The article in the url link below provides an update on the One Laptop Per Child (OLPC) computer that is being developed by Nicholas Negroponte (http://laptop.org/) and details Intel’s recent decision to abandon the project (Issues: Profit, p200). The acrimonious split comes after a troubled relationship that saw Intel publicly supporting OLPC, while also commercially producing its own competing low cost computer:
“After several years of publicly attacking the XO, Intel reversed itself over the summer and joined the organization's board, agreeing to make an $18 million contribution and begin developing an Intel-based version of the computer. Although Intel made an initial $6 million payment to One Laptop, the partnership was troubled from the outset as Intel sales representatives in the field competed actively against the $200 One Laptop machine by trying to sell a rival computer, a more costly Classmate PC. The Classmate sells for about $350 with an installed version of Microsoft Office, and Intel is selling the machine through an array of sales organizations outside the United States.”
It is hard to know what Intel hopes to achieve by competing with Negroponte, whose actions are purely philanthropic. Even if there is a compelling business case to be made for selling low cost computers in developing countries, Negroponte’s goals largely involve sales to governments in order to provide laptops to the neediest children—not an obvious market foundation on which Intel can build a strong market presence. In such a fight, Intel is always going to lose out in the media arena. This would apply even against someone who is not nearly as media-savy as Negroponte, who, for example, frames Intel’s actions as:
''… a little bit like McDonald's competing with the World Food Program.''
Any time the headline of an article that features a firm is along the lines of “Intel Quits Effort to Get Computers to Children,” that firm is losing the PR battle.
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Intel Quits Effort to Get Computers to Children
By JOHN MARKOFF
1414 words
5 January 2008
The New York Times
Late Edition - Final
3
http://www.nytimes.com/2008/01/05/technology/05laptop.html
Thursday, January 31, 2008
Wednesday, January 30, 2008
Strategic CSR - BP
The article in the url link below presents the conundrum facing oil firms that seek to extract oil from the tar sands in Canada, but have presented themselves as socially responsible (Issues: Brands, p153). With oil prices rising, extracting the oil from these tar sands becomes profitable. Canada’s oil reserves are second only to Saudi Arabia and the country’s friendly and stable business environment is rare in the oil industry:
“Lord Browne of Madingley, who was BP's chief executive until May, sold its remaining Canadian tar sands interests in 1999 and declared as recently as 2004 that there were "tons of opportunities" beyond the sector. But as oil prices hover around the $100-per-barrel mark, Lord Browne's successor, Tony Hayward, announced that BP has entered a joint venture with Husky Energy, … making BP one of the biggest players in tar sands extraction.”
It is clear, however, that the processes used to extract the oil are causing significant environmental damage:
“Producing crude oil from the tar sands -- a heavy mixture of bitumen, water, sand and clay -- … generates up to four times more carbon dioxide, the principal global warming gas, than conventional drilling. The booming oil sands industry will produce 100 million tonnes of CO2 … a year by 2012, ensuring that Canada will miss its emission targets under the Kyoto treaty, according to environmentalist activists. The oil rush is also scarring a wilderness landscape: millions of tonnes of plant life and top soil is scooped away in vast open-pit mines and millions of litres of water are diverted from rivers -- up to five barrels of water are needed to produce a single barrel of crude and the process requires huge amounts of natural gas. … it takes two tonnes of the raw sands to produce a single barrel of oil.”
There are also tales of water pollution and increased medical consequences for nearby populations. Where does responsibility lie here? Greenpeace’s claim that “in the era of climate change it should not be being developed at all” is too flippant. BP’s reply that “These are resources that would have been developed anyway” seems equally unsatisfactory. What is clear is that the economic opportunity is generating:
“… a £50bn "oil rush" as American, Chinese and European investors rush to profit from high oil prices. Despite production costs per barrel of up to £15, compared to £1 per barrel in Saudi Arabia, the Canadian province expects to be pumping five million barrels of crude a day by 2030.”
Surely, the Canadian government is responsible for generating and enforcing environmental legislation in Canada, although the politicians also seek the tax revenues and other benefits that come with a booming industry. Surely, the oil firms have a primary duty to remain in business and obey the law, but many of them also present a public image that implies a concern for the environment over and above merely ‘obeying the law.’
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
The Biggest Global Warming Crime in History
by Cahal Milmo,
The Independent
December 13th, 2007
http://www.corpwatch.org/article.php?id=14858
“Lord Browne of Madingley, who was BP's chief executive until May, sold its remaining Canadian tar sands interests in 1999 and declared as recently as 2004 that there were "tons of opportunities" beyond the sector. But as oil prices hover around the $100-per-barrel mark, Lord Browne's successor, Tony Hayward, announced that BP has entered a joint venture with Husky Energy, … making BP one of the biggest players in tar sands extraction.”
It is clear, however, that the processes used to extract the oil are causing significant environmental damage:
“Producing crude oil from the tar sands -- a heavy mixture of bitumen, water, sand and clay -- … generates up to four times more carbon dioxide, the principal global warming gas, than conventional drilling. The booming oil sands industry will produce 100 million tonnes of CO2 … a year by 2012, ensuring that Canada will miss its emission targets under the Kyoto treaty, according to environmentalist activists. The oil rush is also scarring a wilderness landscape: millions of tonnes of plant life and top soil is scooped away in vast open-pit mines and millions of litres of water are diverted from rivers -- up to five barrels of water are needed to produce a single barrel of crude and the process requires huge amounts of natural gas. … it takes two tonnes of the raw sands to produce a single barrel of oil.”
There are also tales of water pollution and increased medical consequences for nearby populations. Where does responsibility lie here? Greenpeace’s claim that “in the era of climate change it should not be being developed at all” is too flippant. BP’s reply that “These are resources that would have been developed anyway” seems equally unsatisfactory. What is clear is that the economic opportunity is generating:
“… a £50bn "oil rush" as American, Chinese and European investors rush to profit from high oil prices. Despite production costs per barrel of up to £15, compared to £1 per barrel in Saudi Arabia, the Canadian province expects to be pumping five million barrels of crude a day by 2030.”
Surely, the Canadian government is responsible for generating and enforcing environmental legislation in Canada, although the politicians also seek the tax revenues and other benefits that come with a booming industry. Surely, the oil firms have a primary duty to remain in business and obey the law, but many of them also present a public image that implies a concern for the environment over and above merely ‘obeying the law.’
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
The Biggest Global Warming Crime in History
by Cahal Milmo,
The Independent
December 13th, 2007
http://www.corpwatch.org/article.php?id=14858
Tuesday, January 29, 2008
Strategic CSR - Fair Trade
What is interesting about the article in the url link below is not that the Fair Trade coffee company (AMT) lost its license to operate coffee kiosks at London railway stations to a competitor that doesn’t stock any Fair Trade coffee (Issues: Fair Trade, p175). What is interesting about this story is that the reason the firm lost relates back to a strategic decision not to pass on its higher supply chain costs to its customers, which has a direct impact on the firm’s profits. It is not clear whether this is due to a managerial misstep, or whether the firm has no confidence that UK consumers are willing to pay the price premium associated with Fair trade coffee (the article suggests it is the latter, but it would be nice to know now much per cup is involved). Either way, it is not good news for AMT and potentially has implications for the fundamental CSR business model.
For example, it is fine for AMT to say:
“We can sleep at night knowing that the people picking our beans that go in our cups are being looked after – unlike the high street guys who are trying to take over the world.”
But, the reality is that:
“The closures slashed a hefty £6 million off AMT’s £15 million revenue in one fell swoop.”
Firms that differentiate their products on some aspect other than price (i.e., quality, technology, design, etc.) charge a corresponding price premium because, in general, the consumers who buy such products are less price sensitive than consumers who make their purchase decisions based primarily on price. The same laws of economics apply to firms wanting to differentiate their products based primarily on socially responsible products, which often incur a higher cost structure. Due to the awareness surrounding the Fair Trade brand in the UK (“Four-fifths of UK consumers now recognise the Fairtrade brand, according to the Department for Environment, Food and Rural Affairs”) and the likely small increase in price per cup involved, my sense is that UK consumers place a higher importance on CSR issues than most and would be willing to pay the difference. But, that won’t help AMT if the firm goes out of business without testing to see whether or not this is true.
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
UK Fairtrade – Shunted into a siding
The closure of Fairtrade-only coffee kiosks at prime locations in London raises the age-old question of whether the movement can ever beat big business
David Vetter
December 14, 2007
http://www.ethicalcorp.com/content.asp?ContentID=5583
For example, it is fine for AMT to say:
“We can sleep at night knowing that the people picking our beans that go in our cups are being looked after – unlike the high street guys who are trying to take over the world.”
But, the reality is that:
“The closures slashed a hefty £6 million off AMT’s £15 million revenue in one fell swoop.”
Firms that differentiate their products on some aspect other than price (i.e., quality, technology, design, etc.) charge a corresponding price premium because, in general, the consumers who buy such products are less price sensitive than consumers who make their purchase decisions based primarily on price. The same laws of economics apply to firms wanting to differentiate their products based primarily on socially responsible products, which often incur a higher cost structure. Due to the awareness surrounding the Fair Trade brand in the UK (“Four-fifths of UK consumers now recognise the Fairtrade brand, according to the Department for Environment, Food and Rural Affairs”) and the likely small increase in price per cup involved, my sense is that UK consumers place a higher importance on CSR issues than most and would be willing to pay the difference. But, that won’t help AMT if the firm goes out of business without testing to see whether or not this is true.
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
UK Fairtrade – Shunted into a siding
The closure of Fairtrade-only coffee kiosks at prime locations in London raises the age-old question of whether the movement can ever beat big business
David Vetter
December 14, 2007
http://www.ethicalcorp.com/content.asp?ContentID=5583
Monday, January 28, 2008
Strategic CSR - Dr. Hauschka
The article in the url link below provides a brief case-study of a “luxury organic skin-care company” that I hadn’t heard of before (Dr. Hauschka Skin Care) and that places sustainability at the heart of its business model (Issues: Environmental Sustainability, p171):
“"We aim to heal the earth and humanity," Susan, 58, says, pausing as if she's anticipating the skeptical retort, Through $14.50 tubs of lip balm? "Every action that is taken in this business, every intersection between the earth and end user, has a proactive healing impulse behind it." Hauschka's products back up the boast. Its raw ingredients are grown or sourced primarily from biodynamic farms and at fair-trade pricing.”
What is interesting about this article, however, are the steps the founding couple took to protect the sustainability focus of their business model beyond their time in charge:
“In a transaction believed to be unprecedented among U.S. companies, Kurz and her husband legally eliminated their ownership in Hauschka, and then placed the operating company, which is profitable, inside a Massachusetts nonprofit corporation. The result is a novel corporate structure that acts a lot like an irrevocable trust, with one significant exception: It has no trustees or beneficiaries, which means that the Estée Lauders and L'Oréals of the world will find it very difficult to buy Hauschka, ever.”
There is a reasonable amount of debate within the CSR Community regarding the issue of how to protect a firm’s founding values and business model beyond both a certain level of success and the day-to-day presence of the founders. [Note: Marjorie Kelly wrote an excellent article on this point in the summer 2003 issue of Business Ethics Magazine—‘The Legacy Problem,’ pp11-16, http://www.meadowbrooklane.com/business.ethics.legacay.pdf]. Any significant growth in operations presents logistical challenges that often require the skills of professional management expertise (i.e., The Body Shop—Issues: Hypocrisy, p122), while the associated success catches the attention of large suitors wanting to capture specific segments of the market (i.e., Ben & Jerry’s—Issues: Stakeholder Relations, p138). The article in today’s Newsletter (below) presents a unique solution that should appeal both to CSR purists, as well as to those interested in developing an effective business case for CSR:
“Hauschka looks like a nonprofit but isn't one. It makes money, and it pays taxes. It is governed by a four-member board that includes the Kurzes and two WALA representatives. Their charge is to see that the company complies with Hauschka's long-standing mission "to heal." The articles of incorporation prohibit board members from receiving any financial gain for their role, in salary or dividends. They also prohibit the sale of Hauschka's distribution rights. Without owners to collect dividends, all net profits are reinvested in operations, sustaining development.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/
Can't Buy Me Love
How luxury organic skin-care company Dr. Hauschka has infused sustainability into its financial structure.
Fast Company Magazine
From: Issue 121 | December 2007 | Page 60 | By: Carleen Hawn | Photographs By: Ben Stechschulte
http://www.fastcompany.com/magazine/121/cant-buy-me-love.html
“"We aim to heal the earth and humanity," Susan, 58, says, pausing as if she's anticipating the skeptical retort, Through $14.50 tubs of lip balm? "Every action that is taken in this business, every intersection between the earth and end user, has a proactive healing impulse behind it." Hauschka's products back up the boast. Its raw ingredients are grown or sourced primarily from biodynamic farms and at fair-trade pricing.”
What is interesting about this article, however, are the steps the founding couple took to protect the sustainability focus of their business model beyond their time in charge:
“In a transaction believed to be unprecedented among U.S. companies, Kurz and her husband legally eliminated their ownership in Hauschka, and then placed the operating company, which is profitable, inside a Massachusetts nonprofit corporation. The result is a novel corporate structure that acts a lot like an irrevocable trust, with one significant exception: It has no trustees or beneficiaries, which means that the Estée Lauders and L'Oréals of the world will find it very difficult to buy Hauschka, ever.”
There is a reasonable amount of debate within the CSR Community regarding the issue of how to protect a firm’s founding values and business model beyond both a certain level of success and the day-to-day presence of the founders. [Note: Marjorie Kelly wrote an excellent article on this point in the summer 2003 issue of Business Ethics Magazine—‘The Legacy Problem,’ pp11-16, http://www.meadowbrooklane.com/business.ethics.legacay.pdf]. Any significant growth in operations presents logistical challenges that often require the skills of professional management expertise (i.e., The Body Shop—Issues: Hypocrisy, p122), while the associated success catches the attention of large suitors wanting to capture specific segments of the market (i.e., Ben & Jerry’s—Issues: Stakeholder Relations, p138). The article in today’s Newsletter (below) presents a unique solution that should appeal both to CSR purists, as well as to those interested in developing an effective business case for CSR:
“Hauschka looks like a nonprofit but isn't one. It makes money, and it pays taxes. It is governed by a four-member board that includes the Kurzes and two WALA representatives. Their charge is to see that the company complies with Hauschka's long-standing mission "to heal." The articles of incorporation prohibit board members from receiving any financial gain for their role, in salary or dividends. They also prohibit the sale of Hauschka's distribution rights. Without owners to collect dividends, all net profits are reinvested in operations, sustaining development.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/
Can't Buy Me Love
How luxury organic skin-care company Dr. Hauschka has infused sustainability into its financial structure.
Fast Company Magazine
From: Issue 121 | December 2007 | Page 60 | By: Carleen Hawn | Photographs By: Ben Stechschulte
http://www.fastcompany.com/magazine/121/cant-buy-me-love.html
Friday, January 25, 2008
Strategic CSR - Time
This link takes you to a very interesting website called the “World Clock”:
http://www.chippynews.com/worldclock.htm
The description below came from the circular e-mail that was forwarded to me and describes the purpose of the site very well:
“Most clocks are happy just to tell us what time it is. But there are different ways of showing elapsed time, and they are not all chronological. This Web site, which keeps track of nearly every measurement of human progression, is a prime example. If you're a student of statistics, you will have your fill, from the number of traffic accidents since the beginning of 2007, to the number of marriages or divorces for the same period. What makes this site so interesting is that you can see it change before your eyes. Some figures, such as the world population, are in a state of constant change, while others show a much slower increase. Other categories include the number of barrels of oil pumped, cars and computers produced, and the variable temperature of the earth shown in billionths of a degree. If you wish to break down the information into shorter periods, you can view the figures broken down monthly, weekly, daily, and even now (where the counts will start from the moment you click on it).”
Have a good weekend.
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
http://www.chippynews.com/worldclock.htm
The description below came from the circular e-mail that was forwarded to me and describes the purpose of the site very well:
“Most clocks are happy just to tell us what time it is. But there are different ways of showing elapsed time, and they are not all chronological. This Web site, which keeps track of nearly every measurement of human progression, is a prime example. If you're a student of statistics, you will have your fill, from the number of traffic accidents since the beginning of 2007, to the number of marriages or divorces for the same period. What makes this site so interesting is that you can see it change before your eyes. Some figures, such as the world population, are in a state of constant change, while others show a much slower increase. Other categories include the number of barrels of oil pumped, cars and computers produced, and the variable temperature of the earth shown in billionths of a degree. If you wish to break down the information into shorter periods, you can view the figures broken down monthly, weekly, daily, and even now (where the counts will start from the moment you click on it).”
Have a good weekend.
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Thursday, January 24, 2008
Strategic CSR - McDonald's
I had to think for a while about the article in the url below before deciding what I wanted to say about it (Issues: Wages, p204; Special Cases of CSR: Fast-Food Industry, p283; McDonald’s, p295):
“FAST-FOOD chains often post nutritional report cards about their product ingredients on restaurant walls. Now one is using children's report cards to help stimulate sales. The McDonald's restaurants in Seminole County, Fla., and the Seminole County School Board have agreed to reward students for good grades and attendance during the 2007-8 school year with Happy Meals.”
While this effort by McDonald’s seems crass and insensitive to growing concerns about the role fast-food plays in record high obesity among children, there is clearly social value in incentivizing students to work hard at school (presuming they consider a McDonald’s Happy Meal to be an incentive). And, since the ‘reward’ is only one Happy Meal a semester, why should a less-than-healthy, occasional ‘treat’ be such a bad thing (I remember being bribed with ice-cream when I was a child)?
“Students in kindergarten through fifth grade can now receive a Happy Meal from a local McDonald's restaurant as a ''food prize,'' as it is described, for achievements like all A's and B's in academic subjects or two or fewer absences from school.”
This story reminds me of the criticism Cadbury’s received in the UK for encouraging sales of chocolate bars by promising donations of sports equipment to schools (Special Cases of CSR: Cadbury, p297). Having said that, however, McDonald’s took over the sponsorship of the report cards from Pizza Hut that had run the same scheme without complaint for ten years (although their involvement was more subtle and sensitive). Still, something just doesn’t seem right about this, which is why, perhaps, McDonald’s CSR efforts ended up as a case study in the “Companies Persevering Against All The Odds” section of Strategic CSR (Special Cases of CSR: McDonald’s, p305).
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Straight A's, With a Burger as a Prize
By STUART ELLIOTT
1273 words
6 December 2007
The New York Times
Late Edition - Final
4
http://www.nytimes.com/2007/12/06/business/media/06adco.html
“FAST-FOOD chains often post nutritional report cards about their product ingredients on restaurant walls. Now one is using children's report cards to help stimulate sales. The McDonald's restaurants in Seminole County, Fla., and the Seminole County School Board have agreed to reward students for good grades and attendance during the 2007-8 school year with Happy Meals.”
While this effort by McDonald’s seems crass and insensitive to growing concerns about the role fast-food plays in record high obesity among children, there is clearly social value in incentivizing students to work hard at school (presuming they consider a McDonald’s Happy Meal to be an incentive). And, since the ‘reward’ is only one Happy Meal a semester, why should a less-than-healthy, occasional ‘treat’ be such a bad thing (I remember being bribed with ice-cream when I was a child)?
“Students in kindergarten through fifth grade can now receive a Happy Meal from a local McDonald's restaurant as a ''food prize,'' as it is described, for achievements like all A's and B's in academic subjects or two or fewer absences from school.”
This story reminds me of the criticism Cadbury’s received in the UK for encouraging sales of chocolate bars by promising donations of sports equipment to schools (Special Cases of CSR: Cadbury, p297). Having said that, however, McDonald’s took over the sponsorship of the report cards from Pizza Hut that had run the same scheme without complaint for ten years (although their involvement was more subtle and sensitive). Still, something just doesn’t seem right about this, which is why, perhaps, McDonald’s CSR efforts ended up as a case study in the “Companies Persevering Against All The Odds” section of Strategic CSR (Special Cases of CSR: McDonald’s, p305).
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Straight A's, With a Burger as a Prize
By STUART ELLIOTT
1273 words
6 December 2007
The New York Times
Late Edition - Final
4
http://www.nytimes.com/2007/12/06/business/media/06adco.html
Wednesday, January 23, 2008
Strategic CSR - Monsanto
The article in the url link below from BusinessWeek charts Monsanto’s journey from pariah status and potential economic oblivion to a corporate success story today (Issues: Research and Development, p130; Science and Technology, p264; Special Cases of CSR: GM Labeling, p293; Monsanto, p300):
“During the 12 months preceding [the current CEO] Grant's elevation, Monsanto's stock price fell nearly 50% to $8 a share. In 2002, the prior fiscal year, the company lost $1.7 billion. … Fewer than five years later, Monsanto is thriving. The St. Louis company's net income leaped 44% last year, to $993 million, on $8.5 billion in revenue. Monsanto shares, which closed at $104.81 on Dec. 5, have risen more than 1,000% during Grant's tenure.”
The main reason for the firm’s recovery, the article argues, is its decision to switch away from straight-to-market consumer GM foods to seeds that are used to grow key food ingredients for agribusiness, such as “animal feed, ethanol, and corn syrup.” Monsanto’s retreat from foods more likely to stoke consumer fears about the science behind genetic modification has enabled the firm to steer clear of the focus of activist groups and build a commanding market share:
“Today, more than 90% of the genetically modified seeds in the world are sold either by Monsanto or by competitors that license Monsanto genes in their own seeds.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Business Week Online
Insider Newsletter
December 07, 2007
********************
Monsanto: Winning the Ground War
How the company turned the tide in the battle over genetically modified crops
by Brian Hindo
http://newsletters.businessweek.com/c.asp?685460&c55a2ee820194f0f&3
“During the 12 months preceding [the current CEO] Grant's elevation, Monsanto's stock price fell nearly 50% to $8 a share. In 2002, the prior fiscal year, the company lost $1.7 billion. … Fewer than five years later, Monsanto is thriving. The St. Louis company's net income leaped 44% last year, to $993 million, on $8.5 billion in revenue. Monsanto shares, which closed at $104.81 on Dec. 5, have risen more than 1,000% during Grant's tenure.”
The main reason for the firm’s recovery, the article argues, is its decision to switch away from straight-to-market consumer GM foods to seeds that are used to grow key food ingredients for agribusiness, such as “animal feed, ethanol, and corn syrup.” Monsanto’s retreat from foods more likely to stoke consumer fears about the science behind genetic modification has enabled the firm to steer clear of the focus of activist groups and build a commanding market share:
“Today, more than 90% of the genetically modified seeds in the world are sold either by Monsanto or by competitors that license Monsanto genes in their own seeds.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Business Week Online
Insider Newsletter
December 07, 2007
********************
Monsanto: Winning the Ground War
How the company turned the tide in the battle over genetically modified crops
by Brian Hindo
http://newsletters.businessweek.com/c.asp?685460&c55a2ee820194f0f&3
Tuesday, January 22, 2008
Strategic CSR - Greenwash
“Green-wash (green'wash', -wôsh') – verb: the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.”
http://www.terrachoice.com/
The article from the NYT in the url link below summarizes a recent report that makes for interesting reading for anyone interested in the extent to which firms are willing to jump on the CSR bandwagon and mislead consumers in the hope of financial gain (Issues: Advertising, p151; Brands, p153):
“Not everything called ''green'' is going to do much for the environment, according to a report issued this week by a marketing firm, TerraChoice Environmental Marketing (terrachoice.com). Titled ''The Six Sins of Greenwashing,'' the report is based on a study of 1,018 consumer products that make environmental claims. Of those, according to the report, ''all but one made claims that are demonstrably false or that risk misleading intended audiences.''”
The report’s “six sins” include the Sin of the Hidden Trade-off, the Sin of No Proof, the Sin of Vagueness, the Sin of Irrelevance, the Sin of Fibbing, and Sin of the Lesser of Two Evils that, taken together, indicate:
“… both that the individual consumer has been misled and that the potential environmental benefit of his or her purchase has been squandered.”
The full report and definitions of each of the six sins can be accessed at:
http://www.terrachoice.com/Home/Six%20Sins%20of%20Greenwashing
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Being Skeptical of Green
By DAN MITCHELL
663 words
24 November 2007
The New York Times
Late Edition - Final
5
http://www.nytimes.com/2007/11/24/technology/24online.html
http://www.terrachoice.com/
The article from the NYT in the url link below summarizes a recent report that makes for interesting reading for anyone interested in the extent to which firms are willing to jump on the CSR bandwagon and mislead consumers in the hope of financial gain (Issues: Advertising, p151; Brands, p153):
“Not everything called ''green'' is going to do much for the environment, according to a report issued this week by a marketing firm, TerraChoice Environmental Marketing (terrachoice.com). Titled ''The Six Sins of Greenwashing,'' the report is based on a study of 1,018 consumer products that make environmental claims. Of those, according to the report, ''all but one made claims that are demonstrably false or that risk misleading intended audiences.''”
The report’s “six sins” include the Sin of the Hidden Trade-off, the Sin of No Proof, the Sin of Vagueness, the Sin of Irrelevance, the Sin of Fibbing, and Sin of the Lesser of Two Evils that, taken together, indicate:
“… both that the individual consumer has been misled and that the potential environmental benefit of his or her purchase has been squandered.”
The full report and definitions of each of the six sins can be accessed at:
http://www.terrachoice.com/Home/Six%20Sins%20of%20Greenwashing
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Being Skeptical of Green
By DAN MITCHELL
663 words
24 November 2007
The New York Times
Late Edition - Final
5
http://www.nytimes.com/2007/11/24/technology/24online.html
Monday, January 21, 2008
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
“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
Friday, January 18, 2008
Strategic CSR - Social Value
The article in the url link below discusses the issue of the discount rate used in economic forecasting. On the surface, this might not appear to be directly related to CSR, but I think it is highly relevant when we think of what obligation today’s society has to future generations, and how much we should be willing (compelled?) to pay today to minimize the future costs of our current actions. This issue is particularly relevant in terms of dealing with issues such as climate change, but relates also to the broader issue of social value:
“Groucho Marx describes one end of a spectrum of opinion. The only obligation we owe to future generations is to sell them assets to pay our pensions. Sir Nicholas Stern's climate change report takes an opposite view. Governments must value the welfare of all present and future citizens equally and give no special preference to current voters.”
The newspaper coverage in general at the time of the Stern report on climate change identified a number of assumptions the committee had made in the economic analysis that seemed to exaggerate the immediate cost implications of climate change and diminish variables such as the possibility for technical innovation and the greater wealth of future generations. Getting this balance between current and future responsibility/burden ‘right’ is crucial if we are to ensure effective and realizable public policy in response to this hugely important issue:
“If Groucho's position is morally indefensible, Sir Nicholas's is operationally impossible. The problem of weighting the present and the future equally is that there is a lot of future. The number of future generations is potentially so large that small but permanent benefit to them would justify great sacrifice now. If we were to use this criterion to appraise all long-term investment, the volume of such investment would impoverish the current population. No government advocating it would ever be elected. The burden of caring for all humanity, present and future, is greater than even the best-intentioned of us can bear.”
With the huge implications in changes in behavior that will be required by people in both developed and developing countries, it is essential that buy-in is secured as quickly as possible. In order for politicians to act, however, it is essential that there be no obvious personal consequences of their actions (i.e., the danger of them losing their jobs). This is a sad, but realistic position that aims to achieve change, rather than adopting an idealistic position that will never be realized. Walking the tightrope between being sufficiently alarmist to ensure the attention of the world is directed toward the issue of climate change, while not requiring too radical sacrifices in the near future (that are likely to be rejected) is essential for making meaningful progress. This balanced perspective in making public policy decisions is the message I took away from Kay’s article (below):
“Governments cannot be expected to do more, and should not be permitted to do less, than express the concerns their citizens really feel. History illustrates the harm done when the fundamentalism of faith or abstract reasoning overtakes pragmatism as political principle.”
I also think the analogy carries over to the burden placed on firms in relation to their social responsibility. Firms will respond to their consumer needs (in search of profit) more quickly than they will to regulatory coercion (considered an additional cost). Importantly, from both an economic and social value perspective, I am not sure we should expect much else of them. Until firms’ stakeholders (and consumers in particular) re-shape their priorities and demand specific levels of social responsibility, I think it is unrealistic to expect firms to do all the heavy lifting. As a society, we get the politicians for whom we vote and the firms at which we shop.
Have a good weekend.
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Climate change: the (Groucho) Marxist approach.
By JOHN KAY
692 words
28 November 2007
Financial Times
Asia Ed1
Page 11
http://www.ft.com/cms/s/0/e8978fba-9cfb-11dc-af03-0000779fd2ac.html
“Groucho Marx describes one end of a spectrum of opinion. The only obligation we owe to future generations is to sell them assets to pay our pensions. Sir Nicholas Stern's climate change report takes an opposite view. Governments must value the welfare of all present and future citizens equally and give no special preference to current voters.”
The newspaper coverage in general at the time of the Stern report on climate change identified a number of assumptions the committee had made in the economic analysis that seemed to exaggerate the immediate cost implications of climate change and diminish variables such as the possibility for technical innovation and the greater wealth of future generations. Getting this balance between current and future responsibility/burden ‘right’ is crucial if we are to ensure effective and realizable public policy in response to this hugely important issue:
“If Groucho's position is morally indefensible, Sir Nicholas's is operationally impossible. The problem of weighting the present and the future equally is that there is a lot of future. The number of future generations is potentially so large that small but permanent benefit to them would justify great sacrifice now. If we were to use this criterion to appraise all long-term investment, the volume of such investment would impoverish the current population. No government advocating it would ever be elected. The burden of caring for all humanity, present and future, is greater than even the best-intentioned of us can bear.”
With the huge implications in changes in behavior that will be required by people in both developed and developing countries, it is essential that buy-in is secured as quickly as possible. In order for politicians to act, however, it is essential that there be no obvious personal consequences of their actions (i.e., the danger of them losing their jobs). This is a sad, but realistic position that aims to achieve change, rather than adopting an idealistic position that will never be realized. Walking the tightrope between being sufficiently alarmist to ensure the attention of the world is directed toward the issue of climate change, while not requiring too radical sacrifices in the near future (that are likely to be rejected) is essential for making meaningful progress. This balanced perspective in making public policy decisions is the message I took away from Kay’s article (below):
“Governments cannot be expected to do more, and should not be permitted to do less, than express the concerns their citizens really feel. History illustrates the harm done when the fundamentalism of faith or abstract reasoning overtakes pragmatism as political principle.”
I also think the analogy carries over to the burden placed on firms in relation to their social responsibility. Firms will respond to their consumer needs (in search of profit) more quickly than they will to regulatory coercion (considered an additional cost). Importantly, from both an economic and social value perspective, I am not sure we should expect much else of them. Until firms’ stakeholders (and consumers in particular) re-shape their priorities and demand specific levels of social responsibility, I think it is unrealistic to expect firms to do all the heavy lifting. As a society, we get the politicians for whom we vote and the firms at which we shop.
Have a good weekend.
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Climate change: the (Groucho) Marxist approach.
By JOHN KAY
692 words
28 November 2007
Financial Times
Asia Ed1
Page 11
http://www.ft.com/cms/s/0/e8978fba-9cfb-11dc-af03-0000779fd2ac.html
Thursday, January 17, 2008
Strategic CSR - Carbon Emissions
The article in the url link below makes a succinct and convincing case for voluntary carbon emissions reporting by firms (Chapter 1: A Rational Argument for CSR, p17):
“So why are so many companies doing it? In short, because it's always better to know than not to know. If a nationwide carbon market is created in the next few years, as seems likely, businesses that have been tracking and reducing emissions will be favorably positioned. If it comes to regulatory compliance, they'll have a head start. And if green continues to be "the new black," they'll have good PR fodder.”
The article also shows how far this practice has already diffused among large firms in the US:
“Around 60% of the S&P 500 now participates in the CDP's voluntary emissions-disclosure program, and momentum is building.”
More important than all of the reasons to be collecting and analyzing these data presented in the article, however, is the author’s focused cost benefit analysis of the practice (Chapter 1: An Economic Argument for CSR, p18):
“… every business that takes a hard look at carbon emission comes to see it for what it is: gaseous evidence of inefficiency. It costs money to create carbon dioxide, so cutting emissions slashes costs.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/
Carbon Copy
Disclose your greenhouse-gas emissions? Sounds crazy. Why Wal-Mart and P&G are doing it--and you should too.
Fast Company Magazine
From: Issue 121 | December 2007 | Page 78 | By: David Roberts | Illustrations by: Aaron McConomy
http://www.fastcompany.com/magazine/121/carbon-copy.html
“So why are so many companies doing it? In short, because it's always better to know than not to know. If a nationwide carbon market is created in the next few years, as seems likely, businesses that have been tracking and reducing emissions will be favorably positioned. If it comes to regulatory compliance, they'll have a head start. And if green continues to be "the new black," they'll have good PR fodder.”
The article also shows how far this practice has already diffused among large firms in the US:
“Around 60% of the S&P 500 now participates in the CDP's voluntary emissions-disclosure program, and momentum is building.”
More important than all of the reasons to be collecting and analyzing these data presented in the article, however, is the author’s focused cost benefit analysis of the practice (Chapter 1: An Economic Argument for CSR, p18):
“… every business that takes a hard look at carbon emission comes to see it for what it is: gaseous evidence of inefficiency. It costs money to create carbon dioxide, so cutting emissions slashes costs.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/
Carbon Copy
Disclose your greenhouse-gas emissions? Sounds crazy. Why Wal-Mart and P&G are doing it--and you should too.
Fast Company Magazine
From: Issue 121 | December 2007 | Page 78 | By: David Roberts | Illustrations by: Aaron McConomy
http://www.fastcompany.com/magazine/121/carbon-copy.html
Friday, December 14, 2007
Strategic CSR - Sustainability - See you in January!
This will be the last CSR Newsletter until the Spring semester.
Have a great holiday season and I will see you in January!
On reflection, this semester I sent a marked increase in the number of Newsletters focused on environmental sustainability, in general, and climate change, in particular (Issues: Environmental Sustainability, p171). This, no doubt, mirrors the growing public awareness of these issues and, as a result, the greater profile they are given by the media. As such, I will finish this semester's Newsletters with a 20 minute video that focuses on sustainability, although my sense is that it is presented in a 'Michael Moore-type' approach to documentary-making, which is to say it is more polemical than it is objective and scientific. Nevertheless, as with much of Michael Moore's work, it is entertaining and educational, and it makes some very important points:
http://www.storyofstuff.com/index.html
My sense is that the most effective way of achieving the over-arching goal of the video (how to make a linear system more sustainable) lies in maintaining a focus on CSR in its broadest interpretation. In writing Strategic CSR, we originally decided to limit the environmental sustainability content, simply because so much has been written about this subject elsewhere and there were so many other subjects that we wanted to discuss that were not, at the time, central to the CSR debate. One of our main messages, as a result, is that it is the inclusion of all aspects of firm operations that maximizes the strategic advantages of CSR. In the spring, my thought at present is to try and return to this broadest focus. While not ignoring issues of environmental sustainability or recycling or climate change, I will try and rededicate the Newsletters to this issue of system-wide sustainability, as it is only by focusing on the system as a whole that meaningful and lasting change can occur.
As usual, your thoughts and/or feedback are always welcome.
Happy Holidays!
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Thursday, December 13, 2007
Strategic CSR - Supply Chain
The article in the url link below appeared recently in a special insert in the NYT titled ‘Business of Green.’ The supplement focused mostly on the business benefits of environmental sustainability by cutting costs within the firm, but this article extends the sustainability logic into a firm’s supply chain (Issues: Auditing CSR, p94; Country of Origin, p223):
“Call it Phase 3 of the greening of corporate America. Companies have turned to alternative energy, bought hybrid fleets and otherwise tried to clean up their own acts. Many have helped customers go green by stocking green products, selling carbon offsets along with airline tickets or offering electricity from renewable resources for those willing to pay extra. Now they are looking at their supply chain as the next frontier for combating climate change.”
Proactive efforts on in-house sustainability are one thing; setting a high bar and then expecting the same level of commitment from your suppliers is another level of implementation of a social responsibility perspective:
“In September, Wal-Mart announced a pilot program with suppliers of seven common items -- DVDs, toothpaste, soap, milk, beer, vacuum cleaners and soda -- to measure and reduce the amount of energy used in making and distributing them. In marketing and store displays, Home Depot gives preferences to its EcoOptions line of environmentally friendly products, and the company has said it would favor suppliers that came up with a new category of green product, like a recyclable power tool.”
There are a number of interesting questions that emerge from this debate: How many firms are really thinking about this issue at this stage? What are the benefits for those firms that make these demands of their suppliers and what costs to those that do not? And, How far down the supply chain can firms realistically be held responsible for actions over which they have no direct operational control? Most important, perhaps, is ensuring that the demands firms place on their suppliers regarding costs (i.e., as low as possible) do not conflict with expectations regarding sustainability policies, which often involve an upfront investment (CSR Business Plan of Action—Short Term: Awareness Creation: Measurement and Rewards, p71).
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
For Suppliers, the Pressure Is On
By CLAUDIA H. DEUTSCH
1558 words
7 November 2007
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2007/11/07/business/businessspecial3/07Supply.html
“Call it Phase 3 of the greening of corporate America. Companies have turned to alternative energy, bought hybrid fleets and otherwise tried to clean up their own acts. Many have helped customers go green by stocking green products, selling carbon offsets along with airline tickets or offering electricity from renewable resources for those willing to pay extra. Now they are looking at their supply chain as the next frontier for combating climate change.”
Proactive efforts on in-house sustainability are one thing; setting a high bar and then expecting the same level of commitment from your suppliers is another level of implementation of a social responsibility perspective:
“In September, Wal-Mart announced a pilot program with suppliers of seven common items -- DVDs, toothpaste, soap, milk, beer, vacuum cleaners and soda -- to measure and reduce the amount of energy used in making and distributing them. In marketing and store displays, Home Depot gives preferences to its EcoOptions line of environmentally friendly products, and the company has said it would favor suppliers that came up with a new category of green product, like a recyclable power tool.”
There are a number of interesting questions that emerge from this debate: How many firms are really thinking about this issue at this stage? What are the benefits for those firms that make these demands of their suppliers and what costs to those that do not? And, How far down the supply chain can firms realistically be held responsible for actions over which they have no direct operational control? Most important, perhaps, is ensuring that the demands firms place on their suppliers regarding costs (i.e., as low as possible) do not conflict with expectations regarding sustainability policies, which often involve an upfront investment (CSR Business Plan of Action—Short Term: Awareness Creation: Measurement and Rewards, p71).
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
For Suppliers, the Pressure Is On
By CLAUDIA H. DEUTSCH
1558 words
7 November 2007
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2007/11/07/business/businessspecial3/07Supply.html
Wednesday, December 12, 2007
Strategic CSR - P&G
The article in the url link below presents a case study concerning a multi-national’s attempts to move into a new market. In particular, it describes P&G’s efforts to work in developing economies to build a business model to appeal to “Bottom of the Pyramid” consumers (Issues: Profit, p200):
“[P&G] has a goal of increasing total sales by 5% to 7% annually over the next three years. As part of that mission, it is looking to tap roughly one billion additional consumers -- most of them very poor women who live in developing countries.”
The article describes in detail the different challenges a firm like P&G faces and the extent to which it needs to adapt to the new cultural and economic environment—from single portion packaging, to small retail outlets, to different shopping habits (daily, rather than weekly, for example):
“Reaching these customers isn't easy. In emerging markets, P&G estimates that 80% of people buy their wares from mom-and-pop stores no bigger than a closet. … Rather than stock up on full-size goods, which cost more per item, they buy small portions of soap, laundry detergent, and single diapers as they need them -- even though the smaller sizes are usually sold at a premium. … P&G calls such locally owned bodegas, stalls and kiosks "high-frequency stores," because of the multiple times shoppers visit them during a single day or week.”
The article is clear that it is the business model that is driving P&G’s expansion in Mexico, although it is through similar efforts that economic and social progress is also made:
“For P&G the stakes are high. Sales of P&G products in developing markets currently total $20 billion, up from $8 billion five years ago. In recent years, emerging markets have contributed about 40% of the company's "organic" sales growth, which excludes gains from acquisitions. The company still lags other consumer-product rivals. Last year P&G derived 26% of sales in these regions -- a far cry from Unilever and Colgate-Palmolive Co., which manage to snag about 40% of their business in developing markets.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Emerging Ambitions -- P&G's Global Target: Shelves of Tiny Stores --- It Woos Poor Women Buying Single Portions; Mexico's 'Hot Zones'
By Ellen Byron
2229 words
16 July 2007
The Wall Street Journal
A1
http://online.wsj.com/article/SB118454911342967244.html
A freely accessible version of this article can be found at:
http://marketdrivengrowth.blogspot.com/2007/08/p-global-target-shelves-of-tiny-stores.html
“[P&G] has a goal of increasing total sales by 5% to 7% annually over the next three years. As part of that mission, it is looking to tap roughly one billion additional consumers -- most of them very poor women who live in developing countries.”
The article describes in detail the different challenges a firm like P&G faces and the extent to which it needs to adapt to the new cultural and economic environment—from single portion packaging, to small retail outlets, to different shopping habits (daily, rather than weekly, for example):
“Reaching these customers isn't easy. In emerging markets, P&G estimates that 80% of people buy their wares from mom-and-pop stores no bigger than a closet. … Rather than stock up on full-size goods, which cost more per item, they buy small portions of soap, laundry detergent, and single diapers as they need them -- even though the smaller sizes are usually sold at a premium. … P&G calls such locally owned bodegas, stalls and kiosks "high-frequency stores," because of the multiple times shoppers visit them during a single day or week.”
The article is clear that it is the business model that is driving P&G’s expansion in Mexico, although it is through similar efforts that economic and social progress is also made:
“For P&G the stakes are high. Sales of P&G products in developing markets currently total $20 billion, up from $8 billion five years ago. In recent years, emerging markets have contributed about 40% of the company's "organic" sales growth, which excludes gains from acquisitions. The company still lags other consumer-product rivals. Last year P&G derived 26% of sales in these regions -- a far cry from Unilever and Colgate-Palmolive Co., which manage to snag about 40% of their business in developing markets.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Emerging Ambitions -- P&G's Global Target: Shelves of Tiny Stores --- It Woos Poor Women Buying Single Portions; Mexico's 'Hot Zones'
By Ellen Byron
2229 words
16 July 2007
The Wall Street Journal
A1
http://online.wsj.com/article/SB118454911342967244.html
A freely accessible version of this article can be found at:
http://marketdrivengrowth.blogspot.com/2007/08/p-global-target-shelves-of-tiny-stores.html
Tuesday, December 11, 2007
Strategic CSR - Banks
The article in the url below generates contradictory feelings (Issues: Finance, p180; Investing, p184; Loans, p188). At first, when I read it I thought firms were innovatively expanding access to credit to previously excluded segments of the market (a positive). Then I realized that less affluent customers are more likely to use credit heavily and get caught up in cycles of repayment and high interest rates (a negative). It is important, however, to recognize that consumer credit is far more preferable to the “neighborhood loan shops” that can charge “more than 200% annual interest” and having a credit card helps build credit history (positives). But, then I read that such private label cards tend to charge higher interest rates than regular credit cards (negative). In general, however, I like the Citigroup policy:
“Citigroup lets consumers build a credit history with a MasterCard secured with money the consumer puts in a certificate of deposit. After 18 months, consumers deemed creditworthy may be offered a regular Citigroup credit card, and the original deposit, plus interest, is put into the holder's credit-card account. Others can renew the CD or close the account and get the deposit back, with interest.”
And also aspects of the GE plan:
“The issuers say they are treading carefully and tracking payment habits closely, so they aren't saddled with bad loans to nonpaying customers. GE, for example, calls new customers to make sure they understand their bills, interest rates and potential late fees.”
The oversight role played by consumer advocates, discussed in the article, should help keep the banks reasonably honest. Ultimately, I think extending the banking system to serve the huge number of people in the US who do not have either a bank account or access to credit of some sort, providing them with legitimate alternatives to the “neighborhood loan shops,” generates a great deal of social value:
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Private-Label Card Program From GE Offers 'Road to Credit' To Tap Greater Portion of Market
By Kathryn Kranhold and Robin Sidel
1104 words
6 July 2006
The Wall Street Journal
C1
http://online.wsj.com/article/SB115214210537198943.html
A freely accessible version of this article can be found at:
http://www.nabble.com/Article-(07-06-2006):-Private-Label-Card-Program-from-GE-Offers-'Road-to-Credit'-p5210720.html
“Citigroup lets consumers build a credit history with a MasterCard secured with money the consumer puts in a certificate of deposit. After 18 months, consumers deemed creditworthy may be offered a regular Citigroup credit card, and the original deposit, plus interest, is put into the holder's credit-card account. Others can renew the CD or close the account and get the deposit back, with interest.”
And also aspects of the GE plan:
“The issuers say they are treading carefully and tracking payment habits closely, so they aren't saddled with bad loans to nonpaying customers. GE, for example, calls new customers to make sure they understand their bills, interest rates and potential late fees.”
The oversight role played by consumer advocates, discussed in the article, should help keep the banks reasonably honest. Ultimately, I think extending the banking system to serve the huge number of people in the US who do not have either a bank account or access to credit of some sort, providing them with legitimate alternatives to the “neighborhood loan shops,” generates a great deal of social value:
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Private-Label Card Program From GE Offers 'Road to Credit' To Tap Greater Portion of Market
By Kathryn Kranhold and Robin Sidel
1104 words
6 July 2006
The Wall Street Journal
C1
http://online.wsj.com/article/SB115214210537198943.html
A freely accessible version of this article can be found at:
http://www.nabble.com/Article-(07-06-2006):-Private-Label-Card-Program-from-GE-Offers-'Road-to-Credit'-p5210720.html
Monday, December 10, 2007
Strategic CSR - Internet
The article in the url link below highlights the leveling effect that the Internet (Issues: Internet, p237) has had on the free flow of information (Figure 3.4, p56):
“Opponents of a chemical plant being built in the coastal city of Xiamen used cellphone text messaging to distribute widely their warning of dire consequences if the factory opened. … Spreading like a virus, the message was repeated more than 1 million times, environmentalists said, until it had reached practically everyone in Xiamen, a city of 1.5 million people in southeastern China known for its clean air and scenic views.”
This effect still impacts governments more than corporations, but I believe it is a sign of things to come. Firms that overstep societal expectations will face grass-roots campaigns, which are aided significantly by the revolution in communications technology that has occurred over the last 10 to 15 years. There is no reason to suspect that consumers have any less influence on corporate executives than the public has on politicians:
“[In late May], in a move that caught almost everyone by surprise, municipal authorities announced that they were suspending construction of the plant. … Vice Mayor Ding Guoyan was quoted in the official China Daily newspaper as saying, "The city government has listened to the opinions expressed and has decided, after careful consideration, that the project must be re-evaluated."”
Today, NGOs and individuals can communicate their agenda and mobilize like-minded others in ways that were unthinkable only 10 years ago:
“Student protesters who filled Tiananmen Square in 1989 used fax machines to disseminate news about their struggle, leading to a crackdown on the use of faxes. Similarly, the advent of the Internet and e-mail brought a new organizing tool, one still in use despite a massive, and largely successful, government effort to control it. … But cellphones present a new challenge to the government, because all but the poorest people in China own one and text messaging is ubiquitous — used far more often, and by a wider span of ages, than in the U.S., where it tends to be a tool of the young.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Chinese activists turn to cellphones
Authorities in Xiamen, China, halt construction of a factory after text messages spread word of the risks it would pose.
By MITCHELL LANDSBERG
1118 words
1 June 2007
The LA Times
Late Edition – Final
http://globaltechforum.eiu.com/index.asp?layout=rich_story&doc_id=10856&title=Chinese+activists+turn+to+cellphones&categoryid=30&channelid=4
“Opponents of a chemical plant being built in the coastal city of Xiamen used cellphone text messaging to distribute widely their warning of dire consequences if the factory opened. … Spreading like a virus, the message was repeated more than 1 million times, environmentalists said, until it had reached practically everyone in Xiamen, a city of 1.5 million people in southeastern China known for its clean air and scenic views.”
This effect still impacts governments more than corporations, but I believe it is a sign of things to come. Firms that overstep societal expectations will face grass-roots campaigns, which are aided significantly by the revolution in communications technology that has occurred over the last 10 to 15 years. There is no reason to suspect that consumers have any less influence on corporate executives than the public has on politicians:
“[In late May], in a move that caught almost everyone by surprise, municipal authorities announced that they were suspending construction of the plant. … Vice Mayor Ding Guoyan was quoted in the official China Daily newspaper as saying, "The city government has listened to the opinions expressed and has decided, after careful consideration, that the project must be re-evaluated."”
Today, NGOs and individuals can communicate their agenda and mobilize like-minded others in ways that were unthinkable only 10 years ago:
“Student protesters who filled Tiananmen Square in 1989 used fax machines to disseminate news about their struggle, leading to a crackdown on the use of faxes. Similarly, the advent of the Internet and e-mail brought a new organizing tool, one still in use despite a massive, and largely successful, government effort to control it. … But cellphones present a new challenge to the government, because all but the poorest people in China own one and text messaging is ubiquitous — used far more often, and by a wider span of ages, than in the U.S., where it tends to be a tool of the young.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Chinese activists turn to cellphones
Authorities in Xiamen, China, halt construction of a factory after text messages spread word of the risks it would pose.
By MITCHELL LANDSBERG
1118 words
1 June 2007
The LA Times
Late Edition – Final
http://globaltechforum.eiu.com/index.asp?layout=rich_story&doc_id=10856&title=Chinese+activists+turn+to+cellphones&categoryid=30&channelid=4
Friday, December 7, 2007
Strategic CSR - Climate Change
Another report on climate change by a well-intentioned global body (this time the UN Development Program), another insightful (and depressing) comment by Martin Wolf of the FT. I would be in severe infringement of copyright law if I reproduced everything from the article in the url below that I think is important and interesting, so I will leave it to those of you who are interested to read further. The statistics Wolf cites on the complete failure of the Kyoto Treaty are particularly worrying. Needless to say, the overall outlook is bleak:
"In short, if they are to tolerate radical change in energy use, people must first be frightened and then they must be offered a good way out. The truth, moreover, is that this will happen only if the US also takes the lead. No country will deliver radical cuts if the US does not do so, too. No leaps forward in science and technology will occur if the US is not prepared to commit its resources to those ends. The US can no longer wait for a lead from others. Either it takes the lead now or the cause, in all probability, will be lost. Our children and grandchildren will then find out whether it was a real wolf or not."
Have a good weekend.
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
(c) Sage Publications, 2006
http://www.sagepub.com/Werther
Why the climate change wolf is so hard to kill off.
By MARTIN WOLF
1242 words
5 December 2007
Financial Times
Asia Ed1
Page 13
http://us.ft.com/ftgateway/superpage.ft?news_id=fto120420071412536621
"In short, if they are to tolerate radical change in energy use, people must first be frightened and then they must be offered a good way out. The truth, moreover, is that this will happen only if the US also takes the lead. No country will deliver radical cuts if the US does not do so, too. No leaps forward in science and technology will occur if the US is not prepared to commit its resources to those ends. The US can no longer wait for a lead from others. Either it takes the lead now or the cause, in all probability, will be lost. Our children and grandchildren will then find out whether it was a real wolf or not."
Have a good weekend.
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
(c) Sage Publications, 2006
http://www.sagepub.com/Werther
Why the climate change wolf is so hard to kill off.
By MARTIN WOLF
1242 words
5 December 2007
Financial Times
Asia Ed1
Page 13
http://us.ft.com/ftgateway/superpage.ft?news_id=fto120420071412536621
Thursday, December 6, 2007
Strategic CSR - Recycling
I don’t have much to add to the article in the url link below—it speaks for itself. It is an example of a proactive, progressive policy on re-cycling introduced by the city of Seattle that I find hard to believe is not replicated throughout the US (Issues: Environmental Sustainability, p171):
“Seattle now recycles 44 percent of its trash, compared with the national average of around 30 percent, which makes it a major player in big-city waste recovery. Its goal, city waste management officials said, is to reach 60 percent by 2012 and 72 percent by 2025.”
Importantly, according to the article, there is a strong business case to be made for such policies at present re-cycle prices:
“Waste paper is now commanding about $90 a ton throughout the United States, which makes it possible to turn a profit by loading it onto ships instead of dumping it into landfills. Not to sell it ''would be like burying money,'' said Chaz Miller of the Environmental Industry Associations, which represents the private waste service industry.”
Luckily, those who should know are hopeful:
“Jerry Powell, who publishes Resource Recycling magazine, based in Portland, Ore., and is considered one of the nation's experts on the subject, is bullish on the industry's prospects. ''This decade is the best for recycling markets ever,'' Mr. Powell said. ''If you can't make money recycling, you should go elsewhere.'' By his count, more recycling legislation was passed in 2006 than in any year of the previous 10.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Seattle's Recycling Success Is Being Measured in Scraps
By J. MICHAEL KENNEDY
1072 words
10 October 2007
The New York Times
Late Edition - Final
14
http://www.nytimes.com/2007/10/10/us/10recycle.html
“Seattle now recycles 44 percent of its trash, compared with the national average of around 30 percent, which makes it a major player in big-city waste recovery. Its goal, city waste management officials said, is to reach 60 percent by 2012 and 72 percent by 2025.”
Importantly, according to the article, there is a strong business case to be made for such policies at present re-cycle prices:
“Waste paper is now commanding about $90 a ton throughout the United States, which makes it possible to turn a profit by loading it onto ships instead of dumping it into landfills. Not to sell it ''would be like burying money,'' said Chaz Miller of the Environmental Industry Associations, which represents the private waste service industry.”
Luckily, those who should know are hopeful:
“Jerry Powell, who publishes Resource Recycling magazine, based in Portland, Ore., and is considered one of the nation's experts on the subject, is bullish on the industry's prospects. ''This decade is the best for recycling markets ever,'' Mr. Powell said. ''If you can't make money recycling, you should go elsewhere.'' By his count, more recycling legislation was passed in 2006 than in any year of the previous 10.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Seattle's Recycling Success Is Being Measured in Scraps
By J. MICHAEL KENNEDY
1072 words
10 October 2007
The New York Times
Late Edition - Final
14
http://www.nytimes.com/2007/10/10/us/10recycle.html
Wednesday, December 5, 2007
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
“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
Tuesday, December 4, 2007
Strategic CSR - Executives
The article in the url link below is taken from the August edition of Strategy+Business, a magazine produced by the consulting company Booz Allen Hamilton, Inc. The article proposes an interesting idea for a non-profit organization, ‘Executives without Borders,’ that would be modeled on the successful medical non-profit, ‘Medecins Sans Frontieres’:
“Like MSF, Executives Sans Frontières (ESF) would be run by an international board of directors, who would be in charge of recruiting a group of volunteer, adventurous business executives and rotating teams of committed members into regions like the Sahel to help establish businesses and develop untapped markets. Based on their background and expertise, these managers from the developed world’s corporate elite and recent startups would be parachuted in for several months to several years to address such critical issues as transportation of goods, sustainable harvesting, and international trade practices. ESF’s success would be predicated on its ability to locate, mentor, and, in some cases, underwrite local entrepreneurs. The overarching goal would be to teach people to run ventures themselves.”
The idea has much to recommend it and is potentially more effective than the uncoordinated similar actions some firms have already initiated:
“Although some businesses have tinkered with sending salaried consultants to developing countries on pro bono projects, such projects tend to be temporary and focused at the higher levels of government. The ESF, however, would be far more adventurous, appealing to executives’ altruistic instincts while giving them an opportunity to apply real business learning in exciting, uncharted settings. ESF would target mid-career managers with experience, drive, and a sense of joie de vivre. There could also be an opportunity for companies to get involved directly; for example, FedEx might donate 15 employees a year, who would each serve four years with ESF while remaining on FedEx’s payroll.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Executives without Borders
by Jonathan Ledgard
August 14, 2007
A novel proposition for saving driest Africa from total collapse.
http://www.strategy-business.com/li/leadingideas/li00038?
“Like MSF, Executives Sans Frontières (ESF) would be run by an international board of directors, who would be in charge of recruiting a group of volunteer, adventurous business executives and rotating teams of committed members into regions like the Sahel to help establish businesses and develop untapped markets. Based on their background and expertise, these managers from the developed world’s corporate elite and recent startups would be parachuted in for several months to several years to address such critical issues as transportation of goods, sustainable harvesting, and international trade practices. ESF’s success would be predicated on its ability to locate, mentor, and, in some cases, underwrite local entrepreneurs. The overarching goal would be to teach people to run ventures themselves.”
The idea has much to recommend it and is potentially more effective than the uncoordinated similar actions some firms have already initiated:
“Although some businesses have tinkered with sending salaried consultants to developing countries on pro bono projects, such projects tend to be temporary and focused at the higher levels of government. The ESF, however, would be far more adventurous, appealing to executives’ altruistic instincts while giving them an opportunity to apply real business learning in exciting, uncharted settings. ESF would target mid-career managers with experience, drive, and a sense of joie de vivre. There could also be an opportunity for companies to get involved directly; for example, FedEx might donate 15 employees a year, who would each serve four years with ESF while remaining on FedEx’s payroll.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Executives without Borders
by Jonathan Ledgard
August 14, 2007
A novel proposition for saving driest Africa from total collapse.
http://www.strategy-business.com/li/leadingideas/li00038?
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