers Polishes Its Image --- CEO Penny Refashions Business Model to Tackle Diamond Giant's Flaws
By Vanessa O'Connell
1255 words
7 July 2008
The Wall Street Journal
B1
http://online.wsj.com/public/article/SB121538963806131221.html

Strategic CSR - Product (Red)

The press release in the url below contrasts the cynicism it says people feel towards the idea “that we can help poor victims of AIDS in Africa by going shopping” with the notable success of Product (Red) (http://www.joinred.com/):

“Then again, there’s this number: $110 million. That’s the amount of money that (Red) partners have generated for the Global Fund To Fight AIDS, Tuberculosis and Malaria to provide AIDS treatment in Ghana, Rwanda, Swaziland and Lesotho.”

Product (Red) was launched in January 2006 by, among others, Bono and the range of products now available is extensive:

“… now you can buy (Red) phones from Motorola, (Red) iPods from Apple, (Red) greeting cards from Hallmark, (Red) laptops from Dell, (Red) shoes from Converse and (Red) watches from Emporio Armani.”

In spite of this success, however, the author outlines three reasons for concern that expose the limitations of such campaigns. The first reason argues for greater transparency among the participating firms:

“… if all these companies want credit for supporting a good cause, we ought to be able to know how much financial support they are actually delivering.”

The second reason questions whether consumption provides a sustainable solution to any social problem:

“But Americans already consume way too much stuff. The message of Product (Red) is that we can buy that new cell phone or wrist watch and feel good about it because we are helping victims of AIDS.”

And, the final reason raises the potential that Product (Red) might result in an overall decrease in social engagement:

“But what if, after buying that Gap T-shirt, consumers feel they’ve done their part? What if Product (Red) becomes a substitute for either activism or charitable giving?”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Better (Red) Than Dead
Marc Gunther
CSRwire Weekly News Alert
August 5, 2008
http://vcr.csrwire.com/node/9680

Strategic CSR - BOP

The article in the url below from BusinessWeek presents an enlightened, progressive approach to combating poverty at the Bottom of the Pyramid (BOP) that was developed by Paul Polak, founder of the nonprofit organization International Development Enterprises (IDE) (Issues: Profit, p200):

“Founded by Polak in 1981, IDE is based on the belief that there are simple solutions to the seemingly complex problem of poverty, and that those solutions are based on enabling the entrepreneurial spirit of the poor.”

Given the fact that “800 million of the world's poorest earn their living from one-acre farms”:

“IDE's focused mission has been to develop radically low-cost tools that will help subsistence farmers become small-scale commercial farmers. … IDE only develops products that will pay for themselves in the first year through the buyer's increased productivity.”

As well as design innovative products, IDE also invests in others who are pursuing equally innovative solutions:

“When IDE began promoting treadle pumps in Bangladesh in the 1980s, for instance, the organization recruited four manufacturers to produce the pumps by offering them marketing assistance.”

Polak reports that his focus on market solutions for poverty instead of charitable handouts, rather than being welcomed, has run into resistance from entrenched interests within the international development community. Polak believes, however, that:

“The only sustainable, scalable approach to fighting poverty is to give poor people a way of increasing their income; to treat the poor as potential entrepreneurs, rather than as recipients of charity.”

As quotes from Polak in the article illustrate, there are often unforeseen consequences of well-intentioned charitable interventions that often undermine the broader objectives that justified the initial action. And, ultimately:

“"We have invested a staggering $568 billion in development aid in Africa over the past 42 years, and have very little to show for it," says a World Bank economist quoted in Out of Poverty.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Business Week Online
Insider Newsletter
February 28, 2008
********************
Giving the Poor a Means to Work
Paul Polak and his company, International Development Enterprises, have helped 17 million people lift themselves out of poverty
by Jessie Scanlon
http://newsletters.businessweek.com/c.asp?695386&c55a2ee820194f0f&69

Strategic CSR - Litigation

Multinational firms find themselves increasingly exposed at home for actions taken at all points along their global supply chain (Issues: Litigation, p245). The article in the url below describes a case brought by a UK law firm against a UK Headquartered firm on behalf of victims in a poisoning case in the Ivory Coast:

“The Ivorian case centres on an incident in 2006 in which 500 tonnes of waste was allegedly discharged from the Trafigura chartered vessel, the Probo Koala, around the lagoon city of Abidjan. The Ivorian government said the dumping caused poisoning that killed 10 people and led more than 100,000 to seek medical advice.”

The UK law firm is able to bring the action against the UK firm in London, rather than in the jurisdiction of the location of the incident (the Ivory Coast), because of recent EU legislation:

“The case highlights how a landmark European Court of Justice judgment has made it easier for groups of litigants to launch legal claims in the European courts. Mr Day says he was able to bring the case in London thanks to the 2005 European ruling, which gave any claimant an automatic right to sue in the defendant's home country.”

Rightly or wrongly, firms are increasingly being held accountable for their actions and the actions of their partners worldwide. Consequently, even if they do not feel a moral or (locally) legal obligation to do so, self-interest demands they exert greater control over their global supply chains and production processes:

“The Ivorian case may give at least a taste of what is to come if collective actions move into the European mainstream, rather than remaining the preserve of niche firms in turbulent places. Then - whether they think it fair or not - companies will potentially be on more hazardous legal terrain. As Mr Day puts it: "I would hope that in 10 years this would become the norm."”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Lawyers in a hunt for big game.
By MICHAEL PEEL
1144 words
31 January 2008
Financial Times
London Ed1
Page 14
http://search.ft.com/nonFtArticle?id=080131000067&ct=0

Strategic CSR - Fashion

The slide show put together by Businessweek in the url below highlights the extent to which social issues are beginning to surface in the fashion industry (Issues: Auditing CSR, p94; Advertising, p151; Brands, p153; Cultural Conflict, p160; Sex, p268):

“Fashion used to be the epitome of vanity and conspicuous consumption. But now, a number of designers are espousing causes, such as erasing global poverty and AIDS, and producing clothing that drives emerging nation development and combats worker abuses.”

The poster child for such efforts is Bono’s Product Red:

“Partner companies include Gap, which is selling a number of Red-branded products including an African cotton T-shirt made in Lesotho; Converse, which is offering a limited-edition sneaker made of African mud cloth; and Giorgio Armani, which plans to expand its Product Red line to include fragrances and jewelry this spring.”

But, a number of other designers and clothing firms are also featured:

“American Apparel trumpets its “vertically integrated” manufacturing, which consolidates every stage of production into its factory in downtown Los Angeles. “Worker-positive” conditions are bolstered by subsidized lunches, free English classes, low-cost health insurance, and on-site massages. The company recently launched a Sustainable Edition line of T-shirts made with organic cotton and has pledged to convert more than 80% of its cotton consumption to sustainable cotton over the next several years.”

To the extent that these products are demand-driven, the increasing expectations placed on businesses to solve social problems are a positive. To the extent, however, that they are supply-driven, with little consumer support, they are likely to be short-lived. One year after the publication of this article, it would be interesting to see sales figures associated with each of the products and firms featured here.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Business Week Online
Insider Newsletter
Friday, January 12, 2007
********************
GUILT-FREE FASHION
Humanity Is Now in Fashion
A new breed of designer is looking at clothing as a way to help address social ills
By Kerry Miller
http://newsletters.businessweek.com/c.asp?id=643684&c=c55a2ee820194f0f&l=6

Strategic CSR - Social Marketing

The article in the url link below demonstrates clear boundary constraints on the ability of the market to deliver social value (Issues: Profit, p200). The article argues that, at least in terms of the most effective means of distributing malaria nets to those who need them most, handing them out for free is a far superior means of distribution:

“In doing so, Dr. Kochi [the blunt new director of the World Health Organization's malaria program] turned his back on an alternative long favored by the Clinton and Bush administrations -- distribution by so-called social marketing, in which mosquito nets are sold through local shops at low, subsidized prices -- $1 or so for an insecticide-impregnated net that costs $5 to $7 from the maker -- with donors underwriting the losses and paying consultants to come up with brand names and advertise the nets.”

Past experience with social marketing suggests, in areas where there is little or no existing market infrastructure, trying to impose a market solution is ineffective:

“In 2000, a world health conference in Abuja, Nigeria, set a goal: by 2005, 60 percent of African children would be sleeping under nets. By 2005, only 3 percent were.”

The example presented in the article is compelling:

“Maendeleo, a village of about 140 mud-walled shacks with tin roofs, was part of a five-year study of 40 health districts. When it started in 2002, the only nets were those for sale in small shops, Dr. Olumese said, and only about 7 percent of people had them. Social marketing was introduced by Population Services International, a large aid contractor. That increased coverage to about 21 percent by early 2006. Then, late last year, the health ministry got a big grant from the Global Fund to Fight AIDS, Tuberculosis and Malaria that allowed it to hand out 3.4 million free nets in two weeks. Coverage rose to 67 percent, and distribution became more equitable. … Deaths of children dropped 44 percent. It also turned out to be cheaper.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Distribution of Nets Splits Malaria Fighters
By REUBEN KYAMA and DONALD G. McNEIL Jr.; Reuben Kyama reported from Maendeleo, Kenya, and Donald G. McNeil Jr. from New York.
1280 words
9 October 2007
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2007/10/09/health/09nets.html