Strategic CSR - Repair cafes

The article in the url below presents a great example of community building — a "repair cafe":

"A dusty film projector. A torn pair of jeans. An electric ukulele gone silent. One recent morning in New York City's East Harlem neighborhood, about 50 people huddled in a converted public school with a common purpose: To give broken things a second life."

They also represent a more sustainable existence:

"Repair Cafe El Barrio is one of a growing number of gatherings that offer help to fix all manner of household items for free. Dubbed 'repair cafes,' their mission is to reduce waste, nurture refurbishing skills and bring a neighborhood closer together."

Most importantly, perhaps, in terms of community building:

"The fixers, or 'repair coaches,' are all volunteers. There are artists, scientists, retired electricians, all neighborhood folks good with their hands. There is friendly conversation and freshly-brewed coffee."

And New York leads the way:

"The first repair cafe came together in Amsterdam in 2009 in the aftermath of the global financial crisis. The concept made its way to America three years later. Since then, New York state — from the Hudson Valley to New York City — has led the country in the number of repair cafes with weekly or monthly events at nearly 70 locations and counting."

An idea that is encouragingly widespread:

"Across the country, there are some 200 locations, according to a directory maintained by the Repair Cafe Foundation, an international network of repair event organizers that follows a loose set of rules. Worldwide, there are more than 2,500 locations. When you count other similar nonprofit 'fix-it clinic' models, the number increases."

Essentially, all the cafes have a common goal:

"The gatherings are meant to be an antidote to today's throwaway culture, fueled by a concern that unbridled consumption is pushing the planet's resources to the brink."

Hope everyone in the U.S. had a restful Thanksgiving.

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/

At These Cafes, It's Always a Free Fix Menu

By Hiroko Tabuchi

June 4, 2025

The New York Times

Late Edition – Final

16

https://www.nytimes.com/2025/10/21/climate/on-the-menu-in-new-york-one-repair-coming-right-up.html

Strategic CSR - ESG

The article in the url below updates a newsletter I sent in September about how executives, in the face of growing ideological polarization around ESG-related issues, are engaging in "green-hushing" by mentioning ESG less often on quarterly calls (see Strategic CSR – Green-hushing):

"Many companies no longer utter these three letters: E-S-G. Following years of simmering investor backlash, political pressure and legal threats over environmental, social and governance efforts, a number of business leaders are now making a conscious effort to avoid the once widely used acronym for such initiatives."

Instead:

"On earnings calls, many chief executives now employ new approaches. Some companies, including Coca-Cola, are rebranding corporate reports and committees, stripping ESG from titles. Advisers are coaching executives on alternative ways to describe their efforts, proposing new terms like 'responsible business.' On Wall Street, meanwhile, some firms are closing once-popular ESG funds as interest fades."

The chart accompanying the article, illustrating the number of S&P 500 firms that refer directly to "ESG" in their quarterly earnings calls, is instructive:

This pattern is replicated within firms, also, including some of the most high-profile advocates for ESG. For example, I saw this chart recently from Bloomberg about Larry Fink's BlackRock:

 

And, even more dire, in New Hampshire (and a few other U.S. states), the Republican-led legislature has tried to criminalize ESG investing:

"Republican lawmakers in New Hampshire are seeking to make using ESG criteria in state funds a crime in the latest attack on the beleaguered investing strategy."

My own reaction to this is that the pushback against the ESG 'industry' is justified, but is being motivated by the wrong reasons. Although the partisan rhetoric can be wildly misleading, the lack of consistent definitions and measurements, let alone agreement on what even should be measured, means the ESG industry only has itself to blame (see Strategic CSR – ESG). Moreover, the focus has been almost exclusively on the "E," with little discussion around the huge (and equally essential) areas of the "S" and the "G," which few people understand and even fewer know how to measure. The emergence (and advocacy) of ESG, although no doubt due to good intentions, has been a mess and has set-back the cause as a whole. Because it was so poorly thought-through, the opening was created for those with an ideological agenda (or even for those who just care to exploit the information asymmetry to make money) to wade in, and the result has been both ugly and extremely unhelpful.

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/

Companies Avoid Mentioning ESG, The Latest No-No

By Chip Cutter and Emily Glazer

January 10, 2024

The Wall Street Journal

Late Edition – Final

A1, A6

https://www.wsj.com/business/the-latest-dirty-word-in-corporate-america-esg-9c776003

Strategic CSR - Value

The article in the url below is a radio interview, held a decade after the 2008 Financial Crisis, with the author of a book that had just been released, The Value of Everything: Making and Taking in the Global Economy (2018). The author's goal in writing the book, and why I found it interesting, was to redefine (or perhaps 'recapture' is more accurate) what we understand to constitute value.

To summarize: In calling for a broader theory of value in a wide ranging discussion (in the interview), the author draws a distinction between value determining price (previously) and price determining value (today) – a change she argues has occurred over the last couple of hundred years. In other words, previously, the more we valued the way something was produced, the more we would be willing to pay for it (emphasizing trades people and artisanal skills). This compares to today, where the author argues we now have it backwards because we interpret the price itself as determining how much we should value the product or service – in other words, things that are expensive are, by definition, more valuable to us than things that are cheaper. This same logic can be extended to resources such as labor, which is today valued by wage levels (generally determined at the intersection of demand and supply), rather than necessarily the nature of the work that is performed. In other words, we reward rarity, simply for the sake of being rare, rather than rewarding the work that delivers the most happiness or social value, or some other metric, which we used to do and the author thinks is a more commonsensical understanding of what we should value.

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/

A New Way to Calculate Economic Value

The Brian Lehrer Show

September 10, 2018

WYNC

https://www.wnyc.org/story/new-way-calculate-economic-value/

 

Strategic CSR - Homelessness

I love buildings that have been designed intentionally to serve multiple purposes in the community. A good example is a "new family homeless shelter" in Washington D.C. that is described in the article in the url below and was named after "Aya" ("a benevolent soul in Turkish mythology"):

"The facility, … completed in 2021, aims to live up to its name. The Aya is part of a citywide effort spearheaded by DC Mayor Muriel Bowser in 2016 to create a series of neighborhood homeless shelters, one in each of the city's eight wards. Tasked with designing a 50-unit facility for Ward 6, [the architects] enlisted local residents for their input. The firm's design reflects their priorities …. Neighbors wanted a building that looked hopeful, not bleak."

Moreover, the local community asked that the building should not have a discernable front or a back:

"That means that on top of incorporating the special needs of a shelter for families experiencing homelessness, the designers made sure that the Aya has no face — or rather, four different faces. Each side of the building expresses a different function for the families staying at the shelter. … 'Each façade of the building is telling its own story.'"

There are a number of other features that reinforce the idea that this building is part of the solution for those who live in it, rather than exacerbating the problem, which is a big part of modern-day urban life in the U.S.:

"Families that stay at the shelter are quite young: The average age for children there is 3. So the city required it to offer safe spaces for play. [The architects] designed a series of outdoor-style indoor play rooms on the building's east side, rooms that climb in a stair-wise pattern up the building. Brick brise-soleil screens along these rooms offer a playful mirror of the architectural textures found in mid-century apartment buildings in the neighborhood."

One of the challenges of being a European living in the U.S. (after several years living in Japan) is coming to terms with the level of homelessness that is a very present part of the society in which I live. In short, homelessness is generally not a problem that you see in Europe, or other developed countries like Japan or South Korea. That means there are solutions that work in those countries that are not being applied here in the U.S., for whatever (likely ideological) reason. On that, the article in the second url below presents a fascinating re-framing of the problem, arguing that homelessness is purely a function of the amount of affordable housing in a society. The article also makes clear that homelessness is most definitely not caused by "drug abuse and mental illness," or even climate. Such ailments might be characteristics of homelessness, but not the main cause. This is clear when you realize that homelessness is not experienced equally across the country, but collects in very specific places where housing costs are high, which is most often in areas that are growing in popularity. So much so that, homelessness is really only a problem in those cities that everyone wants to move to:

"Why is this so? Because these 'superstar cities,' as economists call them, draw an abundance of knowledge workers. These highly paid workers require various services, which in turn create demand for an array of additional workers, including taxi drivers, lawyers and paralegals, doctors and nurses, and day-care staffers. These workers fuel an economic-growth machine—and they all need homes to live in. In a well-functioning market, rising demand for something just means that suppliers will make more of it. But housing markets have been broken by a policy agenda that seeks to reap the gains of a thriving regional economy while failing to build the infrastructure—housing—necessary to support the people who make that economy go. The results of these policies are rising housing prices and rents, and skyrocketing homelessness."

More specifically, because these supercities in the US are largely Democratic, the article argues it is the liberal policies advocated in these areas that are fueling the homeless crisis:

"Liberals have stated preferences that housing should be affordable, particularly for marginalized groups that have historically been shunted to the peripheries of the housing market. But local politicians seeking to protect the interests of incumbent homeowners spawned a web of regulations, laws, and norms that has made blocking the development of new housing pitifully simple. This contradiction drives the ever more visible crisis."

It naturally follows that the solution is to build more housing – more affordable housing in those cities to which people want to move means less homelessness:

"Houston's success in combatting homelessness—down 62 percent since 2011—suggests that a focus on moving people into permanent supportive housing provides a road map to success. (Houston is less encumbered by the sorts of regulations that make building housing so difficult elsewhere)."

Although, initially, more housing will stem the price increases of those (loyal voters) who already own their own home; ultimately, it should make these cities even more livable (and desirable) because there should be less incidents of homelessness.

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/

A DC Homeless Shelter with Many Faces

By Kriston Capps

December 10, 2022

Bloomberg

https://www.bloomberg.com/news/features/2022-12-10/a-multifaceted-design-to-shelter-homeless-families-in-dc

The Obvious Answer to Homelessness: And why everyone's ignoring it

By Jerusalem Demsas

December 12, 2022

The Atlantic

https://www.theatlantic.com/magazine/archive/2023/01/homelessness-affordable-housing-crisis-democrats-causes/672224/

 

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 - COVID-19 (II)

As Governor of the Bank of England, from 2013-2020, Mark Carney did much to focus attention on the growing financial implications of climate change for businesses (and, by extension, governments). The article in the url below shows how he continues to use his platform (post-BofE) to advance related issues—in this case, discussing the potential economic implications of COVID-19. In particular, he touches on a debate I have long struggled with—determining where 'value' ends and 'values' begin:

 

"Value will change in the post-covid world. On one level, that's obvious: valuations in global financial markets have imploded, with many suffering their sharpest declines in decades. More fundamentally, the traditional drivers of value have been shaken, new ones will gain prominence, and there's a possibility that the gulf between what markets value and what people value will close."

 

Carney was invited to write this column by The Economist and uses the opportunity to advance an idea originally put forward by the philosopher, Michael Sandel:

 

"This points to a final, deeper issue. … in recent decades, subtly but relentlessly, we have been moving from a market economy to a market society. Increasingly, to be valued, an asset or activity has to be in a market. For example, Amazon is one of the world's most valuable companies, yet the Amazon region appears on no ledger until it is stripped of its foliage, and converted to farmland. The price of everything is becoming the value of everything."

 

Carney sees the shared commitment and sacrifice that characterized the overwhelming public response to COVID-19 as an indication that this imbalance may be shifting:

 

"This crisis could help reverse that relationship, so that public values help shape private value. When pushed, societies have prioritised health first and foremost, and then looked to deal with the economic consequences. In this crisis, we know we need to act as an interdependent community not independent individuals, so the values of economic dynamism and efficiency have been joined by those of solidarity, fairness, responsibility and compassion."

 

At a more fundamental level:

 

"All this amounts to a test of stakeholder capitalism. When it's over, companies will be judged by … how they treated their employees, suppliers and customers, by who shared and who hoarded. After the covid crisis, it's reasonable to expect people to demand improvements in the quality and coverage of social support and medical care, greater attention to be paid to managing tail risks, and more heed to be given to the advice of scientific experts."

 

Hmmm. I hope so, but we'll see. The key, of course, is the extent to which we will remember and will reward those "who shared" and punish those "who hoarded." The ultimate test, as Carney argues, is and will continue to be climate change:

 

"The great test of whether this new hierarchy of values will prevail is climate change. After all, climate change is an issue that (i) involves the entire world, from which no one will be able to self-isolate; (ii) is predicted by science to be the central risk tomorrow; and (iii) we can only address if we act in advance and in solidarity."

 

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/

Putting values above valuations

By Mark Carney

April 18, 2020

The Economist

Late Edition – Final

52

https://www.economist.com/by-invitation/2020/04/16/mark-carney-on-how-the-economy-must-yield-to-human-values

 

Strategic CSR - Democracy

The article in the url below reports on an interesting experiment in France aimed at a limited form of direct democracy:

 

"A nurse, a roofer, an electrician, a former fireman, a lycée pupil, a photographer, a teacher, a marketing manager, an entrepreneur and a civil servant. Sitting on red velvet benches in a domed art-deco amphitheatre in Paris, they and 140 colleagues are part of an unusual democratic experiment in a famously centralised country."

 

The group was formed as part of Emmanuel Macron's response to the Yellow Jackets movement, a citizen's uprising protesting against increased gasoline taxes, specifically, but growing income and wealth inequality, in general:

 

"Their mission: to draw up measures to reduce French greenhouse-gas emissions by at least 40% by 2030, in line with an EU target that is otherwise in danger of being missed. … Six months ago, none of them had met. Now, they have just one month left to show that they can reinvent the French democratic process—and help save the planet."

 

The "citizen's climate convention," as it is known, does not appear to have its own webpage, but it does have a Wikipedia page. The convention consists of a randomly-selected group of citizens who have been tasked with finding alternatives to the gas tax rise, which was so soundly rejected by French citizens last year:

 

"On March 6th the 'citizens' climate convention' was due to begin its penultimate three-day sitting, the sixth since it began work last October. The convention is made up of a representative sample of the French population, selected by randomly generated telephone numbers. … In response to the demand for less top-down decision-making, [Macron] first launched what he grandly called a 'great national debate,' which took place a year ago. He also pledged the creation of a citizens' assembly. It is designed to focus on precisely the conundrum that provoked the original protests against a rise in the carbon tax on motor fuel: how to make green policy palatable, efficient and fair."

 

By all accounts, it is a serious exercise:

 

"Divided into five working groups—to discuss such topics as transport, housing or food—they then began working on proposals that could actually be put into practice. Scientists, farmers, businessmen, urban planners and over 100 other witnesses were summoned. In January they invited Mr Macron, who spent over two hours answering questions and urged them to be 'precise' and 'bold.' In an over-lit basement meeting room on a recent Friday evening, small groups could be found poring over documents, discussing the feedback given by legal experts on their initial ideas. Five lawyers are on hand to help shape proposals into legally enforceable text."

 

It will be interesting to see whether the convention can generate some practical and meaningful policy recommendations. Due to the fact that the group was randomly-selected, it consists of people across the ideological spectrum and, as such, includes a representation of climate sceptics. While the ideological differences remain, perhaps the absence of special interests or lobbying groups can help cut through the inertia that has paralyzed the conventional political process on this issue:

 

"Despite such differences, over 90% of the original delegates are still taking part. … the gravity of the subject, along with Mr Macron's backing, have been crucial in persuading delegates to invest long hours and weekends away from home in the exercise. It is a gamble nonetheless. Next month, the assembly will send its final list of measures to Mr Macron. He has promised delegates that he would put the bulk of them either to parliament, or to a referendum."

 

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/

Aux powerpoints, citoyens!

March 7, 2020

The Economist

Late Edition – Final

50

https://www.economist.com/europe/2020/03/05/france-asks-its-citizens-how-to-meet-its-climate-change-targets

 

Strategic CSR - SRI/ESG

I find the debate around SRI/ESG (socially responsible investing/environmental, social, and governance) to be largely artificial and somewhat distracting. It seems to me that, given the difficulties we face measuring CSR (even defining CSR), identifying correlations between some set of compromise variables and firm performance is spurious (to put it generously). In other words, the filters that structure these investments (such as low pollution levels, or director diversity, or employee pay ratios, or whatever measure you like) miss the point. Primarily this is because, in my mind, CSR is everything the firm does (not easily identifiable parts), but also because this research suffers from omitted variable bias. That is, it is the progressive executive team that adopts good environmental practices (or diverse directors or equitable pay practices), so it is the progressive executive team that predicts performance (not the various practices they adopt). With this in mind, the article in the url below adds another important (and rational) explanation for why much of the discourse around SRI/ESG is misleading. In particular, it identifies a flaw in the argument intended to legitimize this industry—that investing in social responsibility need not compromise performance:

 

"The trouble is, even badly run companies, big polluters or terrible employers have some price at which they will be profitable investments. A recent example is the rebound in the sector environmentalists love to hate: Coal miners globally have returned almost 20% in the past 12 months in dollar terms, double the world market, according to Datastream indexes."

 

Beyond the challenges associated with measuring social responsibility, whenever you constrain choice there is a good chance you will affect outcomes. Similarly, if a lack of demand pushes the price of one stock down, that only makes it a more attractive investment (presuming it is an ongoing, profitable business). It is this same logic that undermines much of the oil and gas divestment activism:

 

"Lower stock prices mean a higher cost of capital for the company, which should hurt. But cheaper shares in the same business mean buyers should expect higher returns in future than they did before. If the do-gooders are successful in driving down stocks, the new shareholders in the badly behaved business should outperform, and the do-gooders underperform."

 

The Figure in the article that shows total returns of the coal sector relative to all stocks is enlightening. The article also has another Figure showing how much individual firms have varied in ESG ratings—reinforcing the idea that we really have no idea of how to measure CSR. But, none of this means that SRI/ESG products are not viable. It just means that, if the industry is to be successful, it has to be more honest with potential customers/investors. Just like there is a cost to purchasing a higher quality product (expressed in terms of a price premium), there is a cost to investing using one or more SRI/ESG filters. Given that reality, customers can choose. The added value comes from knowing that certain firms and industries are being avoided—that investments are aligned with values. But the cost, over the medium to long term, almost by definition, is likely to be lower returns.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

If You Want to Do Good, Expect to Do Badly

By James Mackintosh

June 29, 2018

The Wall Street Journal

Late Edition – Final

B1

https://www.wsj.com/articles/if-you-want-to-do-good-expect-to-do-badly-1530185698

 

Strategic CSR - Unilever

I don't understand the difference between a social enterprise and a for-profit firm. Take this example from the article in the url below about the founding of Unilever:

 

"To most of Unilever's customers, the state of the world is probably the last thing on their minds as they push their shopping carts through the supermarket, tossing in Ben & Jerry's ice cream, Dove soap, Lipton tea, Hellmann's mayonnaise, and other Unilever products. It's hard to imagine that eco-disasters might someday lead to those items disappearing from shelves. But to Unilever, which was born as a solution to a crisis, the potential for calamity seems real enough. The company got its start in the 1880s, right here in this picture-perfect redbrick village near Liverpool called Port ­Sunlight—named after the world's first packaged, branded bar of soap and the company's founding product. It was created in an effort to stop rampant epidemics and child deaths amid the grinding poverty and squalor of Victorian England. Nearly 130 years later, there is still an acute sense at Unilever that the world needs fixing."

 

How is Unilever not a social enterprise? The firm uses market forces to solve societal problems, just like all for-profit firms. In contrast, take this example of TOMS Shoes (see Strategic CSR – TOMS Shoes), which is usually described as a social enterprise. It is essentially the same thing (an organization using market forces to solve a societal problem), but just not as effective as Unilever. At best, the value TOMS is adding seems dubious; in fact, it might be doing more harm than good:

 

"Did you buy TOMS shoes because you want to make the world a better place? If so, you should be a little mad. TOMS, of course, is an accessory company that markets itself like a charity … When someone buys a pair of TOMS shoes in the US, for instance, the company donates a pair of shoes to a child in a poor country like Haiti. … But TOMS and the many other companies like it are the charitable equivalents of yes men. They're telling you what they think you want to hear in order to get what they want (for you to purchase trendy, pricey accessories), not what you need to hear in order to do what you want (to have your purchase to do as much good in the world as it can)."

 

CSR advocates talk about the need for companies to "do good" instead of focusing on profit as if economic problems and social problems are independent of each other. However, a simple thought experiment highlights the overly-simplistic nature of this forced dichotomy. Is feeding people a social problem or an economic problem? Of course, there are hundreds of for-profit food manufacturers (not to mention the hundreds of thousands of restaurants) that produce food and distribute it widely (and efficiently) to whole populations of people. What about clothing people—a social problem or an economic problem? A visit to the shopping mall will quickly reveal how efficiently for-profit firms have essentially eradicated the supply of clothes as a challenge for all but the most deprived societies. Or, what about providing internet access to every household in the country—economic or social? Certainly, you could make an argument that, today, a family is essentially excluded from many aspects of society if it cannot get online; yet, internet provision in most developed economies is the sole responsibility of the private sector (as it is for the food and apparel industries).

 

Strategic CSR argues that for-profit firms are the best hope we have to institute change on the scale and speed necessary to make a difference. I tell my students, if you want to "do good" in the world, join a corporation. So-called social enterprises make us feel good, but are more akin to rearranging the deckchairs on the Titanic.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

Unilever CEO Paul Polman's Plan to Save the World

By Vivienne Walt

February 16, 2017

Fortune

http://fortune.com/2017/02/17/unilever-paul-polman-responsibility-growth/

 

Strategic CSR - GDP

The article in the url below is a great example of why there needs to be more economists engaged in the CSR debate. On the surface, the article is a review of a recent book by David Pilling of the FT, Growth Delusion, that argues against GDP as a measure of national economic wellbeing:

 

"Like most other offerings in this genre, David Pilling's 'The Growth Delusion' celebrates the predicted demise of our headline measure of how well the economy is doing—and along with it the end of Western capitalism's obsession with 'endless' production and consumption."

 

The reviewer rebuts the charge that such weaknesses have been ignored by economists, instead suggesting they are well known:

 

"From the start, prominent critics underlined the failure of GDP to account for the environmental costs of economic growth, a theme struck most forcefully in the 1972 Club of Rome report 'The Limits to Growth.' Less prominently, although no less accurately, feminist scholars highlighted GDP's failure to account for economic value created in the home—which meant that post-1950s GDP and productivity growth statistics were flattered by the new tendency of women to take paid work and purchase items such as microwaves and ready meals. … The people who work with GDP data know, far better than most, how much uncertainty arises from compiling the statistics, seasonally adjusting them and comparing them over time or across countries."

 

The environmental harm of our current economic model is, of course, well documented. There are other interesting questions raised in the review, such as whether there is any measurable improvement in the economy by "merely shifting the economic value of production in the home into the marketplace." The reviewer's point, however, is that it is easy to criticize. The challenge, of course, is coming up with a better measure that serves our economic needs more effectively. And this, according to the reviewer, depends on how you respond to this central question:

 

"Is economic welfare better served by a high level of output and consumption or is it necessary for it to grow?"

 

The reviewer builds the compelling case that, in order to consider dethroning GDP as our primary measure of economic activity, it is important that critics understand what it actually does and why we focus on change in GDP, rather than overall GDP. To this point, the reviewer raises what she thinks is the crux of the debate:

 

"In other words: Why does momentum matter? Portugal and Greece have similar levels of GDP per capita now, but after 2007 Greece had a massive boom and then a bust. Greeks have had the extra interim output, but it is not obvious they have had the better experience. The point about Japan is similar: At its level of prosperity, does it need more growth? Is it terrible to be a rich, contented, safe country, where people have long life expectancy, a magnificent culture and high quality services, simply because the chosen measure of total economic output is static?"

 

The answer to this question is central to understanding what GDP does and is, therefore, a direct critique of the title of the book under review:

 

"The answer lies in the fact that GDP—or any alternative aggregate measure—aims to encapsulate the constant innovation and betterment of life driven by competition in market economies. No single number will do it perfectly. Indeed, a new critique of GDP recently has joined the old ones—namely that it fails to capture the role of new technology in our increasingly digital economies. The concept of GDP, an aggregate measure of output at market prices, does not account for all the value of innovations. Yet over time an increase in GDP is the result of innovation, and so to argue against growth is to argue for an end to innovation. Those who think growth is 'delusional' need to explain what they think should be taken away from people when a new product or service they want comes along, to prevent GDP from growing."

 

In other words, it is not that GDP implies growth when there really is none (i.e., a "Growth Delusion"), but that it captures innovation and creativity in a society. In other words, it captures progress in its widest sense. If progress equals 'value-added,' then an increase in GDP is an imperfect measure of the growth in overall value created. This review acknowledges that GDP is imperfect, but also that it has so far turned out to be the best measure we have of value creation, society-wide. As such, proposed changes should be incremental, based on this core understanding of what GDP is and what it does, rather than the radical reform that is suggested by the book being reviewed, or other high-profile projects, such as the move to measure Gross National Happiness (http://www.grossnationalhappiness.com/).

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

Dismal Statistics

By Diane Coyle

February 5, 2018

The Wall Street Journal

Late Edition – Final

A15

https://www.wsj.com/articles/review-dismal-statistics-1517776813

 

Strategic CSR - Business

Here is an inflammatory quote for you:

 

"When I visit university campuses, I'm periodically asked if students who seek jobs in the business world are immoral, money-grubbing sellouts. I don't think they are, for businesses can be a hugely important force for progress. Can be, but usually aren't."

 

The author continues:

 

"Tycoons always claim to cherish ordinary people's best interests even as they rip them off. American tobacco executives have killed more people than Stalin managed to, and pharma executives recklessly peddling opioids may have killed as many people as Colombian drug lords, yet these business leaders sometimes seem to get moist-eyed describing the work they do."

 

I am a big fan of The New York Times, and Nicholas Kristof, in particular, does wonderful work exposing many of the horrors that humans are capable of inflicting on each other. He has been brilliant, for example, in pursuing those (in politics and business) who allow human trafficking to perpetuate. In this case, however, he is so far off the mark as to be embarrassing. Invoking "Stalin" and "Colombian drug lords" might be a good way of drawing attention to your article, but it is not a particularly level-headed approach to assessing the societal impact of business (all businesses).

 

There is the general point about the extent to which for-profit firms have shaped societal progress in a way that allows us to do so much more today with the same amount of resources. There is the more specific point about tobacco and pharmaceuticals. First, these are legal products that, at some point, society has decided it wants. As such, politicians are just as culpable for any errors as businesses. Second, there is clearly consumer demand. While the role of addiction clearly cannot be dismissed, apparently there are people out there who enjoy smoking, too. And, in terms of opioids, you cannot ignore the benefit these drugs have brought to the management of pain; the medical community has also played a role in over-proscribing drugs that they should have known more about. And, while I am thinking of it, where was the media in exposing this problem much earlier? I am not giving anyone a free ride here; merely pointing out that there is plenty of blame to go around.

 

In the bigger picture, however, it is not reasonable to highlight a couple of major abuses and then tar the whole business community with the same brush. As well as causing major harm, businesses do immense good. More specifically, firms give us what we want. If we want different outcomes, we have to demand them. Consumers do that by paying for what they want, but regulators do that by enforcing laws on their books, and the media does that by holding firms to account (which includes promoting 'good' behavior when they see it). If the collective set of stakeholders fail to do that, or say they want one thing but then incentivize something completely different, the blame lies with all of us (collectively), not an arbitrary organization that, after all, is made up of individuals making decisions. The article in the url below demonstrates that Kristof is so blind to this that it is seriously affecting his judgment. I might even go as far as to say this column borders on being fake news, falling way below the Times' normal high standards.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

Is the Business World All About Greed?

By Nicholas Kristof

January 25, 2018

The New York Times

Late Edition – Final

A26

https://www.nytimes.com/2018/01/24/opinion/davos-corporate-social-impact.html

 

Strategic CSR - Self-interest

The article in the url below reviews a book by Samuel Bowles ('The Moral Economy: Why Good Incentives are No Substitute for Good Citizens,' Yale University Press) that challenges the central tenet of rational economic theory – that the pursuit of self-interest generates optimal societal-level outcomes:

 

"If there is a single dogma that has dominated mainstream economic and political thought since the 18th century, this is it. Samuel Bowles, an economist at the Santa Fe Institute, thinks this dogma is false. In his tightly argued and illuminating book, The Moral Economy: Why Good Incentives are No Substitute for Good Citizens, Bowles makes the case that appeals made to our self-interest can undercut instinctive moral impulses; and that when these impulses are weakened, crucial institutions work sub-optimally, if at all. This is the case even for markets, institutions which the dogma holds up as exemplars of the unique organising power of greed."

In order to make his point, Bowles presents examples of various research studies that show the potentially damaging influence of financial incentives:

 

"Fifteen years ago, the Boston Fire Department ended its policy of unlimited sick days, hoping to curb the flu outbreaks that seemed to happen on Mondays and Fridays. Fire fighters taking more than 15 sick days would have their pay docked. The following year, the number of sick days taken more than doubled. And sick days around the year-end holidays increased by an order of magnitude."

 

The reason offered to explain this phenomenon is that we work for multiple reasons. Of course, we seek financial remuneration, but the work that we do also shapes our identity, which is closely tied to our self-esteem. Belonging to an organization also fulfills our needs as social beings – the value we place on belonging to a group and working towards something that is bigger than ourselves:

 

"The change in sick-day policy replaced a relationship that respected the honour of the firefighters with one that put a price on their obedience. Instead of treating showing up to work over the holidays as a duty, it became something they could buy their way out of. Many decided the price was worth paying."

 

While I agree with all of this as an explanation as to why financial incentives will often produce unintended outcomes, whether this is the same as saying self-interest is not the primary driver of behavior overall seems less clear. My sense is that humans act largely according to their perceived self-interest. A broad definition of 'self-interest' therefore includes the need to build identities that enhance our self-esteem and satisfy our need to belong to a larger group. In other words, it is consistent with our self-interest for us to reject financial incentives when they harm our moral or psychological wellbeing:

 

"Prices crowd out goodwill because they are not just incentives. They convey messages too. In the simplest cases, they can signal that the domain of the incentive is not the proper home for moral concerns."

 

In this way, it is easy to arrive at the conclusion that true altruism does not exist. In other words, people donate to charities or volunteer their time (or work as firefighters) because doing so makes them feel better about themselves – it reinforces their perception of themselves as being the kind of person that helps others. The key seems to me to be the importance of instilling certain values in people at an early age (e.g., good parenting and good education) that builds the need to define an individual's self-interest in terms of the wellbeing of the society in which they are based, rather than in terms of a narrow focus on personal success and material gain.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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

 

 

When greed isn't good

By Robert Armstrong

August 20/21, 2016

Financial Times Weekend, Life & Arts

Late Edition – Final

8

http://www.ft.com/cms/s/0/aba5cc86-652c-11e6-a08a-c7ac04ef00aa.html

 

Strategic CSR - The child in the basement

Good social commentators seek to hold up a mirror to society so we can see what we look like to others. The best ones are able to do it while inviting us in, rather than pushing us away. The goal is to enlist our participation in seeking change, rather than highlighting our weaknesses and moving on. David Brooks of The New York Times is one of my favorite commentators because he does this with good writing and by drawing on a wide source of literary and academic sources. I don't always agree with his columns, but there are a critical mass of them that truly hit home, powerfully. I have written a number of Newsletters that were stimulated by his columns (see here) and my favorite of his columns that speaks directly to my research interests is here. The article in the url below is another good one. The foundation for the column is a short story by Ursula Le Guin ('The Ones Who Walk Away from Omelas') and the center of the story is the child in the basement in the town of Omelas. You'll have to read the column to understand why the child is in the basement, but the central moral decision lies in those who choose to live in Omelas and those who choose not to accept the moral tradeoffs that living in Omelas entails:

 

"That is the social contract in Omelas. One child suffers horribly so that the rest can be happy. If the child were let free or comforted, Omelas would be destroyed. Most people feel horrible for the child, and some parents hold their kids tighter, and then they return to their happiness. But some go to see the child in the room and then keep walking. They don't want to be part of that social contract. 'They leave Omelas; they walk ahead into the darkness and they do not come back.'"

 

In reality, as Brooks notes, the vast majority of us, facing the same tradeoff, choose to live in Omelas:

 

"The story compels readers to ask if they are willing to live according to those contracts. Some are not. They walk away from prosperity, and they make some radical commitment. They would rather work toward some inner purity. The rest of us live with the trade-offs. The story reminds us of the inner numbing this creates. The people who stay in Omelas aren't bad; they just find it easier and easier to live with the misery they depend upon. I've found that this story rivets people because it confronts them with all the tragic compromises built into modern life — all the children in the basements — and, at the same time, it elicits some desire to struggle against bland acceptance of it all."

 

Of course, we can rationalize living in Omelas because we are trying to make the town better. In reality, we all compromise our principles on some level, both collectively and individually, for the benefits that living in Omelas provides:

 

"In another reading, the whole city of Omelas is just different pieces of one person's psychology, a person living in the busy modern world, and that person's idealism and moral sensitivity is the shriveling child locked in the basement."

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

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

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


The Child in the Basement

By David Brooks

January 13, 2015

The New York Times

Late Edition – Final

A23

http://www.nytimes.com/2015/01/13/opinion/david-brooks-the-child-in-the-basement.html

 

Strategic CSR - The Pope

In the aftermath of the publication last year of the Pope's encyclical 'Laudato Si' (Praise Be To You), the majority of the media coverage I saw focused on the Pope's support for the science of climate change. The media took particular delight in noting what a bind this puts those Catholics who deny this science (read right-wing Republicans). Not much of the coverage discussed the implications of the Pope's message in the context of his wider critique of capitalism. The article in the url below, by David Brooks of the NYT, on the other hand, took a different perspective:

 

"Pope Francis is one of the world's most inspiring figures. There are passages in his new encyclical on the environment that beautifully place human beings within the seamless garment of life. And yet over all the encyclical is surprisingly disappointing."

 

Brooks suggests that the Pope's criticism of climate change deniers is really an extension of his critique of capitalism that he expressed in more depth in his earlier encyclical 'Evangelii Gaudium' (The Joy of the Gospel) published in 2013:

 

"Hardest to accept … is the moral premise implied throughout the encyclical: that the only legitimate human relationships are based on compassion, harmony and love, and that arrangements based on self-interest and competition are inherently destructive."

 

In particular:

 

"He is relentlessly negative … when describing institutions in which people compete for political power or economic gain. At one point he links self-interest with violence. He comes out against technological advances that will improve productivity by replacing human work. He specifically condemns market-based mechanisms to solve environmental problems, even though these cap-and-trade programs are up and running in places like California."

 

In contrast, Brooks offers a more honest, and I think inspiring, view of the power of capitalism to deliver social progress:

 

"You would never know from the encyclical that we are living through the greatest reduction in poverty in human history. A raw and rugged capitalism in Asia has led, ironically, to a great expansion of the middle class and great gains in human dignity. You would never know that in many parts of the world, like the United States, the rivers and skies are getting cleaner. The race for riches, ironically, produces the wealth that can be used to clean the environment."

 

The solution, at least as outlined in Strategic CSR, is to harness the creative energy of capitalism and shape it via stakeholder action to produce the behavior from companies that optimizes value creation broadly across society. While the Pope is quick to denounce the failings of capitalism, he is slow to understand the potential upside. Even more important, he misses the opportunity to promote the calling of all stakeholders, which should be to bring their individual values to bear in order to build entrepreneurial and innovative societies that embrace the outcomes the Pope seeks.

 

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/

 

 

Fracking and the Franciscans

By David Brooks

June 23, 2015

The New York Times

Late Edition – Final

A23

http://www.nytimes.com/2015/06/23/opinion/fracking-and-the-franciscans.html