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Thursday, September 19, 2019

Strategic CSR - Naturalization

You will have no doubt noticed that the tone and level of civility in public discourse has declined notably in recent years. I think the drivers of this shift are complex and largely operate at the societal level. Any particular individual is a symptom of the problem, rather than being any kind of cause. Of course, we can all exacerbate (or salve) divisions and, at some level, have to live with those decisions that we make on a micro level, every day.
This afternoon, I was sworn in as a U.S. citizen. I had been looking forward to the ceremony for several weeks – of course on an individual level, but also as a social scientist.
As expected, it was emotional for many who were there. And, it was quite a group – extremely diverse on every metric you can think of. I remember that, when attending my final interview appointment, the waiting room was like a United Nations gathering. This sense of the world coming together was enhanced at today's ceremony. We were told that, among the 50 people being sworn in, 25 countries were represented. Two thoughts, in particular, came to mind:
First, the event was a very visible (and visceral) demonstration of the extent to which immigration is embedded in this country – central to everything it stands for and will achieve, going forward.
But second, I think the emotion of those being naturalized demonstrates the value of U.S. citizenship to those who come from countries around the world that are, relatively, in a much worse state. Of course, there was relief because a long and complicated process had come to an end, which provides security. But, I think there was also a sense of security (pride?) that comes from belonging to something larger than the individual and that has meaning – an idea or project that represents a greater purpose.
The more I think about this second point, in particular, the more I think that all Americans should witness one of these ceremonies at some point, so they do not lose sight of what this country means to the rest of the world. I would start with those who seem so opposed to immigration (for whatever reason), but I would extend it to everyone in this massive country. John Oliver was very good on this topic last Sunday:
If nothing else, a broader understanding of the immigration process in this country provides common ground that all Americans should be able to support. And, as such, it forms the basis for a little more agreement and a little less conflict.
Take care
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Tuesday, September 17, 2019

Strategic CSR - Prayers

The article in the url below deals with the issue of religious prayer offered on behalf of others, particularly in the aftermath of a public/national crisis of some kind. In particular, it is an attempt by economists to price such prayers for those who may be the object of such divine intervention. Perhaps not surprisingly, the value of someone else's "thoughts and prayers" depended on the beliefs of the person who was asked. Perhaps somewhat surprisingly, however, for some in the study, the value was negative:
"Rather than settling on one price for all, the study found the value of a compassionate gesture depended overwhelmingly on a person's beliefs. While Christian participants were willing to part with money to receive thoughts and prayers from others, the idea made nonbelievers baulk. Instead of shelling out to receive the gestures, on average they were willing to pay to avoid them."
The researchers were trying to understand public reactions to offers of prayer by prominent people (e.g., politicians) following disasters. While many appreciate the sentiment, there are some that are offended and react more viscerally:
"The study … focused on 436 residents of North Carolina, the state most affected by Hurricane Florence last year. The participants were given $5 (£4) 'in support of their hardship' and asked how much, if any, they were willing to exchange to receive thoughts and prayers from strangers, most of whom were recruited over the internet."
As noted above, many certainly valued receiving the thoughts and prayers of others:
"Prayers from a priest were worth $7.17 to the average Christian in need. Prayers from less exalted Christians were valued at $4.36, while mere thoughts from another Christian were cheaper still at $3.27. The researchers used statistical models to estimate prices people would pay above the $5 they had."
Others, however, placed a negative value on the offer:
"Atheists and agnostics, meanwhile, were averse to 'thoughts and prayers.' On average, they were willing to pay a priest $1.66 not to pray for them, and more than twice that, $3.54, to ensure a run-of-the-mill Christian similarly refrained."
I find this all quite amusing and very human. Of course, if you are an atheist, then why would you pay to alter the thoughts of others, which you do not believe have any effect on you or anybody else? The more important point about the paper, however, is that politicians are perceived to be using the offer of "thoughts and prayers" to cover for their unwillingness to act. As one activist seeking to prevent gun violence in the U.S. put it:
"'What we're hearing today at the Capitol and the White House are thoughts and prayers,' he said. 'Your thoughts and prayers aren't going to stop the next shooting. Only action and leadership will do that.'"
Take care
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Economists calculate monetary value of 'thoughts and prayers'
By Ian Sample
September 16, 2019
The Guardian

Thursday, September 12, 2019

Strategic CSR - Carbon Tax

I thought the article in the url below was worth bringing to your attention (it is an open letter), simply because of the people who have signed-onto it:
"Editor's note: This statement is signed by 27 Nobel economic laureates, all four living former chairs of the Federal Reserve, 15 former chairmen of the president's Council of Economic Advisers, and two former Treasury secretaries."
That is quite a group – and, if they can agree on anything, there is hope that the government can, one day, return to the job of legislating. The article opens with this statement:
"Global climate change is a serious problem calling for immediate national action. Guided by sound economic principles, we are united in the following policy recommendations."
It then goes on to list five policies. Here is the first line of each statement:
I. "A carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary."
II. "A carbon tax should increase every year until emissions reductions goals are met and be revenue neutral to avoid debates over the size of government."
III. "A sufficiently robust and gradually rising carbon tax will replace the need for various carbon regulations that are less efficient."
IV. "To prevent carbon leakage and to protect U.S. competitiveness, a border carbon adjustment system should be established."
V. "To maximize the fairness and political viability of a rising carbon tax, all the revenue should be returned directly to U.S. citizens through equal lump-sum rebates."
There are more details to each policy in the article itself, but this is interesting stuff from an impressive group! A more critical response appears in the article in the second url below:
"A carbon tax is not a miracle solution. There aren't any. We will be living with some amount of climate change due to the highly uncertain effects of rising CO2 levels for the foreseeable future. The difference between a happy and unhappy outcome for humanity will come down to our ability to maintain economic progress in the face of our extraordinarily daunting debt challenges."
Perhaps, but this does not discount the fact that a carbon tax is widely acknowledged to be the best tool we have to make rapid progress on reducing the amount of carbon we emit into the atmosphere.
Take care
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Economists' Statement on Carbon Dividends
January 17, 2019
The Wall Street Journal
Late Edition – Final
By Holman W. Jenkins, Jr.
January 19-20, 2019
The Wall Street Journal
Late Edition – Final

Monday, September 9, 2019

Strategic CSR - Oversight

The article in the url below acknowledges how, by some measures, companies today face greater scrutiny than ever before:
"Chief executives are now exposed to all that the digital, connected world can throw at them. Social media provide a torrent of feedback from customers, ranging from the quality of sausages to customers' stance on Chinese intellectual-property laws. Companies' supply chains, whether mines in the Congo or sewing factories in Bangladesh, are watched and documented by activists, who ask difficult questions about pollution and labour conditions that many firms once chose to ignore."
But, the article questions whether this is the 'right' kind of scrutiny. In many ways, firms remain opaque – held to account on superficial metrics, but not sufficiently challenged on the details of day-to-day operations:
"Yet even as those theatrical forms of scrutiny have soared, the other kind [by financial analysts] – methodical, detailed, financial and often dry – is declining. This is harder to spot than grandstanding, but is no less important. People who depend on share prices rising or falling are among the best at holding firms to account. They ask the questions that chief executives find most awkward to answer. The work required to do that can be achingly dry; the best financial analysis is rigorous to the point of rigor mortis. But some information that seeps out serves a wider purpose. An investor might demand that a company's management detail how its underfunded pension pot will impact results in the third quarter, for example."
The article attributes this decline in oversight to two main reasons – first, increased regulation has constrained what executives can or cannot say about their firm, which encourages them "to say as little as possible," especially when pressed or the issue is 'controversial.' And second, the number of the kind of analysts who usually initiate these interrogations ("sell-side analysts") "has tumbled" in recent years as multiple financial crises have highlighted the fact that "they could be prone to conflicts of interest:"
"The biggest firms still get lots of attention, for now. But firms in the FTSE 250 index of mid-sized British companies, have seen coverage dwindle to seven analysts each, down by over a fifth in a decade."
The decline of this detailed oversight (combined with the increase of more superficial 'governance') has consequences – for example, it explains how United Airlines can face a massive online backlash to its less than ideal customer service, yet deliver record profits the next quarter (see Strategic CSR – United and Strategic CSR – United Airlines). A similar story played out for Uber (see Strategic CSR – Uber). Although a large part of strategic CSR focuses on diminishing the role of shareholders in business today, it still recognizes them as an important stakeholder – one of many, but important nonetheless. Detailed oversight of finances and operations is the most important role they can play:
"While the modern firm is constantly interrogated about its conduct and ethics, it is increasingly able to keep its performance under wraps. That makes companies look responsive but in the long run could mean the economy works less well for everyone."
Take care
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One eye open, one eye shut
December 15, 2018
The Economist
Late Edition – Final

Thursday, September 5, 2019

Strategic CSR - Anti-plastic

The article in the url below is useful because it maps out legislation to constrain the use of plastic across the U.S., state-by-state:
"Maine and Vermont just passed statewide bans on plastic bags, while Orlando, Fla., and Palo Alto, Calif., have both pushed through local restrictions on plastics this month."
What does this mean in the aggregate?
"Since the start of 2019, 200 bills related to single-use plastics have been introduced in state legislatures, according to the National Caucus of Environmental Legislators."
The rest of the article focuses on identifying the differences among the various laws and regulations, highlighting areas where they are working and, also, areas where there are problems. I am particularly interested in the unintended consequences of laws passed as a result of good intentions. For example, one benefit of single-use plastics (and the main reason they spread) is hygiene. In applications like medical devices, this can mean life or death, in terms of consumer goods, it has become more convenient than anything else. Either way, there are consequences of eradicating these essential items without finding a comparable alternative:
"Plastic bags help protect people from illnesses brought on by contact with meat or produce, said Grant Kidwell, director of the energy, environment and agriculture task force at the American Legislative Exchange Council. The nonprofit, comprised of conservative state legislators, helped produce a model for pre-emptive legislation prohibiting plastics bans."
I also have sympathy with the argument that we are taking baby steps here. Partly, this is due to the complexity of replacing fossil fuels in our lives, but it is also because we want to convince ourselves we are doing something without having to make any real sacrifices:
"Matt Seaholm, executive director of the American Progressive Bag Alliance, which represents plastic-bag manufacturers and lobbies against bans and fees, said while he is open to having conversations about broader waste-reduction, plastic bags have become a 'low-hanging fruit.'"
Ultimately, the federal system of government in the U.S. means that laws, such as these, that should be uniform throughout the country are, instead, left to each state to decide individually. Add onto that complexity cities and metropolitan areas, which also want a say:
"More city ordinances have helped influence state-level work. At least 414 local ordinances related to plastic bags have been passed in 28 states and Washington, D.C., according to …, a website that tracks these issues."
The result is almost always a more confused, and therefore less effective, approach to something we should be tackling comprehensively and together:
"'If we just continue on this path toward banning everything, you end up with a hodgepodge of local laws that don't work for consumers, don't work for businesses and miss the mark on the environment,' Mr. Seaholm said."
Take care
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Curbs on Plastic Items Take Root in Many States
By Jennifer Calfas
June 24, 2019
The Wall Street Journal
Late Edition – Final

Monday, September 2, 2019

Strategic CSR - Plastics

The article in the url below presents the 'war on plastics' from the perspective of those companies that produce the plastics:
"The backlash against single-use plastic has engulfed straws, bags and takeout containers, but the plastics industry is fighting back, arguing alternatives can be worse for the environment and disruptive for businesses. Trade groups are spending more on lobbying, reaching out to consumers and promoting recycling amid mounting regulation. Their message: Plastic bans target only waste and don't take account of environmental negatives associated with raw materials and the production of alternatives."
What I found interesting were the graphics in the story, which compare the carbon footprint of various alternative types of bags to the single-use plastic bag. For example:
"Cotton bags must be used 131 times for their carbon footprint to drop below that of a single-use plastic bag."
In other words (putting symbolic value aside), if we assume, generously, that cotton shopping bags are used twice a week, then that equates to over two years' worth of consistent use before these bags make more sense than single-use plastic bags. And that presumes the plastic bag is only used once, rather than multiple times, in reality. Similarly, bags made from "more durable plastic" must be used 11 times before they beat the single-use plastic bag, while a paper bag must be used 3 times. In other words, while the article does not gloss over the extent to which plastic pollutes our environment, it also questions whether alternatives are necessarily less polluting. Nevertheless, plastic bags have received a great deal of attention from those focused on imposing specific outcomes:
"A United Nations report shows 127 countries of 192 reviewed had adopted bans or other laws to manage plastic bags as of July. New York recently joined California in passing a state ban on single-use plastic bags. Advocates say bans cut plastic consumption and litter without a significant burden on consumers and businesses."
Firms, of course, might disagree with that last thought – protesting they are often caught in the middle of their various stakeholders, who are pulling them in different directions:
"McDonald's Corp. scrapped plastic straws in the U.K. last year but now faces a backlash. More than 44,000 people recently signed a petition calling for the fast-food chain to bring back plastic straws, complaining that paper replacements go soggy and make it hard to drink milk shakes."
In short, like many aspects of the CSR/sustainability debate, the article demonstrates that working out which outcomes create the optimal social value is complicated.
Take care
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In Plastics War, the Industry Fights Back
By Saabira Chaudhuri
May 21, 2019
The Wall Street Journal
Late Edition – Final

Thursday, August 29, 2019

Strategic CSR - Dementia

Here is a story to brighten your day. The article in the url below reports the opening of a restaurant in Tokyo named the 'Restaurant of Mistaken Orders.' The restaurant was named this way because all the servers are patients dealing with dementia who, as the restaurant acknowledges, may get your order wrong:
"If you've ever been to Japan, you'll know that in Japanese restaurants, mistakes are not made. … But as its name suggests, the Tokyo pop-up Restaurant of Mistaken Orders does things a bit differently. 'You might think it's crazy. A restaurant that can't even get your order right,' says its English introduction page. 'All of our servers are people living with dementia. They may, or may not, get your order right.'"
The restaurant released a video promoting what it does and the purpose behind it:
As you will see if you watch the video, the food is good and the atmosphere is happy and, for the vast majority of customers, if you are worried about getting the wrong order, you are clearly missing the point:
"37% of orders were mistaken, but 99% of customers said they were happy."
Here is a longer version of the video:
Have a good weekend
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The Restaurant of Mistaken Orders: A Tokyo Restaurant Where All the Servers Are People Living with Dementia
By Colin Marshall
August 21, 2019
Open Culture

Tuesday, August 27, 2019

Strategic CSR - Greta

The article in the url below is the best article I have seen about the Swedish teenager, Greta Thunberg, who is campaigning to reverse climate change and, as a result, appears to be changing the world. By starting her no school on Fridays campaign, Greta has shifted the conversation and achieved a significant amount in a very short period. Not many of us can say we had a global impact at 16 years old.
Recognizing this, the article focuses on the consequences of her success in terms of our collective fixation on her (both idolizing her and mean personal attacks) and subjugating her message to the background. While criticizing those who have targeted Greta to serve their own ideological goals (various forms of climate change denial), the author turns the argument on those who say they support the young campaigner:
"However, the uncomfortable question for Thunberg's supporters is whether their virtual canonisation of her has presented a gift to their opponents. Making a young and idealistic teenager the figurehead of a movement makes it too easy to dismiss the campaign as a whole as naive and idealistic. Indeed, the commentator Christopher Caldwell, who is supportive of the cause, worries that the rallying around Thunberg reflects a refusal to engage with complexity. 'People have had enough of balance and perspective,' he wrote in the New York Times, 'They want single-minded devotion to the task at hand.' That is exactly what Thunberg has come to represent."
The author continues with a point that I think is particularly insightful:
"The French philosopher Raphaƫl Enthoven hinted at another problem in a Delphic tweet in which he called her 'an anti-product product' that we use to buy virtue with our support and retweets without actually having to do anything ourselves. Many of those who ostentatiously bid her bon voyage across the Atlantic [recently] are hardly strangers to airports. 'When you consume Greta, you do not help the planet,' wrote Enthoven. 'You play the game of the system that destroys it.'"
This reminds me of the research on moral license – where a minor positive act allows us the liberty to do something much more harmful and negative. For example, you feel good about recycling an aluminum can, which then allows you to ignore the fact that you drive a Ford F-350 truck. Similarly, you personally donate to a worthwhile cause, while working for a company that trades with authoritarian regimes. In other words, believing in Greta and supporting her in superficial ways (e.g., liking one of her social media posts) then allows us to overlook the fact that we have not actually changed anything personally and, as such, are part of the problem:
"Thunberg has been clearer than anyone that it is a mistake to place too much attention on her. 'I think there is a lot of focus on me as an individual and not on the climate itself,' she told the German broadcaster Deutsche Welle. 'I think we should focus more on the climate issue because this is not about me.'"
Greta is clearly wise beyond her years. She is also an example to many of her followers/admirers who need to act rather than merely applaud from the sidelines.
Take care
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Greta Thunberg's attackers are morally bankrupt, but her deification isn't helpful
By Julian Baggini
August 19, 2019
The Guardian

Sunday, August 25, 2019

Strategic CSR - Business Roundtable

A number of you kindly forwarded variations of the article in the url below to me:
"Nearly 200 chief executives, including the leaders of Apple, Pepsi and Walmart, tried on Monday to redefine the role of business in society — and how companies are perceived by an increasingly skeptical public."
Specifically, it is the Business Roundtable making this announcement on behalf of its members:
"Breaking with decades of long-held corporate orthodoxy, the Business Roundtable issued a statement on 'the purpose of a corporation,' arguing that companies should no longer advance only the interests of shareholders. Instead, the group said, they must also invest in their employees, protect the environment and deal fairly and ethically with their suppliers."
My immediate reaction is incredulity – do they mean that they do not understand their firms are already doing this? The stakeholder version of CSR is not either/or so much as it is more/less. In other words, all firms are already doing it; sure, they could be doing more of it, but they are already doing it to some extent. The fact that the Business Roundtable was not able to express itself in this way is shocking and demonstrates the amount of thought they put into the statement ahead of time. As The Wall Street Journal put it in its editorial response to the statement (August 20, 2019, pA14):
"At a practical level this is largely symbolic. … To be successful, any company must serve its customers, adequately reward its employees, cultivate the loyalty of suppliers, and maintain good relations with the communities where it operates. At the Business Roundtable's level of high-toned generality, who could disagree?"
At a deeper level and on reflection, I have a number of reactions to the statement that, in essence, add up to the reason that I wrote my book. In short, I think it is interesting that the Business Roundtable is announcing this change, but it is not very clear that they mean much by it. For a start, the framing is very mainstream. That is, while they pay lip service to the idea of value creation for stakeholders, they fail to demonstrate that they understand how that process actually occurs and that it encompasses 100% of what the firm does.
They also, of course, do not recognize that shareholder primacy is a theory (rather than a legal obligation), yet this is implicit in the statement and central to what they are saying. By announcing they are able to unilaterally shift the purpose of the firm to serving all stakeholders, the Business Roundtable is recognizing that there is currently no legal obligation to maximize shareholder value. If there was a legal obligation, then they couldn't just change it with a white paper policy statement. It would have been helpful if they had explicitly stated this (and it is concerning that they do not appear to make the connection), but the outcome is the same. 

Related to this point, one group whose purpose is undermined by this decision is B-lab, which advocates for Benefit Corporations (hence, B-Lab's somewhat desperate full-page ad response in Sunday's New York Times, As I have long argued, Benefit Corporations are premised on a misunderstanding of the legal relationship between shareholders and the firm. If, according to the Business Roundtable's new announcement, all firms can do what Benefit Corporations can do, why do we need Benefit Corporations?
Overall, therefore, this looks like business as usual to me. It seems as though the Business Roundtable felt like it needed to say this, but it is not quite sure why it is saying it and, by extension, what implications it will/should have for its members. In other words, it is an exercise in impression management, largely driven by growing societal criticism of CEOs/firms/capitalism (take your pick):
"The shift comes at a moment of increasing distress in corporate America, as big companies face mounting global discontent over income inequality, harmful products and poor working conditions."
Rather than take on the (valid) criticisms with an intellectual defense of the value creation process (with a commitment to elevate all stakeholders and demote shareholders because their legal standing is no different), they instead engage in what one of you phrased to me as "all words," with little prospect for substantive action. It is notable, for example, that the Council of Institutional Investors (whose membership overlaps significantly with the Business Roundtable) issued its own response, criticizing the announcement because it "undercuts notions of managerial accountability to shareholders."
Take care
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Shareholder Value is no Longer Everything, Top C.E.O.s Say
By David Gelles and David Yaffe-Bellany
August 19, 2019
The New York Times
Late Edition – Final
A1, A15

Wednesday, August 21, 2019

Strategic CSR - Welcome back!

Welcome back to the Strategic CSR Newsletter!
The first newsletter of the Fall semester is below.
As always, your comments and ideas are welcome.
I am happy to report that the fifth edition of Strategic CSR will be published later this week. The publisher's page for the book is here (including the option to order review copies):
The Instructor resource site and the Student resource site for the book are here:
As always, these Newsletters are archived on my blog, which is fully searchable and intended to be a resource for both instructors and students:
And, if you are interested in a simulation for your course, please see here:
I you have any questions about the fifth edition, Newsletters, simulation (or anything else), please let me know.
Take care

Tuesday, May 14, 2019

Strategic CSR - Facebook

This is the last CSR Newsletter of the Spring semester.
Have a great summer and I will see you in August!
The 5e of Strategic CSR contains a new case-study on the media, in general, and Facebook and related issues, in particular. The article in the url below builds on an earlier Newsletter (Strategic CSR – Facebook) to add an interesting twist:
"Facebook may eventually have more dead users than living ones. If Facebook continues to grow at its current rate, the site could have 4.9 billion deceased members by 2100, according to [new research]. Even if growth had stopped entirely last year, the study finds, Facebook would be looking at about 1.4 billion dead members by 2100. By 2070, in that scenario, the dead would already outnumber the living."
This, of course, raises the interesting question of who owns the data of these people's profiles and pages, filled with their histories, captured in words and photos. The scale of Facebook's success raises the stakes in terms of what to do with these data:
"'Never before in history has such a vast archive of human behavior and culture been assembled in one place.' … 'Controlling this archive will, in a sense, be to control our history.'"
Facebook is aware of this problem and is responding, somewhat:
"As it stands, Facebook users who are alive can choose a 'legacy contact' who gets access to much of the account's data after the original user dies – at which point the account can be 'memorialized.' Others, however, cannot log into it, posing a potential problem if a person dies before designating a legacy contact."
In other words, the issue of real death and virtual life remains a legal and ethical challenge:
"Is it time to appoint social media executors? Should we collect our passwords and include them in our wills? Should our Instagram accounts become part of the historical record?"
Have a great summer.
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Facebook could have 4.9bn dead users by 2100, study finds
By Matthew Cantor
April 24, 2019
The Guardian

Friday, May 10, 2019

Strategic CSR - Dick's + Guns

The article in the url below puts a price on principle. In particular, it reports the estimated cost to Dick's Sporting Goods of its decision last year to stop selling guns in the aftermath of yet another school mass shooting here in the U.S. (this time, in Parkland, FL):
"Last February, when Dick's Sporting Goods boss Ed Stack announced he was restricting gun sales at the country's largest sports retailer, he knew it'd be costly. At the time, Dick's was a major seller of firearms. Guns also drove the sale of soft goods—boots, hats, jackets. What's more, Stack, the retailer's chief executive officer, suspected the position could drive off some of his customers on political principle. He was right. Dick's estimates the policy change cost the company about $150 million in lost sales, an amount equivalent to 1.7 percent of annual revenue. Stack says it was worth it."
It is worth noting that this figure is not a total cost, but one for last year only. In other words, if the company continues not to sell guns, there will be a cumulative effect. Nevertheless, rather than regret his decision, Stack has doubled-down:
"'The system does not work,' Stack said. 'It's important that when you know there's something that's not working, and it's to the detriment of the public, you have to stand up.'"
It turned out that there was a direct connection between Dick's and this particular shooting:
"The 2018 school massacre at Parkland, Florida, touched a nerve for the company. Nikolas Cruz, the shooter, had legally purchased a shotgun from Dick's a few months before the attack. A day after Cruz was arrested, police in Vermont apprehended a teenager with plans to shoot up his high school. He, too, had legally purchased a shotgun from Dick's."
This is a significant cost that Dick's is enduring. In order to justify it, it would be helpful if the firm's stakeholders demonstrated their support (if they truly support the policy). Here, there is some good news and some bad news. In terms of shareholders, there still appears to be broad support for the company;
"The stock price hasn't suffered. Dick's shares, which didn't move much following the announcement last February, have climbed 14 percent in the 13 months since, outpacing the 4 percent rise in the benchmark Russell 3000 Index."
Consumers, it seems, are less committed:
"Some people applauded the CEO's decision and promised to show their appreciation with their business—a phenomenon called 'buycotting'—but those people didn't stick around."
Unfortunately, recent research shows that Dick's (or any other company that stands on principle) may see similar reactions, at least among consumers:
"What happened at Dick's confirms new study results out of Stanford University. Respondents said they were more likely to buy a product to support a CEO's political stance than they were to boycott in disagreement, but their actions revealed the opposite. When asked for specific examples, 69 percent could name a product they'd stopped buying, and only 21 percent could recall a product they started buying."
Or, as Stack puts it:
"Love is fleeting. Hate is forever."
Take care
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Restricting Gun Sales Cost Dick's $150 Million Last Year
By Eben Novy-Williams
March 29, 2019
Bloomberg Businessweek

Tuesday, May 7, 2019

Strategic CSR - Aluminum

In contrast to most of the recycling industry, which is suffering due to the decision by China to stop accepting imports of scrap materials (for example, see Strategic CSR – Recycling and Strategic CSR - Recycling), the article in the url below reports that the trade in recycled aluminum is booming:

"Companies in the U.S. that turn junked cars and beer cans into fresh aluminum are seeing business boom thanks to the trade fight between Washington and Beijing."
While the domestic industry is doing well primarily because the tariffs are driving up the price of imports, it is particularly encouraging to see that the use of recycled aluminum is flourishing:
"Aluminum made from recycled scrap made up the majority of the aluminum used in the U.S. for the first time last year, according to market forecaster Harbor Aluminum Intelligence Unit LLC, which tracks U.S. government reports on aluminum production and scrap usage back to the 1920s."
It appears that this is mostly due to the lack of capacity for virgin aluminum, which is forcing the recycled industry to step up in order to meet growing demand:
"… domestic smelters that make new aluminum from bauxite aren't able to supply more than a fraction of the aluminum consumed, even with higher production last year. Instead, much of the increase in domestic production to offset lower imports has come from the processors that make aluminum from scrap."
What the article doesn't get into, but is more important for long-term trends, is the relative costs of new versus recycled aluminum. Right now, it seems the industry will take whatever aluminum it can get from whatever sources. If the tariffs are removed, however, what does the future hold? Will the industry revert to favoring sources of new aluminum or can the recycling process be made more cost effective to drive further innovation and encourage more recycling?
Take care
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Aluminum Rules the Scrapheap
By Bob Tita
January 17, 2019
The Wall Street Journal
Late Edition – Final

Thursday, May 2, 2019

Strategic CSR - Amazon

The article in the first url below discusses Amazon's announcement last year that it would raise the minimum wage of its employees in the US and UK. In particular, the author argues that, while economics and a tightening labor market no doubt played a role, the primary motivation for the decision was political. That is, in the aftermath of Bernie Sander's Stop BEZOS proposed legislation (and the accompanying publicity around the extent to which Amazon employees rely on state welfare to subsist), the company felt it was advisable to appease the politicians:
"For months, Sanders has been criticizing the company for paying its workers too little. He went so far as to offer a bill called the 'Stop BEZOS Act,' for Jeff Bezos, Amazon's C.E.O. The bill was deeply flawed, but it still served to call more attention to the issue."
As the author notes, "this is how democracy and capitalism are supposed to work." More specifically, it is a great example of stakeholder pressure (government and the media) being brought to bear in a way that forced a change in corporate behavior. While the details of the policies in Sander's bill were problematic (in the sense that they essentially constituted a tax on employment, which might easily have led to a reduction in jobs for the people Sanders was most seeking to help), the problem he raised was real and something that, ultimately, Amazon felt uncomfortable with once it was exposed:
"All of this attention wasn't pleasant for Amazon. It cares about its image. … [Subsequently], Amazon announced that it was raising its minimum hourly pay to $15. About 350,000 workers will receive an immediate raise as a result. Amazon also called on other companies to do the same and said it would lobby Washington to increase the federal minimum wage."
This reflects the extent to which Amazon's higher profile exposes it to greater stakeholder pressure. The article in the second url below, for example, shows how employees (emboldened by action taken in the IT sector in recent months – e.g., Strategic CSR – Google), are beginning to become more aggressive in their demands of their employer:
"This week, more than 4,200 Amazon employees called on the company to rethink how it addresses and contributes to a warming planet. The action is the largest employee-driven movement on climate change to take place in the influential tech industry."
Interestingly, the employees are using a tool IT companies use to tie employees more closely to the firm – stock options:
"Like other shareholders, they can file a resolution urging a particular corporate change that investors vote on at a company's annual meeting. Historically, this approach has been used by outside activist investors, not employees."
As one Amazon employee put it:
"'It's exactly what Amazon has taught me to be: bold, audacious, and tackle big problems,' said Maren Costa, a principal user-experience designer who has been with the company for almost 15 years."
Take care
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Amazon's Surrender is Inspiring
By David Leonhardt
October 3, 2018
The New York Times
Also here:
By Karen Weise
April 11, 2019
The New York Times
Late Edition – Final

Monday, April 29, 2019

Strategic CSR - Seaweed

The article in the url below presents a good idea – replacing single-use plastics with seaweed. In particular, it outlines a plan for the London Marathon this year, which took place Sunday, to hand out seaweed pods filled with liquid for hydration in place of bottled water:
"More than 40,000 people plan to run the marathon on Sunday. And they're in for a bit of a different experience when they reach Mile 23 — Ooho seaweed capsules instead of plastic bottles or cups. The capsules can be filled with a variety of liquids, but the ones provided at the marathon will be filled with Lucozade Sport, an electrolyte drink."
Not only will the pods save plastic, but they are also more convenient for the runners:
"The small pods … are designed to be both edible and biodegradable — the pods themselves are tasteless, and if not consumed, they biodegrade within six weeks."
Apparently, the experience is similar to eating a cherry tomato. Here is what they look like:
There is also a video about the pods here:
The London Marathon says it is committed to advancing sustainability and has a list of actions it is taking to further reduce the marathon's carbon footprint in the article.
Take care
Instructor Teaching and Student Study Site:
Strategic CSR Simulation:
The library of CSR Newsletters are archived at:
Thousands of seaweed pods will replace single-use plastics at the London Marathon
By Sophie Lewis
April 27, 2019
CBS News