Strategic CSR - Trees

The article in the url below reports on an encouraging application of science by a U.S.-based nonprofit (World Forest ID) to solve a specific supply chain challenge:

"Scientists are embarking on an effort to keep sanctioned Russian timber out of Europe by mapping the unique chemical fingerprints of trees, a process that could be used to vet corporate supply chains for other banned commodities."

In this case, the technology was used to enforce economic sanctions, but it is a small step to imagine how it could be used to verify the source of other rare and/or protected raw materials:

"The project aims to bring science to bear in a fight by companies and governments to stop illegal wood from seeping into timber supply chains—complex, difficult-to-police networks of logging companies, sawmills, wood manufacturers and traders."

It is encouraging to see that some companies see the potential application:

"Although work on the database is ongoing, furniture giant IKEA has already used it to vet suppliers for sanctioned timber after the war forced it to revamp its supply chain. Belgian authorities have also employed it to seize more than 260 tons of illegally shipped Russian timber."

And, the potential seems clear:

"If scaled up, the project could have broad implications for how companies source a range of other agricultural commodities, such as cotton and cacao, which have been linked to environmental and human rights abuses."

The science, with the aid of artificial intelligence, is logical in its approach:

"World Forest ID currently uses two tests to identify the chemical composition of wood samples. One measures the ratios of stable isotopes, which vary based on factors such as rainfall or temperature. The other test measures trace elements such as magnesium and copper, which vary based on the soils in which trees grow."

The results are encouraging:

"World Forest ID's model identified false origin claims in 40% to 60% of cases. … [Victor Deklerck, World Forest ID's head of science] said the test was designed to be conservative to minimize the chance of incorrectly identifying shipments as illegal."

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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Science Used to Police Banned Russia Timber

By Dylan Tokar

June 11, 2024

The Wall Street Journal

Late Edition – Final

B1, B4

https://www.wsj.com/articles/keeping-sanctioned-russian-timber-out-of-the-eu-is-tricky-this-nonprofit-has-a-solution-1bf366b0

 

Strategic CSR - COP 29

I am interested in scale. It is central to meaningful change, in whatever topic you are discussing. But, it is particularly relevant to the sustainability discussion, partly because of the size of the challenge, but also given the time constraints we are working within.

It is in this light that I saw this quote, from the article in the url below, discussing the effort at COP 29 to generate sufficient financing (from developed to developing economies) to begin tackling climate change worldwide:

"Getting from billions to trillions is a big deal. To give you an idea, one billion minutes will take up just over 1,900 years. One trillion minutes lasts for nearly 2 million years."

No matter how many times I read that, it still blows my mind.

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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COP29: Searching the Seat Cushions

By Siobhan Wagner

November 13, 2024

Bloomberg

https://www.bloomberg.com/news/newsletters/2024-11-13/cop29-searching-the-seat-cushions

 

Strategic CSR - Goalposts

What to do when you face the likelihood you will fail to reach a goal you set yourself only a short while ago? Well, you move the goalposts, of course. Or, at least, that is what you do if you are a large corporation that is having second thoughts about your public commitment to reduce plastic waste, as indicated in the article in the url below:

"In 2020, dozens of major companies joined the U.S. Plastics Pact, signaling a commitment to minimizing plastic waste. Their goals included phasing out plastic straws, cutlery and intentionally-added PFAS, also known as "forever chemicals"; recycling or composting half of their plastic packaging; and making sure 100% of plastic packaging would be reusable, recyclable or compostable—all by 2025."

After all, the companies that signed this pledge are responsible for up to a third of all plastic waste in the U.S.:

"Signatories include major brands like General Mills, Nestlé, Kraft Heinz and Coca-Cola Co., the largest known contributor to global branded plastic waste, according to research published in the journal Science Advances. Retailers like Walmart and Target and packaging and materials suppliers also signed."

While all the companies have reiterated their commitment to reducing plastic waste, of course, the targets will need to wait a little longer:

"Now, with the 2025 deadline close at hand, the U.S. Plastics Pact has published an updated set of objectives. They look a lot like the 2020 goals, with a key difference: Many of the target dates have been pushed back to 2030."

OK, so one reconsideration is understandable. After all, this is difficult stuff, right?

"It is not the first time companies have pushed back timelines for aggressive recycling targets. Coca-Cola and Nestlé both made public promises as far back as 2007 and 2008 that didn't come to fruition, according to the Conservation Law Foundation, an environmental advocacy group."

As always, it is easy to find reasons why we cannot make the progress we need to make. Ultimately, though, we either make the changes we need to, or we do not:

"Today, less than 10% of plastic waste in the U.S. is recycled annually, according to a 2023 report from the National Academy of Sciences. While companies frequently tout pilot projects for plant-based plastics or paper bottles, the problem is expected to get worse in the future. Recent projections have found that plastic waste could triple by 2060, according to the Organization for Economic Cooperation and Development."

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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Companies Push Back Plastic-Waste Goals

By H. Claire Brown

June 11, 2024

The Wall Street Journal

Late Edition – Final

B10

https://www.wsj.com/articles/companies-kick-the-plastic-can-down-the-road-again-f503b8b0

 

Strategic CSR - True costs + prices

The article in the url below introduces the concept of true cost accounting:

"As pricey as a run to the grocery store has become, our grocery bills would be considerably more expensive if environmental costs were included, researchers say. The loss of species as cropland takes over habitat. Groundwater depletion. Greenhouse gases from manure and farm equipment. For years, economists have been developing a system of 'true cost accounting' based on a growing body of evidence about the environmental damage caused by different types of agriculture."

At first glance, I equated this to the lifecycle pricing that is a component of strategic CSR. But, on reading further, the article makes clear that the people at True Price (the Dutch nonprofit the authors worked with to generate the data in the article) do not want to alter prices (by embedding all costs), but instead want to place the 'true cost/price' next to the actual price (as a signal to impact behavior). In other words, they want to charge the current price and advertise the true cost, rather than charging the true price:

"Now, emerging research aims to translate this damage to the planet into dollar figures. By displaying these so-called true prices, sometimes next to retail prices, researchers hope to nudge consumers, businesses, farmers and regulators to factor in the environmental toll of food. The proponents of true cost accounting don't propose raising food prices across the board, but they say that increased awareness of the hidden environmental cost of food could change behavior."

The data is still imperfect, but is more comprehensive than I have seen elsewhere, demonstrating the extent to which costs we incur today are externalized onto future generations. Take beef, for example, where the retail price for 1lb is listed as $5.34, but the "estimated full price" is listed as $27.36 – an "estimated environmental cost" of $22.02 that is currently not being charged.

While I understand why they are proposing this less conflict-ridden approach, and agree the signal will have some effect, I also think the impact of this approach will likely be considerably weaker than directly changing the price.

Take care 

David

David Chandler

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

© Sage Publications, 2023

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

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The Hidden Environmental Costs of Food

By Lydia DePillis, Manuela Andreoni, and Catrin Einhorn

September 19, 2024

The New York Times

https://www.nytimes.com/interactive/2024/09/19/climate/food-costs-protein-environment.html

 

Strategic CSR - Electricity

The article in the url below presents some fascinating graphics about how electricity in the U.S. is made – specifically, what proportion of electricity is generated using coal, natural gas, petroleum, nuclear, wind, and solar. The article starts with the country as a whole, mapping the way electricity generation has evolved over the past two decades:

"Natural gas surpassed coal as the country's top source of power in 2016, and renewables like wind and solar have grown quickly to become major players in the U.S. power system."

The article presents this information in terms of a longitudinal graphic, from 2001 to 2023:

The article contains a similar graphic for each of the country's 50 states, and the variance among states is significant, from Nevada:

"… natural gas became the top source of electricity generation in 2005, earlier than in many other places. More recently, solar power has surged there."

… to Iowa:

"Wind has taken off … over the past two decades, beating out coal in 2019 to become the state's largest source of power generation."

… to Wyoming:

"… where coal still dominates, alternative sources of power have made steady gains."

While the shift to renewables is notable, however, fossil fuels continue to provide the source of the majority of electricity generated in the U.S.:

"[In 2023], coal was the top electricity fuel in 10 states, down from 32 states in 2001. Natural gas largely took over during that time, but wind also emerged as a leading power source across the Midwest."

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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How Does Your State Make Electricity

By Nadja Popovich

August 2, 2024

The New York Times

https://www.nytimes.com/interactive/2024/08/02/climate/electricity-generation-us-states.html

 

Strategic CSR - Culpability

The article from The Economist in the url below captures the "tragedy of the commons" element of the climate change problem very effectively. First, a statement of the obvious:

"The vast majority of readers of The Economist would recoil at the idea of stealing from a poor Malian goatherd or a struggling Bangladeshi farmer. Next to none would countenance murdering such a person. They would feel little differently if they committed these crimes as part of a mob, rendering the responsibility diffuse. Nor would they feel much better if their actions were only likely, but not certain, to do blameless strangers serious harm: they would not scatter landmines in a populated area, for instance."

Second, the author extrapolates the metaphor to incorporate the very real nature of climate change:

"How, then, should we think about readers' (and your correspondent's) responsibility for global warming? Almost every human activity involves some emissions of greenhouse gases. Global warming is already harming the livelihoods of many people, including lots of poverty-stricken goatherds and farmers. At the extremes, the increasing frequency and intensity of droughts, floods, storms and heatwaves brought on by global warming is killing people—a tragedy that will get worse as the planet bakes. Are rich Western consumers thus conniving in theft and murder?"

While establishing individual culpability is challenging (and, perhaps, a red herring), it is real in a very tangible way:

"… during the course of their lives, wealthy Western consumers generate a lot of emissions. Estimates of the damage done vary widely, but none concludes it is insignificant."

Specifically?

"In 2011, John Nolt, a philosopher at the University of Tennessee, estimated that a typical American, born in 1960, would be responsible for enough greenhouse gas emissions over his or her lifetime to cause between one and two deaths. John Broome, another philosopher, things the typical Westerner shortens a human life by six months. Either way, it is a grim thought. And that is only the average. Drive a gas-guzzling car, heat or cool a big house or fly a lot and your rap sheet gets worse."

Happy Halloween, everyone.

David

David Chandler

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

© Sage Publications, 2023

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

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The Green Man's Burden: The Moral Philosophy of Climate Change

December 23, 2023

The Economist

Late Edition – Final

39-41

https://www.economist.com/christmas-specials/2023/12/20/what-responsibilities-do-individuals-have-to-stop-climate-change

 

Strategic CSR - Patagonia

The article in the url below provides some details on the opaque organizing structure that Yvon Chouinard created for Patagonia when he relinquished control of the company, in 2022 (different, but no doubt related, to its decision to restructure as a Benefit Corporation, in 2021; see Strategic CSR – Patagonia). As Chouinard announced at the time (somewhat inaccurately, but still worth reading), "Earth is now our only shareholder." I noted the decision when it became public, but did not understand anything about the scale and potential impact of the decision – something Patagonia deliberately does not advertise and, as illustrated in Chouinard's original statement, left vague:

"Here's how it works: 100% of the company's voting stock transfers to the Patagonia Purpose Trust, created to protect the company's values; and 100% of the nonvoting stock had been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature. The funding will come from Patagonia: Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis."

Right, as clear as mud, which brings us back to the article that is the focus of today's newsletter, which is the first somewhat detailed analysis of how things have been working out, ever since:

"Patagonia, the outdoor apparel brand, is funneling its profits to an array of groups working on everything from dam removal to voter registration. In total, a network of nonprofit organizations linked to the company has distributed more than $71 million since September 2022."

And from, moving forward:

"Patagonia paid an initial $50 million dividend to Holdfast in 2022. It made another payment to Holdfast last year. … Each year going forward, Patagonia will transfer all the profits it does not reinvest in the company to Holdfast."

Given the amount of money that is being distributed, along with the ideological nature of the causes, Hodfast's activity is beginning to attract some attention:

"Holdfast Collective created and manages five nonprofit groups — Holdfast Trust, Chalten Trust, Sojourner Trust, Wilder Trust and Tail Wind Trust. They are registered under a section of the tax code, 501(c)(4), that allows them to make unlimited political donations, provided their primary purpose is social welfare. The nonprofit groups, which pay management fees to Holdfast Collective, hold 98 percent of Patagonia's nonvoting shares. The shares are valued at $1.7 billion but will not be sold."

One of the founding principles of the structure is that it has to distribute all the money it receives from Patagonia, every year, and does not try and carry over any funds. This means they are able to distribute broadly to other organizations deemed sympathetic to the causes Chouinard cares about, even if they don't directly work to sustain the environment:

"And there was a slew of political contributions last cycle, including $100,000 each to Senate Majority PAC and House Majority PAC, which work to elect Democrats to Congress, as well as smaller gifts to groups such as the Black Voters Matter Fund, the Center for American Progress Action Fund and the Georgia Investor Action Fund."

There are lots more details about Holdfast's activities in the article, but I primarily enjoyed learning more about how it came about, and the selfless act by Chouinard to protect what he and his wife had created, for the foreseeable future:

"Because the Chouinards did not sell the company and retain the proceeds or leave the company to their children, they did not face a significant tax bill. And because they donated the shares to 501(c)(4) organizations, they did not receive a substantial tax write off. Instead, the family paid about $17.5 million in taxes to facilitate the transaction in 2022."

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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At Patagonia, Profits Fund Preservation

By David Gelles and Kenneth P. Vogel

February 12, 2024

The New York Times

Late Edition – Final

B1, B2

https://www.nytimes.com/2024/01/30/climate/patagonia-holdfast-philanthropy.html

 

Strategic CSR - Airlines

The article in the url below covers the issue of sustainability in the airline industry and the current U.S. administration's attempts to incentivize the development and widespread use of sustainable aviation fuel (SAF):

"The best thing for the planet would be for everyone — particularly the most frequent flyers, responsible for the majority of emissions — to fly less. Airlines and government officials around the world, though, are vowing that commercial flight can grow while sharply curtailing its climate footprint. Their plans hinge on using vast quantities of sustainable aviation fuel. In the US, the Biden administration and airlines have trumpeted a goal to use 3 billion gallons of SAF by 2030."

Perhaps not surprisingly, the article also notes the reality of how far we are lagging behind that goal:

"The supply of cleaner jet fuel, though, is still only a trickle. US volumes hit 24.5 million gallons last year. That's an uptick from the 2.4 million gallons produced in 2019. But to reach the industry's goal by decade's end, airlines would need to somehow increase SAF consumption by 122-fold."

The chart accompanying the article demonstrates how far off track we currently are:

 

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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

The Airline Industry's Biggest Climate Challenge: A Lack of Clean Fuel

By Ben Elgin

April 11, 2024

Bloomberg

https://www.bloomberg.com/news/articles/2024-04-11/united-british-airways-search-for-sustainable-aviation-fuel-to-reach-net-zero

 

Strategic CSR - Google

The article in the url below is, on the face of it, a step back in Google's environmental performance:

"Google has ended its mass purchase of cheap carbon offsets and thus stopped claiming that its operations are carbon neutral, according to the tech giant's latest environmental report. The company now aims to reach net-zero carbon emissions by 2030. The Alphabet Inc. unit has claimed that it's been carbon neutral in its operations since 2007. The status was based on purchasing carbon offsets to match the volume of emissions that were generated from its buildings, data centers and business travel. But in its latest report, the company states: 'Starting in 2023, we're no longer maintaining operational carbon neutrality.'"

In reality, however, I think it represents a mature step in the way that we think (and talk) about reducing carbon emissions. In other words, it suggests Google is serious about reducing actual emissions, not simply trying to cover up emissions by purchasing ineffective carbon offsets (most of which are symbolic, if not downright fraudulent):

"It's a sign of a company learning to adapt to strengthening sustainability criteria. 'In line with a changing market — including a more robust carbon-removal ecosystem we helped catalyze — we've shifted our strategy,' a Google spokesperson said. 'We aim to avoid or reduce greenhouse-gas emissions to reach our absolute emissions reduction target.'"

In general, the carbon environment is getting tougher for any company that is involved with A.I. (see Strategic CSR – Three Mile Island):

"The changes to its carbon credits purchase strategy have coincided with Google and Big Tech's push on artificial intelligence, which Bloomberg News investigation has shown is extremely resource intensive. As a result, Google's total planet-warming emissions in 2023 are 48% higher than 2019. In that period, its total energy consumption has doubled."

But, this does not dismiss the heightened honesty with recognizing the carbon offset industry for what it is (see Strategic CSR – Carbon offsets):

"The definition of carbon neutral is when an entity balances its planet-warming emissions with techniques that draw down the same amount of carbon dioxide from the air. However, most companies making carbon-neutral claims today rely on cheap offsets — where one credit equals a ton of emissions — that are derived from projects that claim to protect forests or deploy clean energy and avoid the production of emissions. While those are actions that should help the world tackle climate change, experts have found that the purchase of the emissions-avoidance offsets does little to actually reduce emissions. Many deforestation projects exaggerate their claims, while most renewable energy plants would have been built without the small sums raised by the offset purchased. That's why most carbon-neutral claims from companies and products are questionable."

And Google has been a large contributor to the problem, previously:

"In 2022, Google bought nearly 3 million tons of such offsets to counterbalance its direct emissions and business-travel emissions. Though the company did not declare what specific projects those offsets came from, its sustainability report stated that the credits were verified 'under the Climate Action Reserve (CAR), American Carbon Registry (ACR), Verified Carbon Standard (VCS), or the UNFCCC Clean Development Mechanism.'"

This step is much more than a change in tone. It is a significant reassessment of its substantive understanding of the underlying problem:

"After offsets-based claims from companies came under scrutiny, Google stated in a Bloomberg Green story in 2021 that it aimed to reach carbon neutrality without offsets. But now, instead of bulk purchase of emissions-avoidance offsets, Google says it's going to focus on absolute reductions in emissions and buy carbon-removal credits for its residual emissions. These tend to be more expensive, but also have greater chance of verifiably drawing down carbon dioxide from the air."

In other words, a meaningful step forward.

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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Google Is No Longer Claiming to Be Carbon Neutral

By Akshat Rathi

July 8, 2024

Bloomberg

https://www.bloomberg.com/news/articles/2024-07-08/google-is-no-longer-claiming-to-be-carbon-neutral

Strategic CSR - Methane

Among the many reasons to be frustrated with the corporate conversation around ESG (and sustainability, in general) is the disproportionate attention focused on carbon, rather than other greenhouse gasses, such methane, which is so much more damaging in the short term (e.g., see Strategic CSR – Methane). This narrow focus can result in less pressure to set targets and less oversight of performance, even when targets are set:

"The United States' booming fossil-fuel industry continues to emit more and more planet-warming methane into the atmosphere, new research showed, despite a U.S.-led effort to encourage other countries to cut emissions globally."

This is particularly ironic, given the leading role the U.S. played in setting global limits on the emissions of this gas:

"Methane is among the most potent greenhouse gases, and 'one of the worst performers in our study is the U.S., even though it was an instigator of the Global Methane Pledge,' said Antoine Halff, the co-founder of Kayrros, the environmental data company issuing the report."

One reason could be where methane (relative to carbon) is emitted in the supply chain:

"Unlike carbon dioxide, methane emissions don't derive from consumption, but rather from production and transportation of the gas, which is the main component of what is commonly known as natural gas. Methane can leak from storage facilities, pipelines and tankers, and is also often deliberately released. Methane is also released from livestock and landfills, and occurs naturally in wetlands."

The lack of oversight has produced predictable results:

"The concentration of methane in the atmosphere is now more than two-and-a-half times as much as preindustrial levels, and more than half of the world's methane emissions are man-made."

Why methane has remained overlooked, however, is less important than the consequences of it having been so:

"Its presence in the atmosphere dissipates in roughly 12 years, a relatively short span of time, but numerous studies point to its heat-trapping effects as being as much as 80 or more times stronger than carbon dioxide's. That means it can have more immediate consequences for the climate."

What is consistent in the debate (as with most sustainability issues), though, is the degree to which everyone says they are willing to act, but then fails to do so meaningfully:

"In 2021, the United States was among the first signers and promoters of the Global Methane Pledge, which set a target of reducing global, man-made methane emissions by 30 percent from 2020 levels within a decade. The pledge has been signed by 158 countries. '2030 is rapidly approaching, though, and emissions are still being released in huge amounts,' said Mr. Halff. 'This seems in large part because oil and gas production is surging both in the U.S. and elsewhere.'"

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/

Despite a Global Pledge of Reduction, U.S. Emissions of Methane Keep Climbing

By Max Bearak

September 20, 2024

The New York Times

Late Edition – Final

A18

https://www.nytimes.com/2024/09/19/climate/us-methane-greenhouse-gas.html

 

Strategic CSR - Trees

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

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

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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

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

 

Strategic CSR - Three Mile Island

The article in the url below, covering the revival of Three Mile Island (the site of the worst nuclear accident in the U.S.), is interesting for a few reasons. First is that it can be revived at all – I had no idea it was only one reactor that failed – a second one is perfectly usable and had been operating up until a few years ago:

"Three Mile Island's undamaged Unit 1 reactor sits next to Unit 2, which was shut down after a partial core meltdown in 1979 led to five days of panic. The incident heightened awareness of nuclear plants' potential safety problems and contributed to a loss of enthusiasm for the industry that lasted decades. But the 835-megawatt Unit 1 continued operating and closed only under economic pressure five years ago."

 

The issue appears to have been the growing competitive pricing of renewable energy sources:

 

"Years of flat U.S. power demand had created a bruising battle for market share. Nuclear plants had a tough time competing against renewable energy and natural-gas-fired plants that tapped into a cheap source of fuel from the U.S. shale boom."

The second reason is Microsoft's creative decision to fund this revival in the form of an exclusive energy supply:

"Constellation expects to spend around $1.6 billion to restart the reactor by early 2028. Microsoft has signed a 20-year power-purchase agreement with Constellation, the companies said Friday. The deal would help Microsoft pair its 24-7 electricity use with a matching source of nearby clean power generation."

As a related story in Bloomberg noted:

"Microsoft has agreed to purchase the energy for two decades and declined to disclose financial terms. This is the first time Microsoft has secured a dedicated, 100% nuclear facility for its use."

And the third reason is what is driving the demand from Microsoft:

"A deal between Constellation Energy and Microsoft will restart Pennsylvania's Three Mile Island, the site of the country's worst nuclear power accident, to help power the tech giant's growing artificial intelligence ambitions. Under the agreement, Constellation would revive the plant's undamaged reactor, which was too costly to run and closed in 2019, and sell the power to Microsoft. The plan signals the gargantuan amount of power needed for data centers for AI, along with the tech industry's thirst for a carbon-free, round-the-clock electricity source needed to meet climate goals."

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/

Three Mile Island's Rebirth: Microsoft AI power Source

By Jennifer Hiller

September 21-22, 2024

The Wall Street Journal

Late Edition – Final

A1, A9

https://www.wsj.com/business/energy-oil/three-mile-islands-nuclear-plant-to-reopen-help-power-microsofts-ai-centers-aebfb3c8

 

Strategic CSR - Clean tech

The graphic and quotes below were embedded in the April 11, 2024 issue of the Bloomberg Green newsletter, arguing that China's dominance of core technology in the sustainability space is increasing, with rapid investment having "pushed China's share of global production capacity above 80% in 11 clean technology value chain segments." The graphic accompanying the point, generated by BloomberNEF) is compelling:

It is important to note that this is data presented on a selected set of 11 technologies, so is certainly not everything. Nevertheless, the technologies on the list all seem central to any attempt by other countries around the world to develop a more sustainable economy, and with whom many of which China has strained relations (e.g., Strategic CSR – Geopolitics).

Take care

David

David Chandler

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

© Sage Publications, 2023

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

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Strategic CSR - Sweatshops

Ever since we have had greater awareness of the global supply chain, and the low wages that drive it (and underpin the cheap prices we pay in the West for much of our clothing), there has been pressure on fashion firms to pay their contracted workers more. An important point along the way was the Nike sweatshop scandal of the 1990s, but nothing much has changed since, as noted in the article in the url below. What never ceases to amaze me, however, is the scale of the operation required to sustain the mass market fast fashion industry:

"In Bangladesh, the nearly 600,000 people making clothes for Swedish giant H&M—one of the biggest retailers in this space to start talking about paying living wages—earned an average of $119 a month in the first half of 2023, excluding overtime, the latest available data shows. That is well below the $194 living-wage figure for the suburbs of Dhaka, the capital, where clothing factories are clustered, according to the Global Living Wage Coalition, a research and advocacy group whose benchmarks are widely used in the industry."

The implications of these pay levels?

"At those income levels, workers say they have no savings. Often, they borrow from relatives to cover medical expenses or meet unforeseen emergencies. Some months, they even buy food on credit. Frustration over low wages boiled over in October when workers in Bangladesh set factories ablaze and smashed machines in protest."

The article makes the case that firms would like to change that, but are not sure how best to do that:

"[Western fashion companies] generally don't own the factories where their products are made and don't determine pay for workers. They say they don't want to go down the road of imposing specific wage levels on supplier factories. Instead, they have tried other solutions. H&M, for instance, brought Swedish study circles to Bangladesh to train workers in negotiation, experimented with model factories and pushed for more transparent pay structures for workers."

What is required, argue advocates, is exactly the coercive methods the companies are saying they want to avoid:

"What will work … is setting a higher wage level supplier factories must meet and a clear schedule for phasing in those higher wages."

The companies instead advocate for self-sufficiency:

"H&M said it agrees wages are too low in many sourcing markets, but that setting wage levels for suppliers is a 'shortsighted tactic that undermines the role of workers, unions, employers' organizations and governments.' They, and others like Zara-owner Inditex, stress the importance of workers negotiating higher pay for themselves via collective-bargaining agreements, where labor unions hammer out higher wages with employers."

The problem is whether the infrastructure for such agency exists (let alone the training to know how best to self-advocate):

"… in many of the places Western brands buy from, such as China, Vietnam and Bangladesh, independent unions are either banned or repressed. A review of Inditex disclosures shows just 3% of its supplier factories in Asia have collective-bargaining agreements."

The key barrier to progress, of course, is whether the higher costs that lead to higher prices will be supported by customers in the West. In other words, are they willing to pay more for their clothes, so that the workers who made them can be paid something close to what Western consumers say they want them to be paid?

"Part of the problem is low wages are core to fast fashion. It is no coincidence that Bangladesh, the world's second-largest exporter of clothes, is also the place where workers who make clothes earn among the lowest wages of industrial workers anywhere. To sell shorts and shirts cheaply—and increasingly, compete with so-called ultrafast fashion brands like China-founded Shein, known for their rock-bottom prices—clothing giants pressure their suppliers to keep costs down."

The key point:

"Insisting on higher wages would mean paying more for the clothes and potentially putting themselves at a competitive disadvantage if other companies aren't making similar moves."

Which is another way of saying that the companies do not have faith their consumers are willing to pay (even slightly) higher prices to support the working conditions they say they want for these workers:

"German shoemaker Puma said in its 2022 annual report that its factories in Pakistan and Bangladesh—accounting for roughly an eighth of its total products—don't pay a living wage. Even California-based Patagonia, known for its progressive ethos, says that of the 29 factories it bought clothing from, only 10 paid a living wage in 2022."

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/

Fashion Firms Still Wrestle with How to Pay Workers a Living Wage

By Jon Emont

January 4, 2024

The Wall Street Journal

Late Edition – Final

B2

https://www.wsj.com/business/big-fashion-still-hasnt-figured-out-how-to-pay-a-living-wage-3675153f

 

Strategic CSR - Doomsday

The article in the url below is a somewhat dark (humorous?) portrayal of the prospects for humanity, as measured by the Doomsday Clock, which was invented in 1947 by the Bulletin of the Atomic Scientists to highlight the threat posed by nuclear weapons. While nuclear annihilation is perhaps less likely, today, there are other threats that have emerged to rival it:

"The clock was originally designed with a 15-minute range, counting down to midnight — the stroke of doom — and the Bulletin's members move it from time to time in response to current events, which now include threats like climate change and pandemics."

While the minute hand has gone back and forth (mostly forth), it is currently uncomfortably close to midnight:

"A year ago, after Russia invaded Ukraine and brandished the threat of using nuclear weapons, the clock was set to 90 seconds to midnight, the closest it has yet come to The End. The threat of nuclear weapons in Ukraine has diminished since then, but the clock remains poised at 90 seconds before zero."

While this feels perilously close, the author questions whether we are alone in the universe in inventing technologies that could potentially lead to our own destruction:

"Life arose on Earth within half a billion years of its formation, which suggests to hopeful astrobiologists that generating life is easy, at least in microbial form. Maybe intelligence is the hard part."

The author continues to comment on the likelihood that we are not alone in the universe:

"Another theory is that intelligent civilizations, when they do arise, don't long survive their own intelligence, or at least not long enough to make a dent in the cosmos."

What I like is the idea that "generating life is easy, at least in microbial form," which sets the foundation for the author's hopeful conclusion – even if you need a dark sense of humor to fully appreciate it:

"The secret sauce of life is evolution and natural selection, not any particular species. The extinction of a species — dinosaurs, viruses, us — is a loss for the vigor of the world, but it opens realms of possibility for others, new avenues of evolution. With another billion years to go before the sun burns Earth to a crisp, our planet's most interesting life-forms may be yet to come."

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/

Keeping Time With the Doomsday Clock

By Dennis Overbye

February 13, 2024

The New York Times

Late Edition – Final

D3

https://www.nytimes.com/2024/02/12/science/space/atomic-doomsday-clock.html

 

Strategic CSR - Chick-fil-A

The trouble with operating a business along the lines of strict values is that those values sometimes get in the way of commercial success. The article in the url below highlights a particular problem facing Chick-fil-A. As many are aware, Chick-fil-A closes its stores on Sundays. In the middle of a town, this is not a problem in the sense that there are alternatives for those who might otherwise have eaten there. When the Chick-fil-A is the only restaurant in a rest area at the side of a highway, however, it is a problem for people travelling on Sundays, especially given that Sundays is one of the busiest travel days of the week:

"The 27 rest stops that line the 570-mile-long New York Thruway are being systematically renovated now as part of a $450 million private investment plan. … But the developments have left some motorists, like Ms. Bogacz, frustrated and hungry — and now lawmakers in New York have taken up their cause, asking why many of the state's rest stops now feature a restaurant that is famously closed on one of the busiest travel days of the week."

This has become such an issue that New York's politicians are getting involved, asking why the developer would be allowed to give this concession to a restaurant that closes on one of the busiest travel days of the week:

"This month, lawmakers introduced a new bill that would require service area restaurants along the Thruway to open seven days a week. The proposal, like many things involving Chick-fil-A, has set off a minor political firestorm."

The reason is that this move has been interpreted as an attempt by legislators to force Chick-fil-A to compromise its values:

"The lawmakers say they are not targeting Chick-fil-A, which has frequently attracted controversy for the conservative Christian values of its chairman, Dan T. Cathy, who has spoken publicly against same-sex marriage. They just want to keep drivers fed."

After all, those values are entrenched:

"The bill has angered those who believe the lawmakers are trying to force Chick-fil-A to open on Sundays, altering a policy the company has maintained since 1946, according to its website, which allows employees to rest and 'worship if they choose.'"

Alternatively, the other side argues they are not targeting Chick-fil-A or its values:

"The sponsors acknowledged that they were not fans of the chain or its social views. But they said they were more concerned in this case about protecting rest areas as a public good."

Chick-fil-A's values have caused clashes over a long period of time (e.g., see Strategic CSR – Chick-fil-A):

"Headquartered in Georgia, Chick-fil-A has more than 3,000 locations nationwide and is beloved by many. But it has attracted plenty of detractors, too. In recent years, separate proposals to open Chick-fil-A restaurants inside airports in Buffalo and San Antonio were scrapped following public pushback. In 2021, when Applegreen was first awarded the contract, a different group of lawmakers in New York wrote letters to the Thruway Authority and the governor asking them to reconsider including Chick-fil-A in the highway's rest stops in light of the chain's past support of anti-L.G.B.T.Q. causes. ... The company was heavily criticized in the past for donations to groups that sought to stop the legalization of same-sex marriage. But under pressure, the company stopped such donations, and more recently has come under fire from conservatives for its diversity, equity and inclusion efforts."

The bottom line, though, and something I have always admired about Chick-fil-A (even though I do not share the core values around which it operates) is the firm's willingness to adhere to its values, even when it would be more profitable for them to compromise:

"The chain, for example, operates a location inside Mercedes-Benz Stadium, the home of the Atlanta Falcons, that was closed for all eight of the football team's home games this season, which took place on Sundays."

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/

Bright New Rest Stops for Sunday Drive, but Maybe Pack a Lunch

By Andrew Keh

January 2, 2024

The New York Times

Late Edition – Final

A1, A14

https://www.nytimes.com/2023/12/30/nyregion/chick-fil-a-thruway-rest-stop-sundays.html