The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

To sign-up to receive the CSR Newsletters regularly during the fall and spring academic semesters, e-mail author David Chandler at david.chandler@ucdenver.edu.

Thursday, September 5, 2024

Strategic CSR - Patagonia

Whenever I get down about the prospects for the planet (or, at least, human life on the planet), there is always Patagonia to amaze with their commitment to sustainability (in a very practical sense). As the article in the url below demonstrates, Patagonia continues to push the boundaries in terms of what is possible, in an industry that is known for its excessive levels of waste:

"Starting next year, Patagonia's wetsuits won't just be recycled — they'll be reincarnated. At the company's 'Wetsuit Forge' repair and design center, located a few blocks from the beach in Ventura, California, a first-of-its-kind wetsuit is draped over a table. The suit looks and feels like any other, but it's made in part from used Patagonia wetsuits broken down at a molecular level. It too will be melted down at the end of its life and reborn into a new, lower-carbon wetsuit."

This sounds like not such a big deal, given that lots of items are recycled. But, if you read the detail of the article, what Patagonia has achieved seems (to me, at least) to be both an impressive achievement, and a step forward for the industry, as a whole:

"The prototype is the product of a years-long initiative by Patagonia to eliminate much of the waste that accumulates when a surfer buys a new wetsuit. While the outdoor apparel retailer guarantees a lifetime of repairs for wear and tear, eventually the day comes when the racks of old wetsuits awaiting mending in Ventura can no longer be stitched back together. Some are recycled into yoga mats or tote bags, but inevitably, they all end up buried in landfills. Just how many old Patagonia wetsuits end up as part of $500 reincarnated versions depends on the volume of discarded wetsuits the company collects. But the strategy is ushering in a potentially repeating cycle that would yield the ultimate, immortal wetsuit."

Specifically, the key appears to be one element of the wetsuit, carbon black:

"Despite surfing's one-with-nature vibe, most wetsuits are the sartorial equivalent of an oil spill. They're made from neoprene, a petroleum-based synthetic rubber. (Many wetsuits sold in California even carry a state warning that they can expose you to chemicals known to cause cancer.) Patagonia is collecting end-of-life wetsuits for a partner that vaporizes them to reclaim what's known as carbon black, a key ingredient in neoprene and in the natural rubber Patagonia uses. It's the petroleum-derived element that gives wetsuits their strength and jet-black color. Whether carbon black can be infinitely recovered remains to be scientifically validated, but reusing it keeps old wetsuits out of landfills. The reclaimed material also avoids carbon dioxide emissions from the production of virgin carbon black, a ubiquitous ingredient in tires, plastics, inks and electronics. The material's $19.3 billion market, which is expected to grow 66% by 2032, emits as much as 79 million metric tons of CO2 annually from the combustion of tar oil and other petroleum feedstocks."

Complicated (and impressive) stuff.

Take care
David

David Chandler
© 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/


Patagonia Is Cracking the Code on Endlessly Recylable Wetsuits
By Todd Woody
May 2, 2024
Bloomberg
 
Posted by David Chandler at 4:45 PM

Tuesday, September 3, 2024

Strategic CSR - Chocolate

I have long thought that any research done on consumers' willingness to pay for ethical products suggests that they are not (willing to pay). In general, when presented with two identical items, but plenty of labelling advertising that one of them was made with sweatshop-free labor (and is therefore slightly more expensive) and the other without specific labelling (and is slightly cheaper), that the cheaper version is selected. What is important about the article in the url below, therefore, is that it presents evidence that this is not always the case (or that what had previously been true is changing):

"In April, the British grocery chain Waitrose added a small yellow label to nine of its store-brand chocolate bars. 'Tony's Open Chain: Together, we'll end exploitation in cocoa,' it read."

What is interesting is that the supermarket (Waitrose) did not make a big deal about this, but it seemed to have been noticed by customers:

"The rollout wasn't accompanied by in-store advertising, and press coverage was relatively quiet. The price of the bars rose from 2 British pounds (about $2.50) to £2.20. Still, sales shot up by 43% year over year in the week after the launch, and averaged 34% in the first six weeks."

These results therefore clearly counter what has currently been accepted about consumers' unwillingness to pay for ethically produced products:

"In surveys, consumers frequently express a willingness to pay extra for products they perceive to be sustainable, but actual shopping behavior tells a different story. A 2022 study by the consulting firm BCG found that while 80% of respondents said they cared about sustainability, less than 7% actually paid extra for sustainable products."

One explanation for this is that the product is more of a treat or luxury good, which might mean consumers don't want to feel as guilty as they consume it. Or, it could mean that social mores are shifting and there is growing support for more ethical supply chains. Central to the Strategic CSR framework is the idea that companies and capitalism is neutral – mere tools that we have devised to allocate scare and valuable resources. This means that all organizations merely reflect the collective set of values among all stakeholders. In this case, if consumers are willing to pay more for ethically produced products, then that is what companies will produce, and global supply chains will adapt. The key, if true, is how wide is this effect, and how much of a price premium will consumers be willing to pay?

"It is even less clear how rich a 'sustainability premium' people are willing to pay. Recent research has put the number between roughly 10% and 25%."

On the other hand, given that Waitrose is a higher-end supermarket:

"At Waitrose, customers appeared willing to pay extra for ethical cocoa sourcing—though it is also possible shoppers didn't notice the difference. Inflation, and an attendant preference for store brands, might have played a role."

Take care
David

David Chandler
© 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/


Grocer's Chocolate Sales Soar After It Vows Fair Pay to Farms
By H. Claire Brown
June 4, 2024
The Wall Street Journal
Late Edition – Final
B1, B2

Posted by David Chandler at 11:30 AM

Thursday, August 29, 2024

Strategic CSR - SBTi

Over the summer, I don't know if you caught the backtracking by the Science Based Targets Initiative (SBTi) in terms of carbon credits. The article in the first url below summarizes the surprising policy shift:

"SBTi, whose blessing confers important credibility on corporate net zero plans, appeared to have reversed its stance on a controversial issue. The April 9 press release from its board said companies could use carbon credits to offset so-called Scope 3 emissions from their supply chains, an approach some scientists have warned could jeopardize the fight against global warming."

While staff initially thought the announcement was "a hoax," and removed it from the organization's website, they were shocked to discover it was both real and the result of a lengthy process characterized by conflict-of-interest issues among senior leaders:

"… interviews with current and former employees, as well as other people familiar with the decision, reveal how the seeds of the policy change were sown over the past year. According to them, things started to shift when SBTi went from being a collaboration of three non-governmental organizations and the United Nations to an independent entity governed by a board of trustees that included several people who want to grow the offsets market."

This is concerning because SBTi had become an important voice in the sustainability debate, having "validated the climate plans of more than 5,000 companies, from Apple Inc. to Volkswagen AG":

"SBTi's position has long been that companies should prioritize reducing emissions across their whole supply chain, and only use credits to offset the tiny amount that is impossible to cut. While some experts have lauded that rigorous approach, many corporate figures, and even some climate activists, have berated SBTi for being inflexible and acting as an impediment to helping critical funds reach developing countries."

It is refreshing to see there has been some backlash to this weakening of standards from industry. This is captured in the article in the second url below, which highlights resistance from H&M (a company not exactly known for its sustainability practices, given its role in promoting fast fashion):

"In a letter to the Science Based Targets initiative's board of trustees, Leyla Ertur, H&M's head of sustainability, said the company was concerned about the possibility of companies using carbon offsets to lower their overall carbon emissions by purchasing credits for carbon removal projects, saying that action should be taken by companies within their value chains to reduce greenhouse gas emissions."

Even better, H&M made their argument based on a foundation of the value of science:

"Ertur added that it also would represent a move away from 'a robust scientific foundation and a governance structure that allows for transparent and independent science-based standards, [which] would undermine principles that we believe are fundamental for real climate action.'"

Shortly after this story garnered headlines critical of the organization over the summer, SBTi's CEO resigned.

Take care
David

David Chandler
© 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/


Carbon credit chaos
By Alastair Marsh
May 29, 2024
Bloomberg

H&M Comes Out Against Carbon Offset Plan From Climate Targets Group
By Yusuf Khan
June 15, 2023
The Wall Street Journal
 
Posted by David Chandler at 9:47 AM

Tuesday, August 27, 2024

Strategic CSR - Hot

In case you had not all noticed, it is hot out there. More specifically, as noted in the article in the url below, on July 21, 2024, it was hotter than it has ever been (at least since we started reliably recording temperatures):

"Sunday witnessed the highest average temperature on Earth, breaching a previous record set a year ago, according to provisional data from the European Union's Copernicus Climate Change Service."

The chart accompanying the article presents the data in more dramatic detail:

 


Europe, in particular, is exceeding its normal temperatures for this time of year:


"Global warming is bringing hotter conditions to southern Europe, with temperatures exceeding 40C for the past two weeks in Greece. That's turbo-charging the threat from wildfires. In Greece, there were 33 wildfires in 24 hours through 6:30 p.m. on Monday. Athens and southern parts of the country remain on high alert. Spain and parts of the south of France and Italy are also at risk of wildfires as temperatures there have soared."


I am sure this will not be the last time we break this record, as indicated in the article in the second url below:


"Inflamed by the carbon pollution spewed from burning fossils and farming livestock, the average surface air temperature hit 17.09C (62.76F) on Sunday, according to preliminary data from the Copernicus Climate Change Service, which holds data that stretches back to 1940. … 'What is truly staggering is how large the difference is between the temperature of the last 13 months and the previous temperature records,' said the Copernicus director, Carlo Buontempo. 'We are now in truly uncharted territory – and as the climate keeps warming, we are bound to see new records being broken in future months and years.'"


Take care

David


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

© Sage Publications, 2023


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

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

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



The hottest day ever

By Eamon Farhat and Paul Tugwell

July 23, 2024

Bloomberg

https://www.bloomberg.com/news/articles/2024-07-23/world-records-hottest-day-while-wildfires-threaten-mediterranean


Sunday was world's hottest ever recorded day, data suggests

By Ajit Niranjan

July 23, 2024

The Guardian

https://www.theguardian.com/environment/article/2024/jul/23/world-temperature-records-shattered-hottest-day-climate-crisis

 

Posted by David Chandler at 10:18 AM

Thursday, August 22, 2024

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.
 

It was good to see an estimate for the time it will take EV charging stations to replicate the gasoline station network, from the article in the url below:

"It'll be eight years for fast-charging sites to outnumber gas stations in the US. That's if the current pace of deployment holds. But momentum is only expected to accelerate as the nation builds on the now nearly 9,000 public fast-charging sites."

As of the summer of 2024:

"The US added about 700 new public fast-charging stations for electric cars in the second quarter, bringing the nationwide total to nearly 9,000."

Hope you all have a wonderful semester.
Take care
David

David Chandler
© 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/


US Public EV Chargers Set to Surpass Gas Stations in Eight Years
By Kyle Stock
July 18, 2024
Bloomberg
 
Posted by David Chandler at 9:18 AM

Thursday, May 2, 2024

Strategic CSR - AMZN

 
This is the last CSR Newsletter of the Spring semester.
Have a great summer and I will see you in the Fall!

This video is a fascinating resource for anyone interested in the waste-driven online retail economy we have created – both the reality of e-commerce and its long-term implications:


One of the notable quotes about online returns, most of which end up in a landfill:

"E-commerce results in 25 percent of all goods sold being returned. Brick and mortar is about 7 and a half percent."

Of course, although there is no immediate cost to the consumer of returning an unwanted item, the cost of providing that convenience is built into the system, whether internalized in the price of future items, or externalized in the environmental impact of all that economic activity.

Take care
David

David Chandler
© 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/


Where Online Returns Really End Up And What Amazon Is Doing About It
January 27, 2022
CNBC
 
Posted by David Chandler at 4:51 PM

Tuesday, April 30, 2024

Strategic CSR - Meathead Movers

The article in the url below reveals that, in spite of all the significant problems we currently face, the government sometimes just cannot help but trip over itself (which, of course, The WSJ just loves to highlight). The story focuses on an instance of what the government deems to be age discrimination:

"A moving company shows off the clean-cut, chiseled student athletes who pump iron before loading your furniture. The federal government says that's a problem."

Specifically:

"The Equal Employment Opportunity Commission sued Fresno, Calif.-based Meathead Movers this year for violating age-discrimination law by not hiring enough older workers. Employment attorneys and trade groups say the case will offer clues as to how the agency will approach antidiscrimination laws now that President Biden's picks are installed."

The company is definitely going for a certain look:

"Some Meathead Movers' trucks are stamped with the moniker 'student athlete movers.' Youthful-looking employees pump iron before grabbing furniture, according to a recent social-media advertisement."

It is hard to miss the intention, since it is embedded in the company's name, and they are proud to double-down on the brand:

"Employees compete in the Meathead Olympics in which they compete to assemble and leap over boxes. Numerous corporate Facebook posts show workers flexing with biceps bulging. Employees, dubbed 'Meatheads,' must jog from truck to house when not carrying furniture. The Meathead Movers Invitational is a company-sponsored wrestling tournament."

In its defense, the company argues that it is just good marketing and, anyway, older people do not want to do a job that involves constantly lifting heavy things:

"Meathead Movers executives say that the company is providing good jobs and quality services to the community and that it isn't discriminating against anyone—older workers just don't want to carry chests downstairs."

My understanding of this area of employment law is that, if there is a physical requirement that necessitates a certain physical characteristic (e.g., flight attendants cannot be too large as they potentially need to work in close confines in emergency situations), then requiring those characteristics is not illegal. Being willing to carry heavy things seems like it would be central to working for a moving company:

"Many of the EEOC's allegations against Meathead focus on marketing and hiring practices that could discourage older workers from applying. Current employees are asked to scour local gyms, colleges and places where they would hang out normally for new hires, according to the EEOC. Discouragement bias can be present in job ads, marketing materials and job application questions, such as asking about a student's class schedule, the agency said."

And, of course, once the lawyers get involved, all kinds of rational points are used to motivate the arguments on both sides:

"Advocates for older Americans applaud the EEOC's focus. 'Dwayne 'The Rock' Johnson is over 50. I'm pretty sure he would be good at moving boxes,' said Bill Alvarado Rivera, senior vice president for litigation at AARP, an association for the rights of older people. 'That kind of stereotype about who could be a good mover has no place in an economy that values individuals.'"

While advocates against government intervention are producing the kind of circular logic that only comes from legal advice:

"Others disagreed, saying that antidiscrimination lawsuits could hurt the types of workers they are trying to protect. Walter Olson, a senior fellow at the libertarian think tank Cato Institute, said age-related lawsuits could make companies less likely to hire older workers because they are a liability risk. 'It is the most counterproductive of all the major areas of discrimination law,' he said. 'It makes them less employable late in their careers because they are known as litigation dangers.'"

You would think we enjoy arguing just for the sake of arguing. The bigger issue, of course, is whether this is a productive use of government resources. My sense is that we have more pressing problems (than Meathead Movers' employment policies) that might require more urgent attention.

Take care
David

David Chandler
© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


A Moving Company Touts Its Young, Chiseled Workers. Feds Say That's Age Discrimination
By Austen Hufford
December 9, 2023
The Wall Street Journal
Late Edition – Final
 
Posted by David Chandler at 2:31 PM

Thursday, April 25, 2024

Strategic CSR - Air

I found this quote from the article in the url, below, shocking:

"The average person can go up to two months without food, three days without water, but only a few minutes without air. Breathable air is essential to life. Yet a new analysis found that last year, only 10 countries and 9% of global cities had air quality that met World Health Organization guidelines for harmful fine-particle, or PM2.5, pollution."

To be clear, what is shocking is not that air matters, of course, but that so few countries have what the WHO considers to be an acceptable minimum quality.

Take care
David

David Chandler
© 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/


Only 10 Countries Had Healthy Air Quality in 2023, Report Find
By Kendra Pierre-Louis
March 18, 2024
Bloomberg
 
Posted by David Chandler at 7:14 AM

Tuesday, April 23, 2024

Strategic CSR - Bitcoin

I knew that Bitcoin mining was unsustainable due to the amount of electricity that it used; what I had not realized is that the same criticism can be levelled due to the amount of water used in the same process:

"Bitcoin-mining operations slurp up billions of gallons of water globally each year.  Estimates vary, but the annual footprint is projected to surpass 591 billion gallons of water this year, according to an article published last week in the peer-reviewed journal Cell Reports Sustainability."

How much is 591 billion gallons of water?

"For comparison, New York City residents and businesses consumed 403 billion gallons in 2022, according to the U.S. Geological Survey."

The water use also adds to the energy use:

"Miners use water directly to cool their computer servers and indirectly by running both computers and air conditioning systems powered by gas- and coal-fired power plants that require cooling water. Some of the cooling water used by power plants evaporates and is no longer available for anything else."

The reason so many resources are required?

"Bitcoin mining requires massive amounts of energy. During mining, computers generate random numbers in hope of getting the correct one required to unlock fresh bitcoin. The greater the computing power, the higher the chance that a company or individual running a mining operation can harvest new bitcoins."

Another complication is that any changes would have to be approved by all Bitcoin owners, which makes any kind of change challenging:

"Bitcoin could change its software to require fewer calculations to mine its currency, significantly reducing its need for both electricity and cooling water, according to Paolo Natali, principal at the Rocky Mountain Institute, a nonprofit environmental research and consulting organization. But since bitcoin isn't owned by a single company, that change would require nearly all of the parties involved in its maintenance to agree on a change."

Take care
David

David Chandler
© 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/


Bitcoin Mining Fuels Concern Over Water Use
By Eric Niiler
December 13, 2023
The Wall Street Journal
Late Edition – Final
A3

Posted by David Chandler at 4:50 PM

Thursday, April 18, 2024

Strategic CSR - BlackRock

A picture can tell a thousand words – specifically, a graph from the article in the url below about how BlackRock CEO, Larry Fink, has stopped publicly using the acronym, ESG. Of course, here in the U.S., there is a controversial ideological argument around the acronym. Equally important (and a symptom of that broader discussion) is how investors are voting with their dollars:


Take care
David

David Chandler
© 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/


BlackRock Retreats From ESG Following Pushback
By Jack Pitcher and Amrith Ramkumar
March 4, 2024
The Wall Street Journal
Late Edition – Final
A1, A6

Posted by David Chandler at 5:50 PM

Tuesday, April 16, 2024

Strategic CSR - Wind turbines

The article in the url below deals with the issue of how to discard the detritus of the renewable energy sector. Specifically, it notes that there is a large amount of hardware that is required to produce wind energy, which is rapidly reaching the end of its lifespan – particularly the blades from the turbines that were installed in the early 2000s:

"By 2025, trade association WindEurope estimates that 25,000 metric tons of wind turbine blades will be phased out each year in Europe alone, equivalent to the weight of more than 6,000 Hummer SUVs."

Unfortunately, most of the blades that were installed in those early years are either not recyclable or just not recycled:

"Most wind turbine blades end up in landfills or are incinerated. … That footprint only stands to grow: Total installed wind capacity reached 906 gigawatts worldwide last year, more than quadruple 2010 levels, according to the Global Wind Energy Council, an industry group. An additional 600 gigawatts are expected by 2027."

Nonprofit groups like Canvus (an organization dedicated to bringing "communities, organizations, and artists together to reimagine spaces, inspire others, and share new experiences") are working to convert the blades into functional items:

"At first glance, the benches outside the Great Lakes Science Center in downtown Cleveland seem unremarkable. But a closer inspection shows that their droplet-shaped shells aren't made from wood or metal. A scan of the attached QR codes reveals even more: These benches used to be wind turbine blades. Painted by local artists and weighing in at about 500 pounds (230 kilograms) apiece, the benches were crafted by Rocky River, Ohio-based Canvus, which will install 10 more in the same location later this month. Altogether, the dozen benches reuse roughly a quarter of a single 150-foot (45-meter) wind turbine blade."

They have lots of other ideas, too:

"The team came up with 150 ideas for products to make out of turbine blades before settling on 11 – planters, picnic tables and benches – that could be produced at scale. It also assigned each product a pithy name: the 'deborah' bench, for example, offers shade protection and is also available as a swing; 'beacon,' meanwhile, can be a bench, planter or fountain."

The article in the second url below confirms that there is a lot of hardware out there (EVs, bikes, and scooters) that has been discarded as the market attempts to identify the ideal solutions to specific sustainability-related problems:

"China is now the world leader in clean cars, producing around 6 million EVs and plug-in hybrids last year, or almost one in every three new cars sold domestically. It accounts for 60% of the world's current electric fleet, and has the most extensive EV charging infrastructure on Earth – also built with government support. But that lightning-fast development also left behind plenty of casualties. Many of the ride-hailing companies that were early adopters of EVs have gone out of business. There are now around 100 Chinese electric-car makers, down from roughly 500 in 2019."

Take care
David

David Chandler
© 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/


Retired Wind Turbine Blades Live on as Park Benches and Picnic Tables
By Coco Liu
June 15, 2023
Bloomberg

China's Abandoned, Obsolete Electric Cars Are Piling Up in Cities
August 17, 2023
Bloomberg
 
Posted by David Chandler at 1:44 AM

Thursday, April 11, 2024

Strategic CSR - Nuclear

No doubt there is more to the story in the url below, but I was encouraged by this development:

"For the first time in more than 50 years the US granted permission for a new type of nuclear reactor, a sign regulators are becoming more open to different approaches to producing power from splitting the atom."

What is unique about this new reactor design, it appears, is the cooling technology:

"California startup Kairos Power received a construction permit from the Nuclear Regulatory Commission to build its Hermes demonstration reactor in Tennessee. While commercial reactors in use today are cooled by water, the Kairos technology uses molten fluoride salt as a coolant."

As I have noted previously (see Strategic CSR – Nuclear), there are a lot of misconceptions about nuclear energy (and subsequent resistance among environmental activists), but I have not seen any realistic future projection of sustainable energy use (and rapid transition away from fossil fuels) that does not draw on at least some nuclear energy.

Take care
David

David Chandler
© 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/


US Approves New Kind of Nuclear Reactor for First Time in 50 Years
By Will Wade
December 13, 2023
Bloomberg
 
Posted by David Chandler at 2:20 AM

Monday, April 8, 2024

Strategic CSR - Gas tax

The "gas tax" in the U.S. is money raised both by the federal government and individual states (separate taxes) and used to invest in the national road system. It is one of the most effective taxes because it is targeted and, at the federal level, famously has not been raised since the 1993 (for a breakdown of state-by-state taxes, see here). In spite of being so effective, politicians are so afraid to introduce any increase in the overall tax burden that investment has dropped, and the country's infrastructure has suffered. The article in the url below argues this situation is about to get worse, as drivers increasingly trade-in internal combustion engine cars and replace them with EVs, which obviously do not need any petrol:

"Back in 2001, … lawmakers in Oregon recognized that the adoption of EVs and hybrids would eventually mean less revenue from the state's gas tax, which would mean less money to pay for roads and bridges. So they formed a committee to study the problem. After considering a tire tax, a battery tax and numerous other options, the committee concluded that Oregonians should be charged based on how many miles they drive. Twenty-two years later, the Road User Fee Task Force continues to operate small pilot programs. But like most other states that have seen gas taxes start to evaporate, Oregon still doesn't have a mandatory alternative revenue plan in place. … all proposed solutions are problematic."

There is still time, but given the seemingly omnipresent dysfunction in politics, it is hard to see how this essential problem can be overcome. In order to meet the ever-stricter gas mileage requirements being imposed by states, and in addition to growing consumer demand, sales of EVs will only rise:

"Electric vehicles currently account for only about 5% of new car sales in the U.S., but that figure will climb to at least 40% by 2030, according to S&P Global Mobility forecasts. Two years ago President Biden signed an executive order calling for half of the vehicles sold in the U.S. to be electric by the end of the decade. A few states, such as California, have been even more aggressive, mandating that all new cars sold after 2035 meet zero-emission standards."

While there are multiple sources of investment funds for road infrastructure, the gas taxes are central:

"States pay for roads in a variety of ways, including vehicle registration fees and tolls, plus money from their general funds. Gasoline taxes account for a large portion of revenue, with the average U.S. rate currently at 32.3 cents a gallon at the state level along with 18.4 cents in federal tax. (Both figures are somewhat higher for diesel fuel.) Even without the impact of electric vehicles, gas-tax revenue is falling as new cars become more fuel efficient and Americans do less driving."

As with so many issues in the U.S., the response by individual states varies significantly. At least most states understand this is a problem that they need to solve:

"Faced with crumbling infrastructure and reduced revenue, 31 states and the District of Columbia have implemented some form of variable-rate gas tax. … Several states are seeking to recoup revenue lost to electric vehicles by imposing new fees on EV owners. Last month Texas began charging $400 to register an EV, plus an additional $200 every year thereafter—on top of the $50.75 registration fee all car owners pay. In all, 33 states assess annual EV fees, according to the National Conference of State Legislatures. Meanwhile, seven states levy a tax on electricity at EV charging stations. Most are directing the funds to road construction, although Iowa's tax is being placed in a statewide economic development fund. … A road-usage fee is the most frequently cited long-range alternative, as Oregon's task force determined 22 years ago. More than a dozen states are studying it and four—Oregon, Utah, Virginia and Hawaii—have implemented voluntary pilot programs. Hawaii's model, which begins in 2025, will apply to only electric vehicles at the start, with motorists opting to pay a flat rate annual fee of $50 or get charged 0.8 cents per mile."

But, as Oregon has learned, fixing the problem in theory is very different than implementing a lasting solution in practice:

"… if Oregon has learned anything after 22 years of study—including a voluntary program with fewer than 1,000 participants—it's that the road to finding an alternative to gasoline taxes is filled with potholes."

Take care
David

David Chandler
© 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/


How Will States Pay for Roads When Gas Taxes Evaporate?
By Peter Funt
October 21-22, 2023
The Wall Street Journal
Late Edition – Final
C4
 
Posted by David Chandler at 10:35 PM

Friday, April 5, 2024

Strategic CSR - Geopolitics

The author in the article in the url below sets up his argument by noting the geopolitical role played by fossil fuels since their emergence as the dominant energy source. While solving the nasty side-effect of direct carbon emissions, he argues that renewable energy might be introducing an alternative source of "commodity dependence and geopolitical baggage":

"Wind, sun and hydrogen are free. But the equipment that transforms them into energy, stores it in batteries and transmits it needs vast quantities of minerals whose supply is more concentrated than that of oil and gas. Democratic Republic of Congo has 43% of the world's cobalt deposits, Argentina 34% of lithium, Chile 30% of copper and Indonesia 19% of nickel. … All exceed Saudi Arabia's 12% share of global oil production and Russia's 16% share of natural-gas output. For all four minerals, the five largest countries have more than half of global deposits. With oil and gas, the top five control less than half. … Downstream production is even more concentrated: China refines 70% of the world's cobalt, 65% of its lithium and 42% of its copper, far exceeding OPEC's share of oil output."

And, while the sustainability lobby is falling over itself to welcome the transition to electricity that is being encouraged by the Inflation Reduction Act in the U.S., the reality is that it will increase demand for these minerals that are already in short supply ("the law will increase that demand by 12% to 15% by 2035"), while also making the U.S. more dependent on imports from countries that are not necessarily predisposed to be friendly:

"For example, in 2035, non-free-trade partners will account for 90% of global cobalt production, most of it in Democratic Republic of Congo, which exports 70% of its production to China."

Meanwhile, the regulatory bureaucracy in the U.S. ensures that, even though there are deposits of some of these minerals available (in theory), we just cannot get out of our own way quickly enough to access them:

"The U.S. alone boasts copper deposits equivalent to 20 years' worth of its own demand. … The problem is accessing it; the firm estimates it takes 15 years on average for a mine to go from discovery to production."

The problems range from permitting ("seven to 10 years [in the U.S.], versus two to three in Australia and Canada"), to refining ("A copper refinery or smelter hasn't been built in the U.S. since the 1970s"), to what the author terms "resource nationalism":

"From the 1950s to the 1980s, western oil companies saw their operations nationalized by host countries. Today, resource nationalism is once again spreading. Indonesia is restricting exports of nickel ore to nurture domestic refining, and Chile is partially nationalizing its lithium mines."

Take care
David

David Chandler
© 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/


Green Energy Shuffles Global Influence
By Greg Ip
September 14, 2023
The Wall Street Journal
Late Edition – Final
A2
 
Posted by David Chandler at 2:55 AM

Thursday, March 28, 2024

Strategic CSR - Slow(er) fashion?

The article in the url below suggests the message that fast fashion is increasingly a hard sell for some consumers (due to the huge amount of associated waste) is beginning to make progress:

"Fast-fashion retailers including H&M, Uniqlo and Zara have for years enticed shoppers to buy more and more new clothes. Now these brands are pushing consumers to repair their old ones, too."

More specifically:

"Zara this year is launching nationwide repair services in several of its largest markets, Uniqlo is adding repair studios to a number of stores, and H&M-owned Cos is working with a startup to help customers fix damaged dresses and jackets."

Of course, if the material is lower quality (which is a big part of fast fashion's low cost business model), it might not be repairable. I thought the whole point of Zara was that it made clothes you could wear five times and then discard (see Strategic CSR – Fast fashion):

"While some high-end brands have long offered to fix pricier products, the large-scale rollout of repair services is a new venture for mainstream fashion retailers whose clothes are typically much cheaper. The trend could also threaten to cannibalize sales of new products."

Somehow, I think it will be the other way around and customers will ignore the repair option. Given that the price of labor drives repair costs, it is probably going to be cheaper to buy replacements than it will be to repair items that might not last much longer, anyway:

"In the U.K., Zara takes in garments for repair and handles payments, but uses a network of third-party repairers to do the work. Mending a hole, for example, costs £10, equivalent to roughly $13."

I would think you could buy half of the items in a typical fast fashion store for that price – certainly among companies such as Shein and Boohoo (see Strategic CSR – Shein + Boohoo).

Take care
David

David Chandler
© 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/


H&M, Zara and Fast-Fashion Peers Are Pushing Into Repair Services
By Trefor Moss
August 2, 2023
The Wall Street Journal
Late Edition – Final
B1-2
 
Posted by David Chandler at 6:50 AM

Tuesday, March 26, 2024

Strategic CSR - Statistics

Lies, damn lies, and statistics. The two charts below were on the front page of the business section of The NYT, recently, and can be used to tell contrasting stories about the successful adoption of EV cars.

The first chart would likely be used to demonstrate how EVs (and hybrids) are diffusing rapidly, and are being embraced by a public eager to tackle climate change:
 

The second chart, on the other hand, which plots those adoptions relative to the total number of cars (most of which, of course, are still ICEs), could be used to tell a very different story:
 

Take care
David

David Chandler
© 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/


Rapid Rise, With Reservations
By Nadja Popovich
March 13, 2024
The New York Times
Late Edition – Final
B1
 
Posted by David Chandler at 5:17 PM

Thursday, March 21, 2024

Strategic CSR - Bank of America

The article in the url below contains a headline that I don't see very often:

"Bank of America Pledged to Stop Financing Coal. Now It's Backtracking."

What strikes me about it that is different is not that companies are not taking climate change seriously or that they are saying one thing and then doing the opposite (both of which have always been true), but that they feel comfortable saying so, so directly. In other words, backtracking like this is exposed by the media, all the time, but it is rare to see the company announce its own backtrack:

"Two years ago, Bank of America won kudos from climate activists for saying it would no longer finance new coal mines, coal-burning power plants or Arctic drilling projects because of the toll they take on the environment. The bank's latest environment and social-risk policy reneged on those commitments. The policy, updated in December, says that such projects will instead be subject to 'enhanced due diligence.'"

I know there has been a backlash against the label "ESG" (correct impulse, but orchestrated for all the wrong reasons; see Strategic CSR – ESG and Strategic CSR – Green-hushing), but that is different from backtracking on a commitment not to fund fossil fuel projects. The reasoning, according to the article, is the same as the pushback against ESG, in general – I just would have thought Bank of America could have made a meaningful distinction among its stakeholders (and those it perceives to be most important):

"Bank of America's change follows intensifying backlash from Republican lawmakers against corporations that consider environmental and social factors in their operations. Wall Street in particular has come under fire for what some Republicans have called 'woke capitalism,' a campaign that has pulled banks into the wider culture wars."

While the backlash against ESG and related initiatives is a general phenomenon (at least, here in the U.S.), it seems particularly virulent in the finance industry, whether targeted against investment funds or the banks that finance large infrastructure projects:

"States including Texas and West Virginia have passed financial regulations designed to ward off efforts to deny fossil-fuel companies access to banking services. In New Hampshire, state lawmakers have sought to criminalize the business principle known as E.S.G., shorthand for environmental, social and governance."

The shift by Bank of America, in particular, is quite dramatic:

"Bank of America said in a statement that clients or transactions 'that carry heightened risks will continue to go through an enhanced due diligence process involving senior level risk review.' In late 2021, the bank's policy stated that it 'will not directly finance new thermal coal mines or the expansion of existing mines' or 'petroleum exploration or production activities in the Arctic.' It also would not 'directly finance the construction or expansion of new coal-fired power plants, including refinancing recently constructed plants' unless those facilities employed carbon capture or similar technology. That language is gone from its updated policy."

But, there are other signs that a similar shift is occurring industry-wide:

"There have been other contentious changes. In November, JPMorgan Chase said in its annual climate report that it was overhauling the oil and gas emissions-reduction target that had guided its energy investing and was adopting a new 'energy mix' target that took into account financing for clean energy projects. … In a statement, JPMorgan said at the time that its modified target recognized that 'a singular focus on fossil fuels will not successfully achieve the necessary transition of the global energy system.'"

For examples of more banks reneging on their climate commitments, see the article in the second url, below:

"Many of the world's biggest financial firms spent the past several years burnishing their environmental images by pledging to use their financial muscle to fight climate change. Now, Wall Street has flip-flopped. In recent days, giants of the financial world including JPMorgan, State Street and Pimco all pulled out of a group called Climate Action 100+, an international coalition of money managers that was pushing big companies to address climate issues."

Take care
David

David Chandler
© 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/


Bank of America Reverses Pledge Against Fossil Fuels
By Hiroko Tabuchi
February 4, 2024
The New York Times
Late Edition – Final
p19

More Wall Street Firms Flip-Flop on Climate Pledges
By David Gelles
February 20, 2024
The New York Times
Late Edition – Final
B2
 
Posted by David Chandler at 7:00 PM
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