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.

Tuesday, May 10, 2022

Strategic CSR - Realism


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


The interview in the url below might provide some light reading relief over the summer months. The interviewee is definitely a realist and not an idealist, and he is trying to shock the world into understanding the scale of the problem we face in climate change. I found the tone of the discussion refreshing – definitely more eye-opening than most of the fluff I see in the media around the various topics that fall under the broad, CSR umbrella (and sustainability, more specifically). Here is a taste for your enjoyment:

"The key to understanding risk — forget about climate change — is very simple. It's discounting the future. … Suppose we start investing like crazy and start bringing down the carbon as rapidly as possible. The first beneficiaries will be people living in the 2070s because of what's already in the system. The temperature will keep rising even as we are reducing these emissions. So you are asking people now to make quote-unquote sacrifices while the first benefits will accrue to their children and the real benefits will accrue to their grandchildren. You have to redo the basic human wiring in the brain to change this risk analysis and say, I value 2055 or 2060 as much as I value tomorrow. None of us is wired to think that way."

I hope you all have a good summer. See you in the autumn.

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


This Eminent Scientist Says Climate Activists Need to Get Real
By David Marchese
April 22, 2022
The New York Times Magazine
Late Edition – Final
13-15
 

Thursday, May 5, 2022

Strategic CSR - Exxon

To me, the article in the url below falls under the category of 'trying to solve a problem that doesn't really exist':

"Exxon Mobil will no longer allow banners of outside organizations on its flagpoles, angering some employees who in the past had flown a rainbow pride flag."

I can see how this might be an issue if employees were constantly lobbying the firm to fly the flags of all kinds of groups and causes that were offensive or attracting negative attention to the company – where would it stop? But, the article instead suggests that it is just a couple of flags (LGBTQ+ and BLM) from organizations that its employees broadly support:

"The new policy allows only government flags and those representing Exxon Mobil and its employee resource groups, which are employee-led affinity organizations that are generally blessed by employers. Workers can display the pride flag and representations of other groups like Black Lives Matter on other areas of the company's properties, including on lawns or in digital spaces."

It seems that the decision was made quite abruptly, and imposed from above:

"Current Exxon employees declined to comment. J. Chris Martin, a former employee who used to head the [L.G.B.T.] group, said that a different flag featuring the Exxon logo on a rainbow background 'was flown at many company locations last year without question' but that he had been told that approval to display that flag had been revoked 'without explanation.'"

Why risk alienating your most important stakeholder group, the firm's employees, for no discernable benefit or to avoid no noticeable harm? It beats me. But, then again, I have never understood why Exxon (one of the most innovative companies on the planet) continues to make dumb decisions that only serve to ensure it is an organization that continues to underperform. It seems that the company has a well-established track-record in this area:

"Exxon was long considered a foe of gay rights, particularly after it merged with Mobil and eliminated that company's policies that barred discrimination based on sexual orientation and provided benefits to same-sex couples. Exxon has since reinstituted those policies, and its rating in the Human Rights Campaign's Corporate Equality Index has risen to 85 out of 100 in 2022, from negative 25."

Perhaps it is aspiring to a negative score once again.

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Exxon Bans Outside Flags From Its Flagpoles
By Ivan Penn
April 25, 2022
The New York Times
Late Edition – Final
B4
 

Tuesday, May 3, 2022

Strategic CSR - Lightbulbs

The article in the url below tells you all you need to know, I fear, about the challenge of reforming our economy into something more sustainable. The story announces, finally (I can't believe it has taken this long and thought it had happened years ago), the end of the incandescent bulb:

"After lighting the nation's homes and businesses for more than a century, transforming the design of buildings and even lengthening the average workday, incandescent light bulbs are finally on their way out. The Biden administration on Tuesday adopted two new rules that set stricter energy efficiency standards for light bulbs. Those standards would effectively phase out the sale of most new incandescent bulbs — the pear-shaped orbs with glowing wire centers — in 2023."

Of course, by "the end," I really mean they are working towards ending it, next year. Why this took so long is fascinating (and frustrating):

"Much of the country is already lit by LED lights, which the Department of Energy estimates last as much as 50 times as long as incandescent bulbs and use a fraction of the electricity. That revolutionary shift has already driven down electricity demand in American homes, saving consumers money and cutting greenhouse gas emissions."

What I find fascinating about this is that the LED bulb is superior in every way to an incandescent bulb – more efficient, longer lasting, cheaper, better light, aesthetically equivalent (at least, no loss in design quality), and yet it has taken decades to wean people off the old design/product. If a product that is so convincingly inferior is so challenging to shift, what are we going to do about moving on from products that retain value (fossil fuels come to mind)? If we can't do it when the argument is so obvious, how are we going to do it when there is more nuance involved?

"Once the new rules are in place, Americans will collectively save $3 billion a year on their utility bills, the department said, at a time when higher energy costs have been squeezing household finances. The stricter standards will also cut emissions of planet-warming carbon dioxide by an estimated 222 million metric tons over the next 30 years, an amount equivalent to the emissions generated by 28 million homes in one year, the department added."

Of course, it wouldn't be change unless someone was unhappy:

"For manufacturers, profit margins for incandescent lighting are significantly higher than for LEDs, partly because investment in manufacturing equipment for incandescents has long been paid off and there is relatively little competition among manufacturers of the old style bulbs. The LED market, on the other hand, has attracted new manufacturers and has become far more competitive."

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Lights Out on Old Type of Bulbs
By Hiroko Tabuchi
April 27, 2022
The New York Times
Late Edition – Final
A18
 

Thursday, April 28, 2022

Strategic CSR - 6e

I am happy to announce that, over the winter break, I wrote the sixth edition of Strategic CSR (the new cover is below, and the new ToC is at the bottom of this email). The book is due to be published by Sage this summer (the launch date is mid-August). These editions don't get any easier – lots of details to update! :-)

Although the 6e will not be available until August, Sage is now accepting requests for review copies and orders on the book's new website:


As the website, explains:

NEW TO THIS EDITION:
  • Updated examples around COVID-19, BLM, the supply chain crunch, and the great resignation have been added.
  • A significantly revised case study on Media has been re-written to reflect the latest updates in social media, including the Facebook/Meta rebrand.
  • New chapter learning objectives appear at the beginning of each chapter. 

In addition, there was a thorough re-write of all chapters – bringing each up-to-date and continuing to refine my arguments. There are also 22 new Figures/Tables added and 11 Figures/Tables redesigned (with 10 that were deleted). I will also work on the instructor materials again over the summer.

Of course if you have any questions, please feel free to contact me at any time. Thank you, as always, for your support.

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

6e Table of Contents

Part I:  Corporate Social Responsibility

Chapter 1:  What is CSR?
Chapter 2:  The Driving Forces of CSR
Case:  Religion / Islamic Finance

Part II:  A Stakeholder Perspective

Chapter 3:  Stakeholder Theory
Chapter 4:  Corporate Stakeholder Responsibility
Case:  Capitalism / COVID-19

Part III:  A Legal Perspective

Chapter 5:  Corporate Rights and Responsibilities
Chapter 6:  Who Owns the Firm?
Case:  Media / Meta

Part IV:  A Behavioral Perspective

Chapter 7:  Markets and Profit
Chapter 8:  Compliance and Accountability
Case:  Investing / Impact Investing

Part V:  A Strategic Perspective

Chapter 9:  Strategy + CSR
Chapter 10:  Strategic CSR
Case:  Supply Chain / Starbucks

Part VI:  A Sustainable Perspective

Chapter 11:  Sustainability
Chapter 12:  Sustainable Value Creation
Final Thoughts

Appendix:  Implementing CSR
 

Tuesday, April 26, 2022

Strategic CSR - Discrimination

The article in the url below tells a story that has been apparent for a while, but something that seems non-obvious to most businesses:

"While businesses across the U.S. struggle to find enough employeesBitty & Beau's coffee shops say their attrition rate is near zero and they're inundated with applications every time a location opens. That's because the chain primarily hires workers from a demographic advocates say has an unemployment rate above 80%: people with intellectual and developmental disabilities."

As noted by one of the co-founders of the company:

"'There's an untapped labor force of people with disabilities in every community,' says Amy Wright, who co-founded the company with her husband, Ben, six years ago. 'Most of our employees have never had a job before.'"

And, these employees dominate the business:

"Almost 90% of the 350-plus employees at Bitty & Beau's 11 locations have a disability, doing everything from working as baristas to helping plan strategy in the corporate office."

What is even more uplifting is that there appears to be strong demand for this business model:

"In 2020, Bitty & Beau's shifted to a franchise model. On their own the Wrights could open only about one location each year, and they were fielding requests from people across the U.S. who wanted a shop in their town. The company says it's on track to expand to 27 locations in more than a dozen states in the next year or so, and within a decade the Wrights aim to have at least one shop in all 50 states."

And the business is both competitive and successful:

"The cost of opening a location ranges from $350,000 to more than $700,000, including a $40,000 franchise fee (roughly in line with what big fast-food chains charge). In exchange, franchisees are given the right to use the name, along with training and detailed guidelines for furnishing and operating the shop. The Wrights say that given the number of requests they get, a big part of their job now is vetting potential franchisees to ensure they're going into the business with the right intentions and will abide by their rules for running a shop. 'We say no to people more than we say yes,' Amy says."

 

Everything about this is good:

 

"At the recently opened outlet in Bethlehem, Pa., one wall is packed with clothing, beach towels, mugs, and other merchandise bearing awareness-raising messages like 'radically inclusive' and 'not broken.' Even the Wi-Fi password—'abletowork'—underscores the chain's mission of providing jobs to people with disabilities. Every cup of coffee, pastry, and product sold comes with a handwritten note of gratitude."


The only thing I would do differently is not include the "note of gratitude." This is not a charity, it is a fully functioning business with an effective business model characterized by low employee turnover, and is differentiating itself in a very creative and successful way. In short, it creates value for all of its stakeholders. When I read this story, it reminded me of Dave's Killer Bread (see Strategic CSR – Dave's Killer Bread) that also deals with a population that is discriminated against in terms of job opportunities – felony convictions:


"One in three of our employee partners has a criminal background. At Dave's Killer Bread, we believe everyone is capable of greatness and that a second chance can lead to positive lasting change. In 2015 we introduced our non-profit, the Dave's Killer Bread Foundation, with the mission to inspire other businesses to become Second Chance Employers and affect positive societal change."


Take care

David


David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020


Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

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

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



Building a Future for the Disabled, One Cup of Coffee at a Time

By Anna-Louise Jackson

April 11, 2022

Bloomberg Businessweek

https://www.bloomberg.com/news/articles/2022-04-11/bitty-beau-coffee-shops-put-disabilities-front-and-center

 

Thursday, April 21, 2022

Strategic CSR - Science + social media

In celebration/commiseration of Earth Day on Friday, the article in the url below appeared in the daily Bloomberg Green newsletter that I enjoy receiving (you can sign-up here). This particular post argues that a big part of the problem with conveying the urgency around climate change is not the science behind it so much as the way in which the consensus findings are advertised:

"More than 5 billion mobile subscriptions and 3.6 billion social-media accounts globally are adding up to a massive disruption in human communities' evolutionary context. … Increasing the scale of human interactions by eight orders of magnitude in less than two decades makes even run-of-the-mill misinformation easier to disseminate, more influential, and—a crucial driver—more lucrative than ever."

In other words, simple, dramatic lies spread faster and easier over social media than the complicated, nuanced truth. What does this mean for the science community, in practice, and in particular in relation to the facts of climate change?

"This new global digital landscape is hostile to antiquated 20th-century science communication approaches, up to and including the upcoming United Nations Intergovernmental Panel on Climate Change reports, which comprise multiple volumes, each hundreds or thousands of pages long. 'This is why some people have argued the IPCC should have been dissolved,' said Jennifer Jacquet, [an] associate professor of environmental studies at New York University. Physical science is central to the fight against climate change, but 'it's not really giving us new tools to make a social difference.'"

There is growing evidence that social media has significant negative side effects in terms of enabling communication globally, and this article correlates that harm with the inability of scientists to effectively communicate the implications of their work:

"Amid emergency heat, flooding, and famine, it's even more critical that people recognize and agree at least on the big picture. And yet, as recent history has shown us time and again, they don't. Much of that can be blamed on the pandemic of misinformation—concerning climate change, Covid-19, vaccines, and so much more— now running rampant on social media."

Specifically, while social media is supposed to connect us; in fact, it loosens the quality or strength of those ties:

"The development of digital communications has eroded or vaporized community protections developed over millennia to ensure at least a minimally healthy flow of information, which leads to healthy decision-making. … Think of it like this. If you wanted to make the most obvious statement in the world, you could do worse than: 'Technology now allows people to communicate instantaneously and across great distances.' Yet if you wanted to elicit the most tortured answer in the world, you might ask something incredibly similar: 'What happens when people can communicate instantaneously and across great distances?'"

 

As a result, some scientists have proposed "a new academic discipline" to describe this phenomenon:

 

"As physiology has medicine and climate science has emissions-mitigation and adaptation–planning, they argue, the digital-misinformation pandemic requires an applied science—or as they call it, a 'crisis discipline.'" 

 

A specific label suggested for this new discipline is "agnotology, the study of the creation of ignorance," and it is "a useful and much-needed new lens for understanding the modern world:" 

 

"It also has much more to explore. The authors focus on channels of communication—digital media—but the complexity and diversity of modern audiences and messengers also require study."


Take care

David


David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020


Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

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

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



As Climate Change Fries the World, Social Media Is Frying Our Brains

By Eric Roston

June 29, 2021

Bloomberg Green Daily Newsletter

https://www.bloomberg.com/news/articles/2021-06-29/as-climate-change-fries-the-world-social-media-is-frying-our-brains

 

Tuesday, April 19, 2022

Strategic CSR - Ford F-150

As noted in the article in the url below, we have made great progress in introducing EVs, and sales are increasing. The article also notes, however, that the overall effect will remain limited until we can ensure mainstream adoption of this technology. And that is only going to happen if the biggest selling makes and models are available as EVs. In the U.S., at least, this means a truck and, in particular, the Ford F-150 truck:

"As the top-selling model line in the U.S. for 40 years, Ford Motor Co.'s F-Series pickups hold special weight in the auto ecosystem. The lineup, led by the F-150, generates more than $40 billion in annual revenue. Only one other U.S. product—Apple Inc.'s iPhone—tops F-Series sales."

Thus, the strategic imperative of Ford offering an electric version of the F-150 and the estimated impact this launch is expected to have:

"Given this, Ford's decision to electrify the F-150 stands as one of the boldest strategic decisions in 21st century business. An electric F-150, more than any other vehicle, will persuade rural America to go green, leading the way for almost every automaker that finds itself challenged by the electric transition."

If nothing else, an electric F-150 will force all the other car manufacturers to compete in the EV space. In short, the U.S. needs an electric F-150 in order to achieve its environmental goals, which the article presents in a timeline:

  • 2022 First deliveries of the F-150 Lightning are expected in April or May. Ford has 200,000 reservations.
  • 2026 Date Ford set to reach annual EV production of 2 million.
  • 2030 Goal leading automakers set for 40%-50% of new-vehicle sales to be electric. President Joe Biden's target is half.
  • 2040 Sales of new gas-powered vehicles are set to end as Ford, GM, Mercedes, and others will sell only zero-emission cars.
  • 2050 The U.S. government's goal for economy-wide net-zero emissions.

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


How Ford's Electric F-150 Pickup Truck Will Cut Carbon Pollution
By Keith Naughton and Kyle Stock
April 9, 2022
Bloomberg Businessweek
 

Thursday, April 14, 2022

Strategic CSR - Fossil fuels

Announcing calls and setting targets to get rid of fossil fuels are easy; actually getting rid of them is incredibly complex and challenging, as the article in the url below reports:

"Oil and natural gas aren't needed to only generate energy. They're also critical for an array of products including face masks, diapers and vegan leather."

The article contains many examples, but here is only one – fertilizer. Making fertilizer is not possible without fossil fuels and the implications of the constraints currently being imposed on oil and gas (together with events like the war in Ukraine) ripple throughout the food supply chain:

"Consider fertilizer, which is produced using hydrogen from natural gas (the molecule CH4). Natural gas accounts for about 75% to 90% of fertilizer production costs. Russia and Belarus are large producers, and uncertainty about sanctions has reduced their exports. But skyrocketing natural-gas prices in Europe have also pushed fertilizer producers such as Norway's Yara and Hungary's Nitrogenmuvek to curtail production. Some suspended operations last fall when Russia slowed natural-gas deliveries. As a result, fertilizer prices last month hit a record. Many farmers are scaling back land in cultivation. Some say they plan to use less fertilizer, which could reduce crop yields. Others are switching from planting corn and wheat to soybeans, which require less fertilizer. The fertilizer shortage couldn't have come at a worse time. The war is disrupting grain shipments from Russia and Ukraine, which account for a quarter of global wheat exports. Wheat prices last month hit a record. While Americans will have to pay more for cereal and pasta, Africans could experience severe food shortages. At the same time, food manufacturers report that the cost of plastics for containers and packaging is soaring. Plastics are made from oil and natural gas, which are in short supply globally."

In short, while the article is not exactly sympathetic to the cause, it is making the extremely valid point that we are in no way prepared to phase out fossil fuels from our economy. The problem, of course, is that we needed to have phased them out many years ago:

"The inconvenient truth for progressives is that petrochemicals are ubiquitous and indispensable. … As much as progressives loathe fossil fuels, they can't live without them. Drive an electric car or ride a bike? Streets are paved with asphalt, which is made from petroleum bitumen. The cost of asphalt, by the way, is also soaring in tandem with oil prices."

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


You'll Miss Fossil Fuels When They're Gone
By Allysia Finley
April 5, 2022
The Wall Street Journal
Late Edition – Final
A15
 

Tuesday, April 12, 2022

Strategic CSR - Decarbonization

The article in the url below examines the economics of decarbonization. In particular, it makes two arguments that are enlightening. The first is that any barriers to decarbonization do not include the amounts of money involved:

"If the world economy fails to decarbonise, it will not be because of the cost. The gross investment needed to achieve net-zero emissions by 2050 can seem enormous: a cumulative $275trn, according to the McKinsey Global Institute, a think-tank attached to the consultancy. But over a period of decades the world would have had to replace its cars, gas boilers and power plants anyway. So the additional spending needed to go green is in fact much smaller: $25trn. Spread that over many years and compare it to global GDP, and it looks significant but manageable, peaking at 1.4% between 2026 and 2035. And that is without counting the returns on the investment. British officials reckon that three-quarters of the total cost of the transition to net zero will be offset by benefits such as more efficient transport, and that the state may need to spend only 0.4% of GDP a year over three decades."

The second argument is that a carbon tax can only be effective if reasonable alternatives are already on offer. If they are not on offer or they are too expensive, then taxes do not have the same effect on behavior:

"Carbon prices do not alter people's choices much when there are too few substitutes for dirty goods, or when those substitutes are too expensive. High fuel taxes, for example, tend to provoke political backlash against environmentalism … but do not much alter transport emissions. Britain has had one of the highest levels of fuel duty in the rich world in recent decades, … but drivers' take-up of electric vehicles has been unremarkable."

The reasons economists favor a carbon tax, the article suggests, is because they have wrongly focused on externalities ("the damage done to society when carbon is emitted") when they should have also considered the elasticity of demand ("the extent to which prices change behavior"). As a result, rather than a carbon tax, the solution offered by the book that is being reviewed in the article to bring about decarbonization is "extreme positive incentives for change," or EPICS:

"[The book's authors] laud Norway for exempting electric vehicles from road tax, cutting their parking charges in half and giving them access to bus lanes. (More than 90% of cars sold in the country are now electric.) They propose big mortgage discounts for homeowners who retrofit their properties. And they want the state to generously subsidise lending to green projects while exempting them from a range of taxes."

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


An EPIC challenge
By Free exchange
March 26, 2022
The Eonomist
Late Edition – Final
73
 

Thursday, April 7, 2022

Strategic CSR - ESG + Russia

It has been revealing to follow the conversation around ESG funds in light of the current devastation occurring in Ukraine. The article in the first url below sums up things nicely and is reasonably representative of an emerging critical line of argument:

"According to Bloomberg data, ESG funds had at least $8.3 billion invested in Russia before Putin attacked Ukraine on Feb. 24. Today, the precise value of these holdings isn't known because the market in Moscow remains shut and sanctions have made Russian securities virtually untradeable. And to be sure, it's a tiny fraction of the estimated $2.7 trillion invested in sustainable funds."

Nevertheless, quite damning when we consider questions around right and wrong, and what stocks should be included in an ESG fund. Further, it is not as if these funds were shining examples before the invasion occurred, as the article in the second url below suggests:

"In fact, the largest ESG-focused exchange-traded fund—the $22.9 billion iShares ESG Aware MSCI USA ETF (ESGU)—has almost 3.1 percent of its assets invested in the oil and gas sector, the industry most responsible for the accelerating destruction of the planet's atmosphere."

The article in the third url below captures the moral complexity perfectly by noting that what is considered right/wrong or helpful/unhelpful is not something that we can easily agree on at any given moment, let alone over time as circumstances change:

"The first approach to ESG is to try to do good with your money, and almost every ESG fund tries to imply it does this, at a minimum excluding producers of controversial weapons and the most-polluting forms of coal. Marketing materials are filled with pictures of sunflowers and green fields. But what counts as acceptable behavior changes rapidly. Russia's invasion of Ukraine has shown ESG investors what should have been obvious, that a country can't defend itself without weapons, and that means funding weapon manufacturers. … Soaring oil and natural-gas prices as a result of Russia's invasion and sanctions have prompted about-turns from Western governments, too. Just five months after hosting the Glasgow climate summit at which world leaders agreed to phase out fossil-fuel subsidies, the U.K. is cutting taxes on road fuel and trying to shield households from energy costs, while encouraging Gulf states to drill more oil. The U.S. is calling on frackers to pump more, and some European countries want price controls."

The conclusion I take away from all this is that we are simply not serious about the task at hand. To achieve the level of reductions in greenhouse gas emissions that we need to stabilize the environment in ways that give us hope for a future livable planet is not something we have yet come to terms with. This is particularly evident because, not only are we not making sufficient effort, but it is abundantly clear that we do not have a plan, either. The scale of change that is required is massive, and we are simply tweaking the edges. The metaphor of rearranging deckchairs on the Titanic comes to mind.

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Russia's War Casts Huge Shadow Over Future of ESG
By Tim Quinson
March 9, 2022
Bloomberg Businessweek

Greenwashing Is Increasingly Making ESG Moot
By Tim Quinson
March 16, 2022
Bloomberg Businessweek

Do-Good Investing is Under Pressure
By James Mackintosh
March 28, 2022
The Wall Street Journal
Late Edition – Final
B1, B8
 

Monday, April 4, 2022

Strategic CSR - DE&I

When I first saw the article in the url below from the FT, I was puzzled:

"Back in November Expensify, a $1.5bn company that helps businesses to manage their expense reporting, IPO'd on the Nasdaq. With the stock down some 55 per cent since, you might think — true to form — we'd now follow up with a snarky comment, particularly after it announced disappointing quarterly numbers on Tuesday. Tempting, sure. But not this time. Instead, we'd like to draw your attention to this paragraph regarding its charity — Expensify.org — from its S-1 filing."

Specifically, the article highlighted a commitment Expensify had made that was intended to promote diversity in the firm's hiring practices (emphasis in original article):

"Through Expensify.org, we seek to empower individuals and communities to eliminate injustice around the world by making giving and volunteering more convenient, accountable, meaningful and collaborative. … In the first year of Expensify.org, our Food Security fund helped feed over 4,500 families in need. When we introduced the Expensify Card, in addition to making it easy for individuals and customers using the card to donate, we committed to donate 10% of our interchange amount from the card to Expensify.org. Beginning in 2021, we made an additional commitment to donate 25 cents for every dollar we pay to white, male Expensify employees to Expensify.org to fund social justice and equity efforts."

As the article comments:

"We've heard of carbon offsetting, but we're pretty sure this is the first time a company has decided to, in effect, offset its white male exposure. So the question now must be: how long until we see a market develop for credits to help manage work force diversity?"

No doubt designed with good intentions, I saw two main problems with Expensify's commitment that are related to underlying flaws in carbon offsets. First, in the same way that carbon offsets are essentially an admission of the amount of pollution being emitted, these offsets are an admission of the extent of discrimination currently in the firm's workplace.

Second, again similar to carbon offsets, behavioral economics teaches us that, when you introduce a fine for a problem, some take it as a moral license to continue the bad practice, which can mean that nothing essentially changes (as with our collective carbon emissions).

Ultimately, as with carbon emissions, if we really want to reduce the problematic behavior, we just need to do less of it – not introduce compensation for the harm being done.

Then, of course, I noticed the date on which the article was published online — March 31, just in time to appear in print the next day, April 1. Unfortunately for us, however, carbon offsets are no joke.

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Expensify's unusual diversity drive
By Jamie Powell
March 31, 2022
Financial Times
 

Thursday, March 31, 2022

Strategic CSR - Plastic

The article in the url below is both hopeful and depressing at the same time. Hopeful because it suggests nature can adapt to our harmful behavior, but depressing because this reported mutation occurred in response to the damage we have already inflicted on the natural environment:

"Microbes in oceans and soils across the globe are evolving to eat plastic, according to a study. The research scanned more than 200m genes found in DNA samples taken from the environment and found 30,000 different enzymes that could degrade 10 different types of plastic."

I read the article's headline and my immediate reaction was, "oh, great, some hope" and then my second thought was, "oh, crap, we're such idiots." Nevertheless, the ability of nature to adapt is fascinating. The research is able to isolate the effects, which vary according to the location, because the evolution of the bacteria is specific to the nature of the local pollution:

"The study is the first large-scale global assessment of the plastic-degrading potential of bacteria and found that one in four of the organisms analysed carried a suitable enzyme. The researchers found that the number and type of enzymes they discovered matched the amount and type of plastic pollution in different locations."

Irrespective, we are neck-deep in plastic and need all the help we can get to reverse the damage that has been done:

"Millions of tonnes of plastic are dumped in the environment every year, and the pollution now pervades the planet, from the summit of Mount Everest to the deepest oceans. … But many plastics are currently hard to degrade and recycle. Using enzymes to rapidly break down plastics into their building blocks would enable new products to be made from old ones, cutting the need for virgin plastic production. The new research provides many new enzymes to be investigated and adapted for industrial use."

As the researchers note, the evolution is an indicator both of the scale of the problem, and the length of time we have been causing it:

"The explosion of plastic production in the past 70 years, from 2m tonnes to 380m tonnes a year, had given microbes time to evolve to deal with plastic, the researchers said."

And, of course, given the opportunity and knowledge that nature has given us, we are tweaking:

"The first bug that eats plastic was discovered in a Japanese waste dump in 2016. Scientists then tweaked it in 2018 to try to learn more about how it evolved, but inadvertently created an enzyme that was even better at breaking down plastic bottles. Further tweaks in 2020 increased the speed of degradation sixfold. Another mutant enzyme was created in 2020 by the company Carbios that breaks down plastic bottles for recycling in hours. German scientists have also discovered a bacterium that feeds on the toxic plastic polyurethane, which is usually dumped in landfills."

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Bugs across globe are evolving to eat plastic, study finds
By Damian Carrington
December 14, 2021
The Guardian
 

Tuesday, March 29, 2022

Strategic CSR - Fungibility

The article in the url below is an interesting discussion about the consequences of a high oil price for fossil fuel consumption and the switch to renewables:

"With oil costing more than $100 a barrel, and Russia's war in Ukraine underscoring the risk of relying on fossil fuel, it would seem like a great time to speed up the transition away from the polluting fuel. The reality isn't so simple. Public support for climate action is higher than ever in most countries, but that doesn't ease the economic pain when everything from food to transport gets more costly. … That reliance makes any imbalance between supply and demand a source of price volatility, including the current spike."

Like everything else, the pandemic threw a wrench into pricing in the oil industry:

"In 2020, oil giants drastically pulled back on investments to increase production on the assumption that Covid-19 lockdowns would depress demand for their product. But the quick rollout of vaccines in developed nations led to a faster-than-expected recovery and a shortfall in supply. Now Russia's invasion of Ukraine has added risk to oil supply, with economic sanctions growing. Analysts say the longer the war goes on, the greater the chance the price of oil remains above the $100 mark."

The result is that 'change' to the industry is coming a lot slower than required. Partly that is due to the necessary shift in mindset, partly due to the lifecycle of infrastructure (hard to justify replacing infrastructure before it wears out), and partly resistance from those who do not agree with the case for change and the urgency to act sooner rather than later. For example, take the sale of EVs, which have been doing particularly well in Norway:

"Yet clean energy has merely slowed down the growth of fossil fuel demand, and hasn't yet led to substantial decrease in oil consumption in most countries. … Consider what's happening in Norway, where 65% of all vehicles sold in 2021 were electric and yet oil demand has fallen less than 10% since 2013. Plus, there's rising demand from developing countries that need more energy to fuel growing economies."

In illustrating the point, this chart caught my attention. It demonstrates the fungible nature of oil but, to me, it signifies a more serious problem. In essence, the chart suggests that, in spite of the rapid increase in EV sales, oil consumption remains relatively stable:
 

If these data are correct, and play out across all nations, then we are in bigger trouble than I thought. I have long thought there are three categories of actions we are taking in response to climate change:
  1. Complete deception
  2. Well-intentioned, but ineffective
  3. Making a difference

I had been filing the rise of EVs under the 'making a difference' heading (which was the smallest bucket of the three). If it turns out that EVs should really be housed under category 2, then the number 3 bucket becomes even lighter. And none of that, of course, includes all the rare earths and other materials that are going into making the batteries that make EVs much more environmentally intensive straight off the lot (see Strategic CSR – EVs).

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Why $100 a Barrel Oil Could Be Bad for the Energy Transition
By Akshat Rathi and Will Mathis
March 2, 2022
Bloomberg
 

Thursday, March 24, 2022

Strategic CSR - Sharks

Here's a good thought for the day – a relatively simple innovation that makes a difference:

"LED lights can save more than energy. A first-of-its kind study found that when attached to fishing nets, they dramatically reduce the incidental killing of sharks and other top predators that help keep marine ecosystems healthy and seafood on dinner plates."

The problem:

"Global shark populations have plummeted 71% since 1970, largely due to overfishing and the inadvertent capture of the species in fishing nets."

An extremely simple, yet effective, solution:

"The biomass of this 'bycatch' of sharks and rays, however, fell 95% when researchers placed green LED lights on more than 16,000 feet of nets off Mexico's Pacific coast."

Moreover:

"The researchers from the United States and Mexico found that overall bycatch declined 63% compared to control nets that were not lighted. That included a 51% drop in the killing of endangered loggerhead turtles and an 81% drop in the capture of giant Humboldt squid, another top predator. That meant that fishers improved their productivity as they spent 57% less time untangling unwanted species from their nets, according to the researchers."

But, one frustrating reason why this effective solution will probably not be widely adopted:

"[The] fishers in Mexico embraced the LEDs as the drop in bycatch allowed them to return to port faster and more profitably sell their catch as it was fresher. Still, obstacles to the widespread deployment of the lights remain. Each LED costs about $7 and runs on batteries that must be frequently replaced by fishers."

Some hope:

"[The researchers] have developed a solar-powered LED that can operate for a week on an hour of sunlight and is currently being tested in Mexico."

And, future research that is currently being planned:

"'There are critical questions that need to be answered — namely what wavelengths of light work best and how do different species respond to different wavelengths,' … 'Some are attracted to light, others are repelled by light — hence this could cause complications in some mixed species fisheries.'"

Hope you have a good weekend
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


How the Fishing Industry Can Save Sharks and Seafood with LED Lights
By Todd Woody
January 25, 2022
Bloomberg Businessweek
 

Wednesday, March 23, 2022

Strategic CSR - Unilever

I am divided on the importance of the article in the url below – an announcement by Unilever that it plans to give shareholders a regular vote on its sustainability plan (see also Strategic CSR – Unilever):

"Unilever PLC said it would become the first major company to voluntarily give shareholders a vote on its efforts to reduce carbon emissions, seeking greater engagement with investors on climate issues."

On the one hand, it is inflating the importance of shareholders in company decisions, while not giving a similar level of access/influence to other stakeholders. On the other hand, however, it is an acknowledgement that Unilever feels the issue of sustainability has evolved to the point where it will generally win these votes; it also is a smart strategic move to wrest the initiative away from shareholders and control the way debates on this issue are handled at the firm's AGM:

"The owner of Dove soap and Ben & Jerry's ice cream said Monday it would seek approval from investors every three years on its plan to mitigate its carbon impact and the risks of climate change on its business. However, the vote would be only advisory and doesn't require Unilever to make changes. Major investors say they are putting more emphasis on addressing the threats posed by climate change, with shareholder resolutions on the issue becoming more common. By proposing its own climate resolutions for shareholders to vote on—which take into account the challenges and realities of achieving them—Unilever is in the driving seat, said one big investor."

And, then again, perhaps Unilever is just resigned to the inevitable:

"BlackRock Inc., one of Unilever's largest investors, said earlier this year that it would be increasingly likely to vote against management and boards if companies don't disclose climate-change risks and plans in line with key industry standards."

Alternatively, perhaps it is better for Unilever to proactively instigate this change, which allows it to constrain the vote as "advisory" only, while continuing to stretch its own performance on this issue:

"A Unilever spokeswoman said investor interest in managing the transition to net zero was growing and that the company wanted to send a signal that it was serious about meeting these targets."

Either way, the timing of the announcement was fortuitous, given yesterday's announcement by the SEC that it will start requiring firms to report the environmental impact of operations and the risk climate change poses to the business. Unilever is more progressive on such issues than most companies – a position that is reflected in the timelines and targets the firm is pursuing:

"The consumer-goods giant is among the growing number of companies setting public targets for cutting carbon emissions over the next few years. London-based Unilever has promised to eliminate emissions from its own operations by 2030 and to do the same from sourcing to point of sale by 2039. It also plans to halve the footprint of its products in the next decade, which involves the more difficult process of cutting emissions from consumers using its products."

Take care
David

David Chandler
© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Unilever Allows Climate Input
By Saabira Chaudhuri
December 15, 2020
The Wall Street Journal
Late Edition – Final
B6